Many pundits and gaming industry observers have lately been comparing the coronavirus’s impact on the casino industry with the consequences the gaming community felt from the 9/11 terrorist attacks on the U.S.
They are not the same.
The COVID-19 coronavirus pandemic is worse. Far worse.
Following the Sept. 11, 2001 attacks on New York, Washington D.C. and Pennsylvania, airline traffic stopped, and people couldn’t travel.
Destinations such as Las Vegas suffered economically. The regional casino markets flourished, however, catering to predominately local crowds not interested in venturing far from home but looking forward to a night out.
With coronavirus, social distancing and staying home is mandatory.
Casinos have now been closed in more than three dozen states, many voluntarily by Indian tribes and smaller operators. Governors in 13 states have ordered shutdowns.
On Tuesday evening, Nevada Governor Steve Sisolak took the extraordinary step of ordering all casinos statewide to close for a minimum of 30 days.
After 9/11, casinos in Nevada and elsewhere did not close. No one wanted to travel, but people still wanted to play.
Now, the Las Vegas Strip won’t be in business until, at best, the middle of April.
On Sunday, Wynn Resorts and MGM Resorts International became the first Nevada companies to voluntarily shut down their casinos. That same day, Sisolak issued new guidelines for casinos continuing to operate, including fewer chairs at tables and extensive cleaning procedures.
He was reluctant to shut the state’s lifeblood industry, its economic driver and the job source for a large swath of the state’s residents.
“To protect the public health and safety of Nevadans and visitors, I strongly support any of our properties that make the difficult decision to close to the public,” Sisolak said Sunday.
It will be at least 30 days or longer before we see crowds like this on the Las Vegas Strip/Photo via Las Vegas Review-Journal
So what’s changed in the days since?
“I have spoken with the chief medical officers of all of Nevada’s hospitals to get their assessment of our current situation and most responsible next steps,” Sisolak said at a press conference Tuesday evening in Las Vegas. “They have advised that the most effective course of action is to direct all Nevadans to stay home and for all nonessential businesses to close to the public for 30 days.”
Nevada’s number of coronavirus cases have been increasing, and two other operators, The Cosmopolitan of Las Vegas and Las Vegas Sands Corp. decided to close down their casinos ahead of Sisolak’s shutdown order. Just before Sisolak spoke, Station Casinos said it was shutting done its 20 gaming properties in Southern Nevada.
Before Tuesday, MGM Resorts didn’t have a casino open in the U.S. That’s 20 properties in five states, including 13 on the Strip. Penn National Gaming had closed more than half of its 41 casinos in 19 states. Boyd Gaming was closing down its 29 properties throughout the 10 states.
For Reno-based Eldorado Resorts, 21 of the company’s 26 casinos in 11 states were closed in the span of three days. The last five standing were in Nevada.
As of Tuesday at midnight, the sound of slot machines will be silenced.
Empty slot machines, an image we will see for the next 30 days
“It has become clear that we must take this extreme action to help contain the virus and protect the safety and well-being of our team members and guests,” said Caesars Entertainment CEO Tony Rodio.
Most operators have committed to paying sidelined casino employees through the end of March. But current indications point to the country dealing with coronavirus well into the spring.
Several gaming companies – Caesars, Eldorado, Penn National, Golden Entertainment – have drawn down millions of dollars in credit lines, preparing for the long haul. Expect others to follow suit.
The Washington D.C.-based American Gaming Association is focused on the casino industry’s inclusion in the proposed $850 billion to $1 trillion federal stimulus effort that would support direct grant assistance, loan guarantees, or meaningful refundable tax credits to free up operating capital.
We’re not talking just casino operators and gaming equipment providers. Legal gaming in 43 states funds 1.8 million jobs, including positions with vendor companies that service casinos.
In the most recent AGA State of the States survey, casinos nationwide were determined to have generated $47.1 billion in gaming revenues and to have paid $9.7 billion in gaming taxes to state and local governments. Billions more were generated in incomes, sales, and other taxes.
“Nevada is the epicenter of the resilient American gaming industry,” said AGA CEO Bill Miller. “The federal government must act swiftly to bring relief to our friends, neighbors, and colleagues in Nevada and all across America whose livelihoods have been severely impacted by these hard but necessary actions.”
So where do we go from here? The situation doesn’t just change daily, it changes hourly.
For example, a week ago, the CEOs of Full House Resorts and Golden Entertainment, cited their experiences with 9/11 in guiding their gaming businesses through a crisis.
“It’s pretty reminiscent actually of 9/11,” Full House CEO Dan Lee said. “We thought the airlines were all going to go out of business. And nobody would ever visit a casino or a hotel.”
Golden CEO Blake Sartini, a 30-year gaming veteran, said, “I’ve managed through other local and world events in each and every case, Las Vegas has proven its resiliency and has come back bigger and stronger than before.”
That was then. Last week both companies had casinos operating in Nevada and other U.S. markets. Today, they don’t.
Coronavirus has changed the game.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
