A few weeks after Hurricane Katrina slammed into the Gulf Coast in August 2005, wiping away Mississippi’s flourishing casino market, then-American Gaming Association CEO Frank Fahrenkopf Jr. told those gathering for the Global Gaming Expo that the storm was the worst disaster to ever strike the gaming industry.
COVID-19 was Katrina on steroids.
The pandemic of 2020 tore through every corner of the U.S. gaming business, leaving buildings intact, but decimating the industry’s economic structure. Nationally, gaming revenues were down more than 33% through October.
Something we never thought that was imaginable until 2020. Casinos on the Las Vegas Strip were closed for 78 days due to the pandemic – Shutterstock
COVID-19 hovered over every gaming-industry storyline in 2020.
The anticipated March closing of Eldorado Resorts’ $17.3 billion acquisition of Caesars Entertainment was delayed until mid-July when coronavirus slowed regulatory approvals. The retirement of MGM Resorts International CEO Jim Murren, who said in February he would leave at the end of the year, was pushed up to March, so a permanent CEO could guide the casino company through the pandemic. Las Vegas Sands confirmed in October it was considering a sale of its Las Vegas Strip gaming and convention operations for $6 billion; Las Vegas’ slow recovery from COVID-19 was viewed as the reason.
As coronavirus began to spread in March, nearly 1,000 commercial and tribal casinos in 43 states were ordered closed by governors, regulators, and Indian-gaming authorities.
Some never reopened. In April, operators of Lakeside Inn and Casino in Lake Tahoe, Nevada, announced the small property would remain closed, even if the pandemic passed. In May, Diamondjacks Casino in Bossier City, Louisiana, and Colorado Belle in Laughlin, Nevada, followed.
The AGA estimated some 650,000 casino and resort employees nationwide lost their jobs during the shutdowns, many permanently when casinos reopened under reduced-capacity guidelines. Some 1 million non-gaming jobs supported by the casino industry were also lost.
Nine months later, the gaming industry continues to deal with the pandemic’s fallout.
No gaming market, however, was hurt more than Las Vegas – the gaming industry’s capital and flagship destination. Strip casinos produced $6.58 billion in gaming revenues in 2019 and were flirting with the $7 billion mark following the January and February results. COVID-19’s 78-day shutdown sent the Strip reeling and analysts said coronavirus could overshadow its comeback over the next three years.
Deutsche Bank gaming analyst Carlo Santarelli said none of the “historical downturns” Las Vegas has faced – the Great Recession, the 9/11 terrorist attacks, the economic crash in the mid-1980s – compares to the financial damage caused by COVID-19.
Despite the pandemic, however, gaming continues to expand. Voters in November approved casinos for four Virginia cities, casinos at Nebraska racetracks, expanded gaming in Colorado, and sports betting in three states – Maryland, South Dakota, and Louisiana. Sports betting is now legal in 19 states and Washington, D.C.
We saw the best of the gaming industry in 2020. Closed casinos nationwide became food distribution centers and COVID-19 testing locations. Despite being out of work, gaming employees stepped into roles helping charitable and community organizations. Wynn Resorts was the first casino operator to develop a comprehensive COVID-19 health and safety reopening plan and shared it with the industry. MGM Resorts created a $14 million employee assistance fund.
On a large scale, Las Vegas Sands flew CEO Sheldon Adelson’s Boeing 767 from China to deliver 2 million medical masks and 20,000 protective suits to help health-care providers, first responders, and nonprofit organizations in New York and Nevada.
On a small scale, employees of Philadelphia-based casino equipment provider KGM Gaming, utilizing the home driveway of an executive, produced medical face shields for area hospitals.
Current AGA CEO Bill Miller wrote last week, “By any measure, 2020 has been an extraordinary year,” in a note to the industry.
“We endured a devastating pandemic, social unrest, and a contentious national election. The toll COVID-19 has taken on each of us is real – affecting our families, teams, and businesses,” Miller wrote. “But as the year comes to an end, the deployment of breakthrough vaccines presents promise and hope.”
As we head into 2021, the gaming industry looks different. Social distancing and cleaning protocols implemented during the spring and summer casino reopenings remain in place. Face masks are required for both employees and customers, hand sanitizer stations are nearly as prevalent on gaming floors as slot machines, a good number of casinos nationwide have banned smoking, and cashless gaming systems, such as digital payment technologies, are emerging.
How long will this last? Not one prognosticator in 2019 predicted a worldwide pandemic would play havoc on the industry in 2020.
It’s best not to make any predictions for 2021.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
