‘Opening up America’ guidelines leave casino industry speculating where it fits Howard Stutz, CDC Gaming Reports · April 20, 2020 at 7:00 am The ink was still wet on the White House’s 18-page plan for re-opening the U.S. economy when gaming insiders began poring through the document to figure out how casinos might fit into the three phases. The nationwide shutdown of nearly 1,000 casinos in 43 states in response to the COVID-19 coronavirus pandemic was not entirely uniform. The closures were spaced out over nearly two weeks, and were largely mandated by governors, state gaming regulators, and tribal governments. In some instances, casino operators, such as Wynn Resorts and MGM Resorts International, made their own decisions to close properties before the orders came down. The state-by-state casino re-openings will not be identical, either. Joel Simkins, the head of gaming and leisure investment banking for SunTrust Robinson Humphrey, believes regional gaming markets, such as the Midwest and South, have a quicker path to reopening than destination gaming markets, such as the Strip and Atlantic City. “As stay-in-place and social distancing measures start to ease, we expect consumers will gradually be willing to venture out and get back to their favorite pastimes,” Simkins, a former equity research analyst wrote in a report provided last week to gaming industry CEOs, CFOs, and other industry insiders. “It will be far easier for consumers to jump in their cars and gamble versus hopping on a plane,” he wrote. “We aren’t epidemiologists and think it’s unwise to play the role of armchair expert in trying to prognosticate when business will return to ‘normal’ and what that means for a top line.” The White House document outlined guidelines covering three phases for states and regions to reopen. It also described guidance and health and safety protocols for individuals, businesses, and communities to follow. John DeCree of Union Gaming Union Gaming Group analyst John DeCree, in a note to investors Friday, suggested casinos fall into the reopening group guidelines for large venues, which includes movie theaters and arenas. If a state meets certain criteria, including a downward trajectory of COVID-19 cases for two weeks, the venues could reopen under strict distancing protocols. “It is still unclear what distancing protocol for casinos would look like but could include reduced gaming capacity, greater spacing between active slot machines, fewer seats at live gaming tables, and masks for dealers,” DeCree wrote. Casinos could likely reopen under the phase one guidelines, which would keep bars, nightclubs and other amenities closed until the state reached phase two or phase three guidelines, he added. Global Market Advisors Partner Brendan Bussmann said that, whatever phase the casinos fall into, operators will have a heavy responsibility once the resorts are reopened. “The burden on employers is going to be significant and will likely require gaming operators to not only check their employees’ health but those of guests as they return to both regional and strip operations,” Bussmann said. “They are also going to have an increase in their housekeeping costs in terms of personnel and product once they are allowed to reopen.” Brendan Bussmann, Global Market Advisors Bussmann, who is also director of government affairs for GMA, said there are “differing opinions” as to where gaming and hospitality facilities fall into the multi-phased approach. March gaming revenues nationwide have fallen, on average, 50% to 60%, depending on the length of the casino shutdowns. Other than New Jersey and Pennsylvania, which have active online gaming businesses, April will produce zero gaming revenues for much of the nation. DeCree said even a partial opening in a few states could be material for operators who are burning cash to keep closed casinos ready for customers to return and companies operational. “Even some revenue would help mitigate cash burn such as interest and rent expense to some degree,’ DeCree said. “This would help extend liquidity runway, alleviate balance sheet pressure, and preserve equity value.” DeCree added that smaller, gradual reopenings would also provide some insight into consumer behavior and help project what larger reopenings and recovery would entail. Simkins said older customers might be hesitant to venture out, even into regional markets. Wynn CEO Matt Maddox “Another key consideration is the average age of the (regional) consumer and how these players feel about out of home experiences, particularly when they appear to be the most vulnerable age population,” Simkins said. Wynn Resorts CEO Matt Maddox, in a commentary published in The Nevada Independent Sunday, said reduced occupancy, distancing measures, temperature checks, no large gatherings, and masks for everyone may be the norm at the company’s casinos in Las Vegas and Boston. “Our detailed plan … to keep employees and customers safe upon reopening … relies on the best available science on sanitization methods in consultation with professional infectious disease experts from the best academic institutions in the country,” Maddox wrote. Bussmann said the reopening of the Strip will have its own phased-in approach. “Demand will not be where it was at the beginning of March, as tourists (will) want to know it is safe to come to Vegas either by car or flying into McCarran (International Airport),” Bussmann said. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at email@example.com. Follow @howardstutz on Twitter.