Penn National Gaming CEO Jay Snowden was asked last week if he was concerned that the current nationwide spike in COVID-19 cases might subject regional casinos to a rollback in operations or another gaming shutdown.
“I would just tell you that it’s very fluid,” Snowden said Thursday on Penn’s third quarter earnings conference call. Penn operates 41 gaming properties in 19 states and only one location – Zia Park racetrack and casino in New Mexico – has remained closed since mid-March.
“Most of our jurisdictions are at status quo, and we’re moving along, and we’re just all being cautious,” Snowden said.
Four days later, Massachusetts Gov. Charlie Baker issued a statewide stay-at-home advisory for residents that also requires the state’s three casinos – including Penn’s Plainridge Park – to close between 9:30 p.m. and 5 a.m., beginning Friday.
Snowden told analysts he’s concerned about Illinois, where Penn has three casinos. Gov. J.B. Pritzker ordered rollbacks for certain businesses – including casinos – in several parts of the state, reducing hours of operation, limiting capacity, and decreasing restaurant services. So far, Penn’s casinos haven’t been impacted.
The same holds true for Boyd Gaming, which operates the Par-A-Dice casino in East Peoria, Illinois. That region hasn’t been subject to the rollbacks. With operations in 10 states, Boyd CEO Keith Smith is keeping a watch on increasing positivity rates for COVID-19.
“That certainly could be an impact or risk to the business,” said Smith, whose company has reopened all but three Las Vegas-area casinos in its 29-property portfolio. “We certainly view that as a short-term risk. We are watching it in Illinois.”
Colorado, where Penn operates Ameristar Black Hawk, is also seeing a high number of coronavirus cases. Snowden said company representatives are staying in close contact with health experts, health officials, gaming regulators, and local lawmakers.
Penn National CEO Jay Snowden
“It’s about safety. It’s a group discussion,” Snowden said.
Operators point to their COVID-19 state and tribal government-mandated health, safety, and cleaning protocols, as well as mask and facial-covering requirements, social-distancing guidelines, and capacity limitations – all put in place to limit the spread of COVID-19.
But is it working?
Massachusetts’ governor made his decision after the state experienced nine consecutive days in which new COVID-19 cases exceeded 1,000 per day. It’s becoming obvious that other states are seeing similar increases in case numbers. According to the Centers for Disease Control and Prevention, cases are spiking in more than half of the U.S. states.
On Monday, the Washington Post reported that White House coronavirus adviser Dr. Deborah Birx noted the country is entering “its most dangerous period yet” in the pandemic.
This is not the news the casino community wants to hear. Roughly 90% of the nearly 1,000 commercial and tribal casinos that closed in 43 states have reopened.
During the closure, casino operators and gaming equipment providers took out billions of dollars in debt and bank financing to improve their balance sheets should another shutdown be implemented or a reduction in hours reduce revenues.
Snowden said Penn is in a much better situation financially than the company was in March and April. “We’re in a very comfortable position from a cash and cash access standpoint, (and) from a liquidity standpoint — really, in any type of a scenario as we move forward.”
Slot machine players at the Plainridge Park Casino in Massachusetts
On the Las Vegas Strip, Wynn Resorts, Las Vegas Sands, Caesars Entertainment, and other operators are closing various properties or portions of the business during the middle of the week, when visitation is at its lowest. On Tuesday, MGM Resorts International said Park MGM would close midweek starting Nov. 9 and continuing through Christmas in order to save costs.
This comes as Nevada Gov. Steve Sisolak is looking for a way to re-boot the Strip’s non-existent multibillion-dollar convention and meeting business, which has seen six straight months of zero attendance.
If the state’s COVID-19 numbers have been reduced and other factors fall into place, on Jan. 1 conventions will be able to proceed at up to 50% capacity. However, it will take months before the first tradeshow arrives.
That is if the state’s casino industry can avoid anything beyond a midweek rollback.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
