Vegas casinos not closing, but coronavirus severely impacting resort industry

March 14, 2020 10:40 PM
  • Howard Stutz, CDC Gaming Reports
March 14, 2020 10:40 PM
  • Howard Stutz, CDC Gaming Reports

The spread of the COVID-19 coronavirus in the U.S. has forced governors and gaming regulators in more than a half-dozen states to either order casinos to close temporarily or to place limitations on crowd size in places where it is, to this point, financially prohibitive to not remain open.

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So far, Nevada has not issued that same edict.

But the nation’s largest casino state – which posted approximately $12 billion in gaming revenues in 2019 – can’t compare with other jurisdictions. In Nevada, taxes from gaming revenues and other tourism-related sources are the primary funding mechanisms for the state’s budget.

On Thursday, Nevada Governor Steve Sisolak declared a state of emergency and hinted he may consider banning mass gatherings, as other governors have done. Similar restrictions have forced casinos in Ohio and Pennsylvania to temporarily cease operations.

There haven’t yet been any serious discussions of Nevada’s casinos doing the same.

Nevada Governor Steve Sisolak

“We’re very concerned about what the economic downturn will do to the state of Nevada,” Sisolak said during a news conference. “We’re aware that we rely on gaming and sales tax as (a) predominant source of revenue, and hopefully we’ll be able to weather the storm. I’m confident that there are adequate reserves, and hopefully we’ll be able to move forward.”

MGM Resorts International said that last week a guest from New York who was staying at The Mirage and attending the Women of Power Summit tested positive for coronavirus.

“Several of our employees have tested presumptive positive for coronavirus,” MGM President Bill Hornbuckle said in a letter Friday to MGM employees, company President Bill Hornbuckle said. “(We) expect there will be more in the coming days.”

According to the Reno Gazette-Journal, one of the employees worked at Luxor and the other at the Wet Republic pool.

“Their co-workers and those individuals who have had close prolonged contact have been notified,” according to the letter that was first reported by the VitalVegas.com website. Hornbuckle said the company is working with the health district.

In an email, MGM spokesman Brian Ahern said there were “no plans on suspending/closing operations in Vegas.”

As of Saturday afternoon, Nevada had 21 reported cases of coronavirus, 16 in Southern Nevada’s Clark County, where Las Vegas is located. MGM is only gaming company to publicly state it had cases from guests or employees at its properties.

Sisolak, at his press conference, noted the economic damage facing resort operators from Covid-19.

Regulators concerned

Nevada Gaming Control Board Chairwoman Sandra Douglass Morgan

On Friday, Nevada gaming regulators told casino operators and other license holders there is an “expectation” they comply with legislative mandates to protect the public health in wake of the COVID-19 outbreak.

In a Notice to Licensees, Control Board Chairwoman Sandra Douglass Morgan said the statement wasn’t issued in response to a complaint or a concern regarding any licensee’s current operations of practices regarding coronavirus.

Morgan said the Control Board has been in contact with the Governor’s Office, local and state health officials, and gaming operators relating to the continued spread of Covid-19.

In the notice, Morgan said gaming license holders must “continue to review and utilize its best efforts to comply with the “Guidance on Preparing Workplaces” for Covid-19, published by the Occupational Safety and Health Administration.

Several of the major Strip casino operators have taken steps beyond the best practices, such as performing routine environmental cleaning in accordance with the Center for Disease Control’s “Environmental Cleaning and Disinfection Recommendations.”

In the notice, Morgan said the Control Board “will continue to closely monitor the spread of Covid-19 and expect that licensees will make the health and safety of their employees and patrons the highest priority by providing them with every available opportunity to remain healthy.”

Lost business

On the Strip, which provides more than 50% percent of the state’s monthly gaming total, resorts have seen millions of dollars in potential gaming and non-gaming revenues erased in less than a week because of the viral outbreak.

Hotel room rates have dropped over the past two weeks and room cancelations have increased. More than two dozen large and small conferences and trade shows have canceled, including the National Broadcasters Association, which would have brought almost 100,000 visitors over a five-day stretch.

The canceling of the NCAA’s “March Madness” men’s and women’s basketball championships, along Major League Baseball, the NBA, NHL, and other sports leagues suspending games has taken millions of dollars in wagers away from sportsbooks.

Resort operators have responded with various cutbacks.

MGM Resorts has instituted a temporary closure of its buffets, nightclubs and day clubs, spas, salons and fitness centers at its nine Strip properties. In Friday’s letter, Hornbuckle cited decreased business demand and said approximately 150 food and beverage outlets would close on a rolling basis.

“We are working diligently to minimize the impact on our employees through furloughs and layoffs that will begin next week,” Hornbuckle said.

Wynn Resorts announced Thursday it was also closing its all-you-can-eat buffets, along with any other large entertainment gatherings such as nightclubs and theater shows. The resort also confirmed to ESPN that its sportsbook and poker room will close for an undetermined amount of time beginning Sunday.

Wynn is the first Nevada casino to shut down its sportsbook since the coronavirus caused almost all professional and collegiate sports to suspend play.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.