Casinos avoid closing

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The Las Vegas casino industry can breathe a sigh of relief for now that it’s not facing another coronavirus shutdown.

It’s going to be tougher to get a table at your favorite casino restaurant. And you can forget about watching a show for now. If you were planning on attending a convention with up to 250 people, that’s been canceled.

Nevada Gov. Steve Sisolak put people on the edge of their seats Sunday when right after the day’s NFL games started, he announced a press conference on the state’s COVID-19 response that would take place between the ending of the late afternoon games and the start of the Chiefs-Raiders game on Sunday Night Football.

Fortunately, there’s no shutdown like the resort industry faced in March that lasted 2½ months. Since reopening June 4, Las Vegas has slowly made a comeback with visitation running more than 50% below 2019.

But now the industry faces a three-week pause in which casino floors must reduce their capacity from 50% to 25%, and casino bars and restaurants will have to do the same. Whether that pause continues depends on Nevada making a dent in its rising caseload that’s now averaging 2,000 infections a week for the first time.

“Midweek is not going to matter as much as it is on weekends,” said Brendan Bussmann, a partner with Global Market Advisors. “The notice of reductions at least over the next three weeks is going to reduce demand on weekends, which is going to hurt the industry. If people think Vegas is only open for 25%, I don’t think that sends a message that we’re open for business. That’s half of what we have right now on the casino floor and entertainment that was just starting to come back and for restaurants and other parts of the operation.”

That also means the cancellation of any meetings and conventions of more than 50 people that were scheduled over the next three weeks and vital to Las Vegas’ recovery.

Brent Pirosch, director of gaming consulting for research firm CBRE, said he believes, however, that the industry can overcome these new restrictions.

“The locals gaming market has recovered fairly well, so we believe the operators will be able to adapt to the changes and hold onto at least some of the momentum,” Pirosch said. “The new capacity restrictions ordered by the governor coincide with a slower part of the year, so we’re hopeful the impact to business won’t be severe.

“Convention visitation is typically lowest in December and group business likely won’t return to meaningful numbers until after a vaccine is widely distributed.”

Nehme Abouzeid, president and founder of LaunchVegas and who has worked for the Las Vegas Sands Corp. and Wynn Resorts, said he understands Sisolak’s actions. He said it’s clear that visitors to Las Vegas have been “letting their guard down” and contributing to the spread of COVID-19.

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“The new guidance may be a blow to the restaurant, events and live entertainment industries that were trying to claw back to life, but in reality, the reduced capacity limits were already decimating their businesses,” Abouzeid said. “If we can hold off until the spring when vaccines will be widely distributed, then hopefully there will be a clear path forward at that time.”

Virginia Valentine, president of the Nevada Resort Association, said the health and safety of guests, visitors and residents remains the greatest priority of the resort industry. She said the industry understands the governor’s actions to seek a balance between public health and the impact on the economy.

“Like every state in the nation, Nevada faces a grim future if the virus’ spread is not contained and reversed quickly,” Valentine said. “As the resort industry does its part to adhere to this directive, we strongly urge the public to join us by following recommended practices and behaviors. With the public’s help, we are optimistic we can move through this situation swiftly and return to the business of bringing people back to work safely and moving our economy forward.” 

The Las Vegas Convention and Visitors Authority and resorts took similar stances supporting Sisolak’s actions as a way to stop the spread of COVID-19. Casinos are quickly taking on the new task of dealing with the new restrictions that went into effect Tuesday ahead of the Thanksgiving holiday. Shows hosting 250 people have already been canceled.

Caesars Entertainment said its bars and restaurants and will continue to provide to-go options for pickup and for delivery to their rooms.

Brian Ahern, director of media relations for MGM Resorts International, said they’re “working to adjust our operations” to comply with the new restrictions.

“This will clearly have a major impact on entertainment, and we are working with our partners to determine the path forward,” Ahern said. “While we recognize these are challenging times, we are encouraged by positive news of vaccines on the horizon and believe deeply that our resilient community will rebound.”

Josh Swissman, founding partner of The Strategy Organization, said gaming companies will take restrictions compared to Michigan, New Mexico and other states that have shuttered casinos temporarily. Swissman said the emergence of vaccines is giving people hope that even if the governor has to extend the pause or add restrictions, people see an end to the pandemic.

“If they have to operate at 25% and they lose less money than if there was a shutdown, that’s what they’re going to do until the vaccine is more widely available and starts to stimulate travel and visitation,” Swissman said.

Bussmann said for the short term, there’s no predictability that the industry craves. No one knows what to expect next from the governor.

“Two weeks ago, it was stay at home 2.0, and we’ll be O.K.,” Bussmann said. “Obviously that wasn’t the case, and we’re three weeks in a pause. The positive is we didn’t see a complete shutdown, but who knows what happens in three weeks.”

About the Author

Buck Wargo

Buck Wargo is a former journalist with the Los Angeles Times and has been based in Las Vegas as a business, real estate and gaming reporter since 2005.

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