The gaming industry and its stocks got a boost Monday when Pfizer announced its vaccine trial appears quite effective against the coronavirus.
That promising news comes as the industry mulls the impact of the presidential election won by Joe Biden and a U.S. Senate that will be decided by a runoff in Georgia in January.
Brendan Bussmann, director of government affairs for consulting firm Global Market Advisors, said the vaccine announcement was good news that counters the reports of the rise in COVID-19 cases. While the solution is in sight, — Pfizer said there would be 50 million vaccines available in 2020 and 1.3 billion in 2021 — Bussmann said he still believes it will take until late 2022 and early 2023 for the gaming industry to completely recover.
Good day for casino stocks ðŸ”¥ pic.twitter.com/zKQtc2phiL
— Las Vegas Locally ðŸŒ´ (@LasVegasLocally) November 9, 2020
“Over the course of time, this is definitely going to help the industry get back on its feet along the way,” Bussmann said. “It’s going to be a while before we’re back to normal, but the announcement with Pfizer and other vaccines coming is a step in the right direction.”
Las Vegas’ 1.7 million visitors in September was still half of what it was in September 2019. The reason is air travel through McCarran International Airport is down 60% since the reopening of Las Vegas casinos in June.
“A vaccine goes a long way to giving a much-needed boost and confidence in the gaming industry, particularly here to the Strip in Las Vegas,” said Josh Swissman, founding partner of The Strategy Organization. “I think that post-vaccine — people who are less confident with traveling right now — will be more confident to get on a plane and be in a hotel and casino with other people. It goes a long way for people to feel good about traveling again.”
Bussmann warned that there’s a lot of people skeptical about taking a vaccination, and more people need to be convinced before it can be effective. Those economies based on tourism and air travel like Las Vegas will take the longest to recover in the economy.
“It’s yet to be seen if we have the Consumer Electronics Show in (January 2022), but when it comes to meetings and conventions, the existing regulatory framework has no pathway. I know (Nevada Gov. Steve Sisolak) has said he’s trying to do everything he can to get meetings and conventions at 50% by January. The problem is most of those major conventions have kicked the can down the road or punted and gone somewhere else next year. This is a matter of saving the third quarter and beyond in 2021.”
Swissman said another benefit of having a vaccine is that it bolsters the economy and gives people more confidence to spend money. Experts have talked about a vaccine being available for most people starting in the second quarter and going through the summer.
“That’s in line with what I have been talking about that you won’t start to see volume come back in any appreciable way until the middle of next year,” Swissman said. “This is kind of line with that.”
As for the election, Bussmann said a Biden Administration will elaborate its position on the Wire Act that is likely to revert back to the Obama Administration.
The Trump Administration’s reinterpretation of the 1961 Wire Act deeming all forms of in-state online gambling as illegal has had the gaming industry on edge as sports betting expansion and iGaming continues to grow. The issue may ultimately get decided by the courts or Congress.
“I think the Biden Administration will determine the status quo is O.K. rather than the uncertainty now from the Department of Justice now,” Bussmann said.
The Senate is likely to be decided in the Georgia runoff election with two seats up for grabs that could give Democrats control.
Bussmann said he’s concerned New York Sen. Chuck Schumer, the Democratic majority leader, would push for a national sports betting bill that would take authority away from the states. That could potentially lead to a ban on college sports betting if the NCAA had its way, he said.
Maryland, Louisiana and South Dakota voters approved sports betting on Tuesday with legislative action now required to enact that in 2021. Virginia voters with land-based approvals set the stage for sports betting enactment and Nebraska did the same.
“I think the gaming industry as a whole had a pretty good election cycle with a number of new sports betting and land-based opportunities presenting themselves,” Swissman said.
Bussmann said now that the election is over and a new Administration is incoming, there’s hope that a deal can ultimately get done between Democrats and Republicans to provide more relief and stimulate the economy in 2021.
He said based on the ongoing tension about the outcome of the election between Democrats and Republicans and Trump has yet to concede, nothing will happen in the lame duck session at this time.
“I don’t see anything in a big way right now,” Bussmann said. “It might be surgical. “Anything done in a big way like a $3 trillion package will have to wait until January, depending on how the Senate shakes out.”