Covid Continues to Dog U.S. Casinos
As Covid-19 cases continue to soar in Illinois, Governor J.B. Pritzker (l.) ordered the state's 10 casinos and 37,459 video gambling machines in 7,135 locations to close indefinitely. It was just one of several states that tightened restrictions on casinos due to the pandemic.
Several states have either closed casinos in a second lockdown or increased restrictions on opening hours and amenities offered in the wake of a spike of Covid-19 cases spreading across the United States. While some are temporary and have an expiration date, others are indefinite and could be in place for months. Several tribal nations, not subject to state decrees, have made hard decisions on whether or not to curtail operations, as well.
Illinois’ 10 casinos and 37,459 video gambling machines in 7,135 locations shut down on Thursday, November 19 under orders from Governor J.B. Pritzker, due to a resurgence of Covid-19. No reopening date was set. Besides casinos, museums, theaters and numerous other entertainment venues and businesses were ordered to close. Indoor dining and bar service have been closed for several months, but outdoor dining still is allowed.
Earlier this year, Illinois was the first state to stop gaming operations due to Covid-19. That was on March 15. Originally they were going to be allowed to reopen after 14 days but the shutdown lasted until July 1.
Boyd Gaming spokesman David Strow said, “Based on the order, we will close Par-A-Dice Hotel Casino tonight. This closure will impact all public operations, including the casino, restaurants and hotel. We do not have an anticipated reopening date at this time.” Strow added, “team members will continue to receive regular pay and benefits, including tips, through the end of the year if necessary.”
A spokesperson for Caesars Entertainment said, “In compliance with government directives, Caesars Entertainment’s three Illinois properties, Harrah’s Joliet, Harrah’s Metropolis and Grand Victoria Casino Elgin, will temporarily shut down beginning at 11 p.m. on Thursday. The safety of our guests, team members and community is our top priority and as such we will continue to follow the recommendations of local regulators and public health officials.”
Penn National Gaming, operators of Argosy in Alton, Hollywood Casino Aurora and Hollywood Joliet, issued a statement through its communications firm. “The health and well-being of our team members and customers remains our paramount concern. We have been successfully operating under comprehensive safety protocols since reopening in June, in addition to significantly reduced capacity levels. We will continue to work closely with the Illinois Gaming Board, state and local leader, and public health officials to help prevent the spread of Covid-19.”
Other casino operations affected by the order include Rush Street Gaming’s Rivers Casino in Des Plaines; DraftKings, which licensed its name to the Casino Queen in East St. Louis; and the privately held Jumer’s in Rock Island, which is to be acquired by Bally’s Corp.
Pritzker said the closures and new rules were implemented to avoid a stay-at-home order for Illinois residents. He said the effort would “pause a number of indoor activities where the science shows us this virus can most easily spread.”
Faced with a seven-day average of new Covid-19 cases in excess of 2,000, Nevada Governor Steve Sisolak ordered a new round of restrictions on November 22. In an effort to mitigate the rise in infections, capacity in casinos, restaurants, and bars throughout the state, including those inside casinos will be restricted from 50 percent to 25 percent.
The limits also include a mandatory requirement that all Nevadans and visitors wear a mask or facial covering at all times. Reservations for restaurants are required, and no more than four patrons can be seated at one table.
Hotels and suites do not have to comply with the capacity limitations. Indeed, the governor exempted hotels to allow transit workers, truckers, and other essential employees to access needed rooms.
“My goal is to aggressively try to attack this spread while maintaining some portion of our economy and our daily life,” Sisolak said. “Going forward, we will reduce capacity in certain high-risk areas that have been shown nationally and in Nevada to contribute to the spread of Covid-19.”
The restrictions will last for three weeks after which the situation will be re-evaluated.
The prior restrictions in place since casinos reopened June 4 took their toll as fall approached. In September, for example, gaming revenues on the Strip fell 45 percent, visitation declined 55 percent, and airline passenger volume at McCarran International Airport dipped 56.5 percent.
“Recently, we took great steps to increase gathering size to 250 people or 50 percent, whichever was less,” Sisolak said.
That plan was be shelved for now. Shows that would have allowed up to 250 attendees have been cancelled.
Gaming experts say the new orders are unlikely to severely affect the bottom line since casino floors were operating at well under allowed capacities before the order.
The order does not affect the capacities of pools and retail, which can continue to operate at 50 percent capacity.
Rick Arpin, a former executive with MGM Resorts International, told the Review Journal, “The casinos in Las Vegas are rarely, if ever, at capacity.”
Meantime, hotel occupancies have run in the mid-30 percent range during the week and between 50 percent and 80 percent on weekends. MGM Resorts announced that it would close hotel operations at Mandalay Bay and the Mirage on Mondays through Thursdays, starting November 30. Restaurants and other amenities will remain open at the properties throughout the week.
MGM had already limited operations at Park MGM to just weekends, following a similar trend started by Las Vegas Sands, which has closed the Palazzo from Monday through Thursday, and Wynn Resorts, which has imposed similar limitations on Encore. Caesars Entertainment announced plans to reopen the Rio resort in late December, but only for weekend occupancy.
Nevada Gaming Control Board Chairman Brin Gibson said most operators will comply with the new limitations.
“The board will vigorously enforce the Governor’s newly announced gaming floor occupancy restrictions among gaming licensees and asks for the industry’s assistance. The more successfully Nevada mitigates the current spread over the next several weeks, the more likely we are to experience a complete return to current gaming floor occupancy percentages at that point.”
The president of the Nevada Resort Association, the state’s largest gaming trade organization, concurred.
“We understand the governor’s actions seek to balance the best interests of public health with the ongoing economic impacts,” said association President Virginia Valentine. “Like every state in the nation, Nevada faces a grim future if the virus’ spread is not contained and reversed quickly.”
Sisolak said theater and casino showroom venues joined places of worship, indoor movie theaters, weddings, funerals, celebrations of life, milestone celebrations and the like must adhere to the restrictions. The limits forced the cancellation of the annual National Finals Rodeo in December.
Spokesmen for three of the largest Strip operators, MGM Resorts International, Caesars Entertainment Inc. and Wynn Resorts Ltd. were supportive of the governor’s action and said they would comply.
Wynn spokesman Michael Weaver added, “We believe the Governor made a prudent decision that will protect public health.”
Nevada Resort Association President Virginia Valentine commented, “We understand the governor’s actions seek to balance the best interests of public health with the ongoing economic impacts.” She added, “Like every state in the nation, Nevada faces a grim future if the virus’ spread is not contained and reversed quickly.”
Any previously approved large gathering performances will be cancelled during the three week pause, according to the Las Vegas Review-Journal. The audiences have been spaced apart, with a 25-foot “entertainment moat” separating performers from the crowd.
These restrictions will clearly have a major impact on entertainment which in some cases restarted in October, MGM spokesman Brian Ahern said in a statement. “We will share that information as quickly as possible to minimize guest inconvenience.”
“Absinthe will continue to play at Caesars Palace,” show producer Ross Mollison said. “The great news is we’re sold out until the end of the year.”
The show has sold each of 153-seat reopening capacity. In pre-Covid days, “Absinthe” sold out at 660-seat capacity, 14 shows per week. Now it’s 500 per week, for 10 shows.
Performances subject to closure include MGM Resorts International’s David Copperfield, Jabbawockeez and Brad Garrett’s Comedy Club at MGM Grand; Carrot Top and Fantasy at Luxor Theater; and Australian Bee Gees and Thunder From Down Under at Thunderland Showroom at Excalibur.
Cirque du Soleil announced Zumanity at New York-New York will close permanently.
SPI Entertainment CEO Adam Steck, who produces Australian Bee Gees and Thunder from Down Under, said, “It’s disappointing. We did everything we could do to make it safe for the customers, the cast and crew stepped up for a safe environment.”
“Fantasy” producer Anita Mann plans to return.
“We’re hoping we can go back to where we are now, with the 250 capacity. The audiences have enjoying the show, we’re selling out, and the cast has been thrilled to be back to work. Hoping we can get it turned around,” Mann said.
For Garrett, 50 people won’t work. “You can only bend comedy so much until it’s not a great experience live,” he said. “Plus, I want everyone safe. The numbers are horrible.”
Tropicana had brought back its Laugh Factory comedy lineup with headliner Andrew Dice Clay scheduled Thanksgiving weekend. Rich Little and Murray Sawchuck will return. Club operator Harry Basil said Sunday he still plans to keep the room running at 50 seat-capacity.
“I just talked to Dice, and he still wants to keep the dates. He just wants to make sure it’s safe,” said Basil. “We just want to be safe. We can still make it work.”
If the new restrictions weren’t bad enough, restrictions in Los Angeles and other parts of California will exact another toll. Los Angeles County accounted for 19 percent of Las Vegas visitors in 2018. California Governor Gavin Newsom imposed an overnight curfew on November 19. Newsom’s order calls for “non-essential work, movement and gatherings” to stop between 10 p.m. and 5 a.m. local time.
Automobile traffic from California has helped offset some of the limitations in air travel.
“With drive-to business driving the majority of Strip revenues right now, increasing California restrictions/quarantines are a real risk for Strip operators, especially in a seasonally slower time of year,” Barry Jonas, director of equity gaming research at Truist Securities, told FOX Business.
Average daily auto traffic jumped 8.1 percent year over year in September to 126,888 vehicles per day, according to Las Vegas Convention and Visitors Authority data. That follows declines of 13 percent, 10 percent and 4 percent in June, July and August.
“The pieces of our database that are missing or lagging, they’re the most profitable pieces of our database. It’s the 55-and-over cohort that’s not coming,” Caesars Entertainment Inc. CEO Tom Reeg said on the company’s third-quarter earnings call on November 5. “These are people that are not going anywhere and are not spending and are going to come out of this with significant pent-up demand and spending power.”
Earlier last week Nevada set another record for the most Covid-19 cases reported in a day, 2,853. Health officials are hoping to hold off until spring when most expect the various Covid-19 vaccines to be widely available to the public.
Meanwhile, the Nevada Gaming Control Board announced that Nevada’s gaming revenues had declined a mere 19.5 percent in October, the lowest drop since the pandemic closed the state’s casinos for 78 days beginning in mid-March.
According to the board, casinos took in about $822.7 million from patrons in October, compared to $1.02 billion the same month a year ago. One factor could have been that October had two additional weekend days compared to last October.
In Nevada gaming revenues declined 36.05 percent through October.
Northern Nevada, which includes Reno, actually saw an increase of gaming revenue of 6 percent, compared to a 30.2 percent decline in Las Vegas.
Michael Lawton, a senior research analyst with the Control Board, commented, “The performance of markets in Northern Nevada, in addition to Mesquite and the balance of Clark County, was the result of the favorable calendar and the fact that these markets rely on a combination drive-in traffic and local play.” He added, “The recovery is going to be uneven between markets that rely on local play versus markets that rely more on destination air travel.”
Macquarie Securities gaming analyst Chad Beynon told CDC Gaming Reports that the Strip casinos had seen their highest monthly gaming revenues since the beginning of the pandemic, but that the governor’s new restrictions would probably hamstring that recover. “Gaming revenues should face continued headwinds given the increase in cases in Nevada and heightened restrictions,” he said.
One gaming sector showed a definite improvement, sports betting, which saw an increase of 21.3 percent in wagers, or $659.6 million, a record, beating last October’s $614.5 million. The increased wagering didn’t translate into more profits: revenues dropped 11.5 percent to $42.4 million.
In a related development, room rates in Las Vegas had dropped for the Thanksgiving weekend. The likely culprit was the CDC travel advisories, or rather “anti-travel” advisories issued the Thanksgiving week.
Rates dropped between 3.6 percent to 54.7 percent depending on the properties, and whether they were on the Strip, downtown or elsewhere.
As University of Nevada Las Vegas’s International Gaming Institute fellow Alan Feldman phrased it, “It’s all pointing in the same direction — unless you must travel, please don’t. And Las Vegas is not in the ‘must travel’ category.”
He added, “Under these circumstances today, it’s all the more understandable that you’d see prices go down because you’ve seen travel restrictions and requests for limited travel, so fewer people are traveling.”
He called this “ominous” since the state and Clark County depend on taxes on the hospitality and gaming sectors.
Rhode Island Governor Gina Raimondo last week ordered both of the state’s casinos to close for two weeks, beginning November 30. The casinos are Twin River Casino Hotel in Lincoln and Tiverton Casino Hotel, both owned by Bally (formerly Twin River World Holdings.)
“I’ve done everything that I knew how to do to avoid the severe restrictions,” said the governor. “I’m in a world of all bad choices. And I am trying to pick the least bad options.” She said she was trying to avoid overloading the state’s hospitals, which have already reached 97 percent capacity for their dedicated Covid-19 beds. “We’re in a really bad place,” she added.
Other venues that will be closed include in person colleges and universities, offices, bars, recreational venues, and indoor sport facilities and gyms.
Twin River hosts about 6,000 daily visits, compared to 14,000 before the pandemic.
Although there have been cases of people who tested positive for Covid-19 who had also visited one of the two casinos with a two week period, state Health Department spokesman Joseph Wendelken conceded, “We don’t know that these people got sick there. We have not seen any large clusters of cases there.”
Marc Crisafulli, the executive vice president of Bally’s Corp. and president of Twin River Casino Hotel and Tiverton Casino Hotel said in a statement,
“We respect the governor’s decision to temporarily close our two Rhode Island casinos,” adding, “As we said at the outset of the COVID-19 pandemic, the continued health and safety of Rhode Islanders must take priority.”
Craig Sculos, Twin River general manager and vice president, was philosophical about the order. “It’s an old expression but one I live by: we’re playing the cards dealt,” he told the Providence Journal.
He added, “We’ve taken a very simple approach. We can only contain what happens within our four walls. Safety has been the number one governing principle for everything that we have done. So if a lockdown comes, a lockdown comes. We’ve done everything we can to make sure we are in compliance with what the expectation of the governor’s office is.”
This will be the second time the Rhode Island casinos were closed to everything but sports betting. The first time was March 13, a lockdown that lasted until June 8.
At Twin River, although it has been open since June, its hotel and event center remained closed as well as nearly half of its 4,100 video lottery terminals and the table games operated at limited capacity.
These limitations have caused VLT revenues to plummet 35 percent in September from the year before while table game revenues fell 43 percent.
The new two-week closure will result in two-thirds of the 2,500 employees being furloughed.
In the time remaining to them, some of the casino’s most dedicated or as Sculos calls them “serious” players have been upping their visits.
One type of player, those who visit casinos for entertainment or dining, are almost extinct, because the casino has nothing for them currently, said Sculos.
Another player who has been prominent by their absence are the elderly, who used to park next to VLTs for hours on end.
Amidst the spike of Covid-19 cases in Michigan, several tribal casinos are remaining open, some are temporarily closing and others are closing portions of their operations.
Soaring Eagle Casino & Resort in Mount Pleasant and Saganing Eagles Landing Casino and Hotel in Standish, owned by the Saginaw Chippewa Indian Tribe of Michigan, will remain open during the 3-week partial shutdown ordered by the Michigan Department of Health and Human Services, which began November 18. Tribal officials cited a “track record of success” with health and safety protocols.
Officials announced the decision to remain open on the casinos’ Facebook pages, noting mandatory mask-wearing has been particularly effective. “Contact tracing indicates that Coronavirus transmission typically occurs outside of the casino environment where masks may not have been worn and other protocols may not have been followed,” the statement indicated.
Saginaw Chippewa Indian Tribe Public Information Officer Frank Cloutier said, “Every case that we’ve had to experience here is not a case that originated within the workplace. There’s only about 60 percent of our floor that’s open and being offered. We’re creating that social distancing by turning off the machines, by closing table games, by closing a lot of our food and beverage areas, controlling that environment.”
Cloutier added the decision to keep the casinos open will be revisited if new information becomes available.
Gun Lake Casino in Wayland, owned by the Match-e-be-nash-she-wish Band of Pottawatomi Indians, also will stay open. Assistant General Manager Carter Pavey said, “As we continue to evaluate, we still take this very seriously. I think we have one of the more advanced ‘play it safe initiatives.’ We have one of the most advanced programs in place.” However, he noted the casino will close dine-in food operations and card tables, except the high limit room where capacity can be limited.
The Bay Mills Indian Community’s Bay Mills Resort and Casinos in Brimley has temporarily closed for three weeks, starting November 25. Tribal Chairperson Bryan Newland said, “To date we have not had one single case of Covid transmission at Bay Mills Resort and Casino or any of our tribally owned facilities. With that being said, it just doesn’t make sense to keep bringing people together indoors right now when we have the outbreak that we have in the Eastern Upper Peninsula. Just hang in there all the pandemics have ended and this one will end too.”
Newland said the tribe has budgeted funds from the CARES Act to continue to pay employees. He added when the casino reopens it will require masks and temperature checks, ban smoking and cut occupancy as before.
The Little River Band of Ottawa Indians’ Little River Casino Resort in Manistee also will be closed, from November 22 through December 8. Tribal leaders issued a statement noting the decision to close was made ” to assist in curbing the spread of the Covid-19 virus. We are supportive of our leaders and the healthcare officials who are the real heroes during this fight. We know that the initiatives taken by them, along with the support of us and the community, will help to get this situation under control.”
Ohio casinos would see a curfew on patrons of 10 p.m. under new Covid-19 restriction implemented by Governor Mike DeWine.
The curfew effects the public which would have to avoid retail businesses between 10pm and 5am in hopes of slowing the spread of the coronavirus.
“We think we can accomplish, frankly, a lot more by having this curfew than by closing one or two business sectors,” the governor said.
The curfew will be imposed on individuals, not businesses, Dan Tierney, a spokesman for DeWine’s office told the Las Vegas Review Journal.
“The order closes no business, although we understand some business may change their hours as a result of the curfew,” he said.
Las Vegas-based MGM Resorts International’s MGM Northfield Park, located outside of Cleveland, will reduce its hours of operations to 8 a.m. to 10 p.m., for example.
DeWine said the curfew and increased mask use could help cut contacts between people by up to 25 percent.
“We know if we reduce number of people we come in contact with every day, we reduce the chance of getting the virus, and we reduce the chance of getting the virus if you unknowingly have it,” he said.
Maine Governor Janet Mills has imposed a 9 p.m. curfew on the state’s businesses, including the state’s casinos.
Other businesses included in the order include restaurants, social clubs, movie theaters, and bars.
Mills said in a statement, “As we enter the colder months and a holiday season when we customarily gather with friends and family, we are also entering a new and dangerous phase of the pandemic.”
The order was criticized by the industry group Hospitality Maine as singling out the hospitality industry, although Hospitality Casino General Manager Austin Muchemore limited himself to saying that the Bangor casino had been successfully operating with safety protocols and reduced capacity.
Navajo Nation Jonathan Nez has rejected reopening the tribe’s four casinos, at the same time that the numbers of Covid cases among members hit record highs in a second wave.
In vetoing the bill by the Navajo Nation Council that would have reopened the casinos at 50 percent capacity, Nez said, “We cannot put a price tag on the health, safety, and lives of our Navajo people.” He added, “Revenues do not outweigh the precious lives of our elders, children, and gaming employees.”
The original vote to reopen the casinos was 15-8. To override the veto would take a two-thirds vote of the 24 member council, or 16.
Navajo Nation Gaming Enterprise CEO Brian Parrish had told the Navajo Times, “Our board and management team does not want to put the Navajo people or employees, or patrons at risk.” He added, “We understand why this is a challenging decision for everyone, including Navajo leadership. We are not sure what the next steps are.”
Several weeks ago Parrish had urged the council to reopen the casinos by November 17, citing the 1,180 employees of the casinos and over 100 employees of the Navajo Gaming Regulatory office, many of who are tribal members.
That date was necessary for the casinos to survive and not have to close permanently, he said.
After the veto he said, “We got our cash forecast report put together. We still have our team members on administrative leave with pay. We are paying all of our fixed expenses, utilities, debt service; we remain focused on honoring those responsibilities. We firmly we believe we have a couple of weeks.”
The decision whether to reopen the casinos was eventually left to the Council, rather than the gaming board.
Chief Legislative Counsel Dana Bobroff commented, “There’s nothing in Navajo law that specifically says the gaming board can open the casinos and not comply with Navajo Nation public health orders. That is essentially the crux right here.”
She added, “I do believe the enterprise gaming board does have the ability to open the casinos,” she said, “but without this legislation I lean to the fact … while the gaming board may be able to open casinos, they do have to do such in compliance with the Navajo Nation public health orders, emergency orders. That is problematic.”
Before the vote Parrish had explained that the reopening plan had an 11 page checklist with 233 safety items included that included turning off every other slot machine to provide social distancing.
He also noted that of the $301 million in profits made from gaming over the last six years, $210 million had been paid to the Nation.
Informing Nez’s veto was the fact that last week the Nation’s cases of new Covid-19 were 383, compared to the previous record of 351 cases the week before.
The total number of death was 631 as of that time, with the total number of positive cases being 15,039.
The Navajo Nation is now in the midst of a three week, 24-hour lockdown, except for essential workers, emergencies and going out of the home to buy essentials.
Island View Casino Resort in Gulfport wants $10 million from its insurance carrier for business losses resulting from a 65-day shutdown due to the Covid-19 pandemic. The property’s parent, Gulfside Casino Partnership, filed suit in federal court seeking not just the $10 million, but $90 million in punitive damages, attorney’s fees and interest.
According to the Sun Herald, Island View lost $46.2 million in revenue between March 16 and May 21 under orders from the Mississippi Gaming Commission. The insurance policy, for which Island View pays $408.268 a year, covers just $10 million. The lawsuit alleges breach of contract and negligence by Georgia-based Westchester Surplus Lines Insurance Co.
But the insurance company argues the property has to experience physical damage, as it would in a hurricane, to recover losses. Indeed, Crawford Global Technical Services wrote in a July letter to Island View: “As a general matter, the policies afford coverage only when there has been direct physical loss, damage or destruction. In the absence of such damage, there is not coverage.”
Pollutants and contaminants, including viruses, are excluded from coverage as is communicable disease, the letter said.
The casino disagrees. Officials claim the policy covers losses caused by canceled bookings, or the inability to accept bookings, as a result of “a contagious or infectious disease at an insured location, as determined by a public or civil authority,” and that the loss is covered “whether or not physical damage occurs to the property.”
Stay tuned for who wins and who loses this argument.