Nevada’s non-essential businesses, including casinos, were ordered by Governor Sisolak to remain closed until at least May 1. I think that date gets pushed back to May 21. That is the day after the Clark County School District would have let out for the year, which I believe will not reopen until the fall. It seems like a good line to make so Las Vegas and its risk returns gradually.
The governor giving casinos the green light to reopen, whenever that is, will not be a magic switch that brings Las Vegas back to normal overnight. The hangover from the COVID-19 pandemic will last months, maybe years.
Macau is giving us some insight as to what a reopening may look like in Las Vegas. The world’s largest gaming market reported a decline in March gaming revenues of 79.7 percent after being closed for two weeks in February.
Las Vegas Strip casinos will not reopen all at once
The thought that Las Vegas will be immediately normal when reopening time comes along is, in my opinion, delusional. The convention segment that helps Las Vegas keep hotels and restaurants full on weekdays will be nonexistent for months. When conventions begin to return, it will be a slow process to get back to normal. The Las Vegas Convention and Visitors Authority has been rescheduling the first of canceled events in the late summer months.
Hotel owners can gauge demand by the number of bookings on its websites. This data will help each company determine its best course of action for each property.
The lack of convention business will slash demand for Las Vegas hotel rooms and amenities indefinitely. This leaves casinos that cater to this segment less attractive for reopening than ones that cater more to leisure travelers.
For example, Mandalay Bay is dedicated to its convention space. If that space is not utilized, there is little reason to reopen the property early in the process. This may also spell bad news for Luxor and Excalibur, which are connected to Mandalay Bay by corridor and tram.
Mirage, with its detached location from other MGM Resorts properties, may also be a candidate for a late reopening. Some hotels in the company that reopen when the order is rescinded may only keep one tower in operation.
Caesars Entertainment will have some tough decisions to make. All its Strip casinos are in proximity. It may reopen all casino floors and choose a staggered approach for hotels, perhaps opening a single tower at each or only keeping a few of its properties at fuller operations. The latter seems more likely to me.
I think most independent operators on the Strip will reopen when the green light is given. However, the operations will concentrate on the casino floor and hotel first before there is enough demand to bring back other amenities.
Even when hotels reopen, it is safe to say many parts of the property will remain closed. Shows, spas, fine dining and buffets seem like the most obvious amenities that will reopen late.
Downtown Las Vegas
Downtown Las Vegas is not dependent on conventions on any level that the Strip is. I think most of downtown Las Vegas reopens when permitted by the governor. It is positioned well for a recovery with its smaller hotels and perceived value fro leisure gamblers.
The only exceptions I think could be the three Boyd properties. It is possible the casino floors reopen, and most amenities do not. Maybe only one or two of the hotels turn the lights on. This decision could be dependent on Hawaii relaxing travel restrictions around the same time Las Vegas reopens.
The only other redundancy downtown in terms of multiple properties under one ownership is Four Queens and Binion’s. Since the hotel at Binion’s is mostly closed anyway, I don’t see much change there. Maybe Hugo’s Cellar, along with some other downtown higher-end dining options, take a wait-and-see approach.
Locals casinos are the least affected by the loss of tourism. I think most reopen casino floors and any other amenity required with that. You may even see some full reopenings.
I think the exceptions to the on-time reopening could be redundancies within a company. For example, it may be a tough call by Station Casinos to reopen Wildfire, Texas Station, Fiesta Rancho and Santa Fe Station all at once.
I predict virtually all locals taverns reopen on the date allowed. Any exception will be more related to the business financials than anything else. The demand for taverns should return to close to a normal range quickly.
Social distancing policies
While many casino floors will reopen right away, expect there to be minimum spacing between players. I expect to see every other slot machine dark. Table games are likely to have seats missing that only allow three players per table.
Poker rooms and sportsbooks
I believe these two gaming amenities will be the last to reopen at most casinos. The first poker rooms to reopen will likely be the ones that closed last. South Point dealt the last live poker hand in Las Vegas before the shutdown, according to Bravo Poker. The Boyd and Station properties dealt almost up to the end. These are the favorites to reopen immediately when permitted. However, expect the same shorthanded game policies and no tournaments for the foreseeable future.
Sportsbooks have little reason to open. Some may operate with a supervisor writing whatever tickets come along from the obscure sports on the boards right now. There are also players that may want to collect funds from mobile apps that have been locked up during the closure. There is little reason to believe sportsbooks fully reopen before before a major US sports comes back unless it has a large horseracing following and there is still action there.
World Series of Poker and Rio
I do not think the World Series of Poker happens as normal this year. I respect that the group wants to wait until the last minute to decide. Its potential guests should be able to get full refunds on travel so there is no downside in doing that. The dates probably get pushed back and the series is abbreviated, in my opinion. Many events will end up at its online poker site, which has seen an influx of new players in the past few weeks.
It is not just the loss of the summer WSOP that hurts Rio. It is as dependent on conventions as many Strip resorts. Those may not come back in full swing for a year. That cuts deeply into the two-year leaseback.
If the series is shortened, moved to the end of the summer, or canceled altogether, I do not see the need for it to be at Rio. The mezzanine at Planet Hollywood would likely suffice. There will also be ample space in convention centers throughout the company. For those reasons, I think Rio could be doomed. It may never reopen if there is not a drastic change in the COVID-19 outlook in the next month due to the sale and two-year leaseback term.