It hasn’t exactly been a smooth ride since the Mandalay Bay Massacre in 2017, and now we see that casino revenues in coronavirus-struck areas have collapsed…
(Silver Doctors Editors) It hasn’t exactly been a smooth ride for the Las Vegas casino industry over the past few years.
In November, 2017, we reported that tourism had plummeted in Las Vegas, in part because of the mass shooting that happened on October 1st, 2017.
In 2018, Las Vegas casinos reported a net loss of over $1 billion, which is attributed to bankruptcy re-organizations.
So it was already a rough couple of years for the casinos, and after a net revenue profit of $2.055 Billion in 2019, there is talk of 2019 being a turnaround year.
The casino industry would have been feeling optimistic going into 2020, that is, until Covid-19 happened in China, along with the devastation to the casino industry in Macau that followed.
From Zero Hedge (bold added for emphasis):
Just as we saw happen with auto sales in China, Macau’s gaming revenue collapsed in February as a result of China grinding to a halt while the entire country remains mostly in lockdown as a result of the coronavirus spread.
Macau businesses closed for 15 days to help control the spread of the virus, but it cost them. Gross gaming revenue for February was just 3.1 billion patacas ($386.5 million), a 87.8% fall from 2019. Analysts were predicting the pain ahead of time, estimating for a median of a 90% drop, according to Bloomberg.
Macau, the world’s largest gambling hub, had its government suspend casino operations from February 5th to about February 19th. The epicenter was already dealing with falling revenue numbers from 2019 – and this closure just adds insult to injury. It was the longest closure on record, second only to a 33 hour shutdown that occurred as a result of a typhoon in 2018.
When business resumed around February 20th, foot traffic at casinos was still weak. China continued to halt visas to Macau and transportation remained restricted.
Here’s a look at the most recent Johns Hopkins Covid-19 tracker, from the 7:33 a.m. update on Tuesday, March 3rd:
Supposedly, there are only ten cases in all of Macau, but the casino industry has still been devastated.
On the one hand, we are talking about China here, which is ground zero for the pandemic, and Macau is one of those “administrative” political areas aligned with China much in the same way that Hong Kong is aligned, only Macau is the Las Vegas of China/Asia, so on the other hand, if the coronavirus pandemic hits Las Vegas, mildly even, would we not see a similar plummet in revenue?
Nevada is very close to the epicenter of the US spread.
In fact, Nevada shares borders with the states of Oregon, Arizona and California, all of which have confirmed coronavirus cases.
In yesterday’s Silver Doctors Live, we showed what life is like in China in an area where there are active cases of coronavirus, and in particular, we highlighted how shopping malls would simply close down, with only one day of notice given, taped to the front doors of the mall.
We discussed many other things relating to what life will be like in the USA when the number of cases really starts increasing:
Here’s the question: Is the casino industry truly ready for community level spread which could force casinos to abruptly close their doors?
Are casino industry employees ready if employers are forced to shut down?
Is the state of Nevada ready for the loss of revenue?
And that is the difficult balance – having a functioning society amidst a pandemic.
See how there are so many question that are not going to be easy to answer?
Here are two more difficult, uncomfortable, and better-think-these-things-through questions –
Is it possible that Las Vegas received a temporary boost to tourism in January and February as gamblers who would have otherwise gone to Macau or other places instead went to Las Vegas, and could any of those tourists been asymptomatic Covid-19 carriers?
In addition to the impact on the casino industry, do all of the shows and conventions in Las Vegas continue go on at a time when it seems as if travel restrictions are increasing, not decreasing, and rapidly invoked and enforced quarantines may mean a simple vacation ends up being a multi-month nightmare?
This article is an example of some of the problems the various Las Vegas industries will have to solve, and people who have a stake in those industries, as in employees, owners, and visitors, will also have to be prepared to solve those problems as well, but there is an overall point here: No matter where you are, and no matter what you do, we all need to be thinking about the problems we will be facing in the event of community level spread.