A little more than a year ago, Bill Miller flew to Chicago for a planned meeting with the team from Rush Street Gaming. As he was leaving Reagan National Airport in Washington, D.C., the CEO of the American Gaming Association noticed the concourse wasn’t as busy as normal.
The coronavirus was one topic of conversation between Miller and Rush Street CEO Greg Carlin. It became much larger after lunch when an aide told the gaming executives that Major League Baseball had shut down spring training and the NCAA canceled March Madness.
“We then heard governors were considering shutting down casinos because of the virus,” Miller recalled in an interview this week. “There is so much we didn’t know at the time.”
Shutterstock/Sign at The Cromwell on the Strip
That weekend, Illinois Gov. J.B. Pritzker became the first official to order his state’s gaming industry – 10 casinos and more than 7,200 video gaming terminal locations – to close for at least 15 days in an effort to mitigate the spreading virus. By Monday morning, nearly a dozen other states had followed suit and ordered a halt to casino gaming activity.
A few days later, the tsunami reached its high point. Nevada Gov. Steve Sisolak stepped in front of microphones for a St. Patrick’s Day news conference in which he announced that the state’s casino industry – including the Las Vegas Strip – would close for a month to try and slow the spread.
“The most effective course of action is to direct all Nevadans to stay home and for all nonessential businesses to close to the public for 30 days,” Sisolak said at the time, after getting an assessment of the situation from the state’s health officials.
It was a stunning announcement. The nation’s gaming industry epicenter, a 24/7 casino market that produced $6.87 billion of the state’s $12 billion in 2019 gaming revenue, was about to be padlocked.
It had happened once before, 57 years earlier, when Gov. Grant Sawyer suggested the Strip’s casinos go silent as part of a national day of mourning for the funeral of President John F. Kennedy. That shutdown, however, was just for 17 hours and a handful of casinos didn’t participate.
“I was raised in Las Vegas. The casinos never closed,” former Nevada Gaming Control Board Chairwoman Sandra Douglass Morgan recalled this week. “It was a hard pill to swallow.”
By the end of March, nearly 1,000 commercial and tribal casinos in 43 states had closed under orders imposed by governors, gaming regulators, and tribal gaming authorities.
“It was an unprecedented dynamic,” Miller recalled. “The severity of the economic impact on the industry was going to be devastating. But we had to take our direction from public-health officials.
One year later, just 69 casinos remain closed, according to the AGA’s COVID-19 casino tracker.
Casinos began reopening by the beginning of May, primarily in tribal markets and regional gaming states. Strict COVID-19 health and safety guidelines and protocols for cleaning, social distancing, and the use of personal safety equipment, such as mask requirements, were implemented. Many of those conditions remain in place.
In Nevada, the shutdown lasted 78 days and casinos were allowed to reopen on June 4. More than a dozen casinos in the state remain closed, including four operated by Red Rock Resorts and two Boyd Gaming properties, all in the Las Vegas area. South Lake Tahoe’s Lakeside Casino closed permanently and its furnishings and other items were auctioned off this month.
Medical masks and other facial protection are becoming common in Las Vegas/Shutterstock
Today, the Strip is back and gearing up for the opening weekend of NCAA’s March Madness Basketball Tournament. Capacity restrictions have been lifted to 50% occupancy and hotel room rates, according to the Las Vegas Review-Journal, have more than doubled in price at some resorts for this weekend compared to seven days ago.
Most analysts have long stated that regional casinos markets, which rely on drive-in visitation, would have a quicker recovery period. Destination markets, such as the Las Vegas Strip, which are heavily dependent on airline travel, would experience a much slower comeback.
But with the ongoing COVID-19 vaccine rollout and declining coronavirus positivity rate, there is some optimism along the Strip.
“We think gaming has already experienced an incredibly strong recovery relative to many other consumer discretionary and travel industries,” Deutsche Bank gaming analyst Carlo Santarelli wrote in a research note last week. “In the coming months, regional casinos will be more crowded, Las Vegas will be more crowded, (and) people will be out and about.”
Closing the Strip
Sandra Douglass Morgan was tasked with overseeing Nevada’s gaming shutdown, which she and industry leaders knew was far more complicated than just padlocking the front doors. Gaming regulations spell out the many steps that are undertaken in closing gaming at a property, such as removing cash and casino chips for safe storing and securing the facility and equipment.
Added into the mix were relocating and making travel arrangements for guests, especially international visitors. Casinos also distributed tons of perishable food items to food banks and other charitable resources in Nevada.
Morgan was also in contact with gaming regulators throughout the country seeking advice from Nevada.
“There was a lot of unknowns and we knew there was going to be a huge effect on the workforce,” she said.
The closed Strip became an oddity for Las Vegas locals.
Casinos flashed messages of hope and recovery on their marquees. Several properties lit up their building’s hotel rooms to form hearts or spell out simple messages. The idea caught on at other casinos around the country.
A customer heads toward the Sahara Las Vegas entrance on Thursday morning after the casino was closed for 78 days
Reopening and recovery
Prior to the casinos reopening, Morgan convened a nearly three-and-a-half-hour workshop with health and safety experts involved in managing Nevada’s response to COVID-19, including the state’s director, hospital officials from Reno and Las Vegas, and several first-responder representatives.
The workshop, conducted in a virtual format, at times drew more than 1,200 viewers.
Morgan said it was rare to have state and local health professionals answering gaming regulator questions. But with the reopening of the Las Vegas Strip and other casino markets, she wanted to be sure health and safety protocols for casinos were sufficient.
“This was an unprecedented event and I wanted to make sure we had all the advice and information needed to safely reopen,” Morgan said.
The weekend after the shutdown, the Nevada Resort Association released a study that showed the recovery time from a 30- to-90-day shutdown of all tourism activities in the state could take up to a year and a half with an economic impact reaching almost $39 billion. The study was to encourage the gaming industry’s inclusion in any federal economic stimulus package being considered on Capitol Hill.
Looking back a year later, Resort Association President Virginia Valentine said the economic analysis was “unfortunately, incredibly accurate.” However, gaming realized quickly that “no state would be hit harder than Nevada, and we understood recovery would take some time.”
Miller said the efforts by Nevada’s delegation and representatives from other gaming states ensured the casino industry’s inclusion in all three federal reliefs stimulus packages, something that had never happened with other disasters, such 9/11, Hurricane Katrina, and Superstorm Sandy.
“Gaming was treated the same as everyone else. That was a milestone,” Miller said.
Valentine said the Las Vegas Strip is still awaiting the return of large tradeshows, conferences, and events, while areas of the resorts remain closed or at reduced capacity.
Still, optimism prevails.
“It’s been a devasting year, but there are encouraging signs that point to better days ahead, Valentine said.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
