Casinos After COVID-19

Update May 10, 2020 I'm sorry but it's very clear now that the Las Vegas Casino and Resort industry will not return to normal for what may be a very long time. Here's what's needed for the "old Vegas" to return:

1. A vaccine or end of the virus. Without that social distancing and limits on occupancy will continue and the facts of life say casinos can't operate with those limits.

2. Cheap airfares and nationwide airline services must return. About 75% of the customers for Vegas casinos fly in and right now about half of the airline industry is grounded by the virus and if airlines do start flying again they are likely to raise ticket prices to make up for the seats that can't be sold because of social distancing requirements.

3. The mindset of tourists will have to change. Too many Vegas customers have said they don't like the idea of playing with limits on aeating, and having to wear masks, and sitting behind plexiglass. And then there are those who want the clubs to be open and the big concerts, and they'd just rather wait till "normal" returns.

4. Dealers and employees are not exactly demanding a return to work. Like so many others they have health concerns and fears too.

5. And perhaps most important is the economy of scale that makes casino resorts profitable. MGM said it: without 50% occupancy it loses money opening a resort and Nevada will not allow more than 50% occupancy. So the tipping point for opening may not be reached.

There were hopes that Vegas casinos would reopen in early May, and then mid May and now some resorts are accepting reservations for June 1st. But that could be mid June or July or August... or not until there's a reason to stop social distancing and the 50% limits. In the meantime New York and California could take advantage of this. Watch my comments below.

Update April 25, 2020 It's becoming clear that a quick reopening of Las Vegas casinos is not going to happen. Casino companies which had anticipated reopening on May 1st are now not accepting hotel reservations until May 22nd. And if casinos can't reopen until a two-week countdown to "Phase 1" can be completed then it's very possible we won't see a reopening until June or even July.

But what kind of casino reopening will there be? We already know that casinos won't be allowed to open all slot machines, all table games, all seats because of social distancing. Frankly I don't think any table games will open at first and I think only slots and video poker games will open initially because they require the fewest number of employees and cleansing and maintenance.

We also won't see clubs and pools and spas and gyms and lounges reopening, and that begs the question how can casinos justify their resort fees without these amenities being available?

While there may be some or many employees available for reopening will the customers be available for reopening? There are those who say there's a pent-up demand for casinos but will they come from New York or from Chicago?

Sorry, but it appears Vegas casinos will be among the last of the non essential businesses to be back.

Update April 19, 2020 The Wynn casinos is the first of the Vegas casino companies to reveal its health plan for reopening. The most significant part of the plan is the installation of thermal cameras at its entrances. If a guest registers as too hot they will be taken to a private area for a private temperature screening. If they register 100-degrees or higher they will not be allowed to enter. Wynn will also close alternating table games and will limit the number of players. At craps, for example, no more than three players on each side and that's significant since larger tables can have as many as eight or ten players on each side. Blackjack will have three players. There will even be limits on the number of passengers in limos.

It has been about a month since the first casinos were ordered closed as part of the "social distancing strategy" to reduce the spread of the Coronavirus COVID-19. The feeling now is that the shutdowns have helped and some are looking forward to businesses including casino gambling reopening.

When casinos do reopen I'm expecting some immediate changes and to hear that there are plans for long-term changes. These changes could be as drastic as an end of cocktail service and an end to the use of gaming chips.

The first change I'm expecting is something that was started just before the shutdown. I'm expecting that the number of players at table games will be reduced and I'm expecting a reduction in the number of working slot machines and video poker machines so players have some separation. I'm also expecting that machine minimum bets and table game minimum bets will be higher than usual at many casinos. The higher prices to play will not only help the casinos to rebuild their coffers but it will also help to limit the number of gamblers with price rationing of seats.

I'm also expecting casinos to resume handing out disposable gloves and perhaps a return of the cloth gloves casinos gave to patrons before tickets replaced coins. It is reasonable that casino dealers will be wearing masks and some casino personnel will wear gloves. There may be an end to shuffling of cards if dealers must wear gloves and automatic shuffling machines will become the norm.

I wouldn't rule out mandatory masks being given to players. If players are required to wear masks that also opens the possibility that all smoking will be prohibited. You can't smoke wearing a mask. And if you must wear a mask how can you drink cocktails? So this might mark the end of cocktail service at tables and machines.

Another immediate change is the end of the traditional self service casino buffet. I'm expecting to see more servers in the buffets and when a server isn't practical then I'm expecting to see plates and bowls prepared and ready for each customer. Gone will be the days when you scooped up all the chicken soup or stuffing you wanted with serving utensils. Many high end buffets already have servers at many food stops so this practice would be easy to implement.

There is also a strong possibility that casino players will have to undergo a temperature check before being allowed to enter. This might also be practiced at restaurants outside of casinos.

My next expectation is something that will be announced but may take weeks to implement. I'm expecting casinos to eliminate chips or cheques at table games and instead of chips or cheques players will bet using computer tablets or computer screens mounted at each player position. Casinos might halt table games until chips can be replaced with computer systems, and if there's a lack of dealers casinos might reopen for slots and machine games only.

Do we really need chips? No. And with keypads and computers so widely used now making the transition will be easy. The technology is already in use in casinos at electronic blackjack, craps and roulette games so adding computer screens to live tables with dealers will be easy.

Frankly, I think both customers and casino companies will welcome the change. When dealers don't have to sell or color-up chips it will save time and money and manpower. Errors and losses will be cut. In fact, I think craps games could be run with two people -- a stickman and a boxman to supervise and to record each throw of the dice in the table's computer set-up. And the jobs of the "base dealers" will actually be eliminated as players make their own bets on the box numbers.

Players should also welcome the change. In craps many problems would be eliminated: no longer would cash be thrown on the table during a roll of the dice; chips would not be placed where the dice are thrown; no hands would be on the table to interfere with the dice; and late betting and misunderstandings about where chips are placed would be eliminated. It would also be faster and easier for players to enter and leave the game without delaying play.

Let's face it, casino chips are filthy and are rarely cleaned. So let's get rid of them. We don't need them. We also don't need resort fees and parking charges but I don't think the casinos will give them up. Yes, we might see a short-term hiatus but they've become a big part of the industry's math to expect them to be stripped. And don't think the casinos will offer tons of free play promotions either. The casinos have to make up for millions of dollars of lost revenue so while they might cut costs including the cost of dealers they are not likely to cut revenue streams.

There is an even bigger question: if the casinis open will they come? I am not sure they will in the first few months. There has been a lot of economic damage done to family finances and to the convention business and it will take months for conventions to be rescheduled and for disposable income to recover. Casinos need an economy of scale to operate efficiently. We might see select properties reopen initially but not full company properties.

And if you think select properties might reopen first you must consider what games will reopen first? Because of social distancing I am sure the less profitable games and machines will be dark when the casinos reopen.

What are your thoughts? Email me at alan@alanbestbuys.com and let me know. I'll respond.