Slow Recovery Ahead for US Casinos
Slow recovery ahead as casinos in the United States are still coping with pandemic and tentatively reopening. Michigan, Massachusetts and New Jersey are all at different stages of their reopening this week. Find out more in our weekly overview, covering the most important developments from the casino industry in the United States.
Michigan Casinos to Remain Closed Amid Virus Concerns
With much of the US casino industry drawing tentative plans to restart operations, not all states are willing to jump the gun, fearing that a second wave of the COVID-19 pandemic may be underway. After six states reported a jump in infectious cases late on Wednesday, Michigan has decided to keep its Detroit casinos shuttered. The casinos were originally shuttered in mid-March and not even the restart of Las Vegas casinos on June 4 has changed the minds of the state regulator and governor.
Casinos are an important source of revenue for Detroit, turning their shuttering into a problem for the public purse, not to mention associated unemployment, which has reached 2.2 million Michigan residents who have filed for unemployment benefits since March.
Face Masks for Patrons Become Mandatory in Nevada
After Governor Steve Sisolak cautioned casino-goers on Monday this week that masks may become a permanent item of their casino attire, the measure is finally here. Gov. Sisolak first said that masks were voluntary but patrons were urged to wear them on casino floors in any event.
He originally refrained from imposing them as a prerequisite to enter at casinos. However, on Wednesday, the Nevada Gaming Control Board and Gov. Sisolak decided that in light of rising COVID-19 cases, masks should become mandatory in Nevada. Some experts have suggested that having all patrons wear masks would actually benefit Las Vegas’ visitation rate and lead to better long-term results.
According to Fitch, a credit agency, Las Vegas may actually need up to three years before it can see visitation and financial rates restored back to normal.
Massachusetts Still Planning on Casinos Reopening
With Massachusetts a bit of a laggard in restarting the casino industry, the Massachusetts Gaming Commission (MGC) has announced that it needs more time before casinos in the state can be reopened. Last week on Wednesday, the commission outlined stricter plans for the reopening of businesses.
The commission proposed to drastically reduce the number of slot machines, but brands have responded by arguing that should that come into effect it would not be financially justifiable for them to restart their casino floors.
Responding to this earlier this week, MGC Executive Director Karen Wells said that the commission had no intention to stop businesses from opening back up again and that the regulator would seek to create a regulatory framework that would allow businesses to operate in a way that makes sense to restart business.
Previously, casinos were hoping to open by June 25, but this deadline may now be pushed back. Ms. Wells explained that casinos would be given a two-week notice before they can reopen, and she further noted that the Massachusetts regulator will seek to introduce the strictest reopening measures in the United States.
Louisiana Goes Easy on Casinos
Louisiana has voted an amendment that would see the state casinos get a tax break amounting to $83 million over the next five years. The legislation was voted by the Louisiana Senate Revenue and Fiscal Affairs Committee and is a direct response to the COVID-19 shuttering of the casino industry, reading to steep decline in revenue streams for the public purse as well as seeing many employees either furloughed or laid off.
As per the new bill, the Senate now allows each casino to offer promotions up to $5 million to customers as free wagers and not tax them at all. However, for anything above $5 million in promotions, the normal tax rate applies, that is 21.5%.
The legislation has already outlined several spending cuts which will affect important areas of the state budget such as education.
Atlantic City Casinos Open Eateries Before Gaming Facilities
Atlantic City casinos got a tax break that some described as controversial. And while the fuming against casino tax breaks has been going on, many casinos are now tentatively trying to restart operations. They are not counting on their gaming facilities just yet, with The Golden Nugget opening their outdoor deck today, Friday, June 19, for food and drinks.
There will be no gambling going at the Nugget’s premises, however. Gov. Phil Murphy allowed eateries in the Garden State and Atlantic City in particular to start opening earlier this week on Monday. Deemed as non-essential businesses, this is the second stage of the governor’s reopening policy, which will test if the state is ready to handle the potential danger of spreading the virus further.
The next move would be for the Golden Nugget to offer gambling on its outdoor deck. That is not entirely new to the company, as the Nugget has been doing it since at least 2012 when it introduced its first gambling facilities out in the open air.
Eldorado Receives $772 Million from Share Sale, Props up Liquidity
The sale of Eldorado Resorts’ stock is over and the company has been able to add $772 million to its liquidity, selling off 2.7 million shares, the casino operator said on Thursday. Ahead of an anticipated deal with Caesars, Eldorado has been boosting its liquidity.
The company is also on its way to conclude a deal for two properties with VICI Properties, adding another $503.5 million to the company’s active assets. The company is looking for a debt raise of $3.08 billion which will help it facilitate the acquisition of Caesars Entertainment, which has been delayed due to COVID-19, and now incurs millions in surcharges per day.
However, Eldorado’s executives have confirmed that the deal with Caesars Entertainment will continue unchanged.