The impact of the COVID-19 virus is being felt all over the world as human life has come under threat and has resulted in social distancing and closure of a number of businesses. The land based casino industry in the United States is expected to suffer significant financial losses as there is no indication as of now as to when life will get back to normal.
U.S. Casino Firms Respond to COVID-19
Over the weekend, casino operators announced dozens of suspensions and cancellations throughout the country. Some of these shutdowns were enforced by state governments while some casino operators decided to make the decision by themselves in the best interests of their patrons.
Many of the top casino operators in the country are already feeling the burn of the imposed shutdowns— the Boyd Gaming Corp., Penn National, MGM Resorts International, Caesars Entertainment, and the Poarch Band of Creek Indians are some examples.
The Boyd Gaming Corp. will be shutting down five properties in four states, leaving them with 24 operational casinos. Boyd has stated that the closures are not company policy, but forced upon them by state mandates. Boyd employees at concerned casinos will continue to be paid throughout the closure.
Penn National will be closing 12 properties out of the 41 property holdings in 19 states due to the imposed shutdown. Penn operates the Hollywood Casino in Perryville. Penn will continue to pay the affected employees until the end of the month.
MGM’s scheduled closing of its MGM National Harbor Property will be fourth shutdown in MGM’s portfolio due to COVID-19. Last week, MGM announced the closing of the Yonkers Raceway after a regular visitor to the venue died from the virus.
Caesars Entertainment will comply with the directive to close Harrah’s Philadelphia, but has not commented on their decision for the rest of their properties. However, Caesars has announced that all live entertainment performances held on their properties will be cancelled.
The Poarch Band of Creek Indians will be closing three of their casinos in two states. It’s Atmore and Montgomery properties will be closed until May 30, while its Bethlehem property will be closed until March 29—although this may change based on circumstances. Employees will continue to be paid fully.
Maryland Imposes Indefinite Suspension
Maryland Gov. Larry Hogan has decided to suspend all casino operations within the state of Maryland this Sunday to help prevent the continued spread of the COVID-19 virus currently spreading throughout the world. Maryland’s six brick and mortar casinos—as well as five racetracks and live simulcasting sites—must close by midnight this Monday. They can only re-open when Gov. Hogan lifts the state of emergency.
Maryland’s aggressive response to the COVID-19 pandemic follows the lead of 12 other states before it: Alabama, California, Illinois, Indiana, Massachusetts, Michigan, Nevada, New Mexico, New York, Pennsylvania, and Rhode Island. These states have opted to suspend all casino operations, or severely limit the crowd sizes in casinos.
Gov. Hogan has stated that, while casino shutdowns are definitely an aggressive approach, his office is confident that it is the right thing to do. While the private sector—namely, casino operators—have done their part in cancelling events and controlling crowd sizes, Gov. Hogan’s pronouncement hints that his office does not want to wait for individual operators to voluntarily shut down their operations. Instead, the state will compel them to do so, in the name of public safety.
Gaming Industry Losses to be Massive
The six casinos in Maryland to be affected by the shutdown are the Hollywood Casino Perryville, Rocky Gap Casino Resort, Horseshoe Casino Baltimore, MGM National Harbor, Ocean Downs Casino, and the Live! Casino & Hotel in Hanover.
The investing world has worried about the spate of casino closures tanking the stocks of gaming firms. It is clear that the suspensions of casino operations is a necessary response to the COVID-19 pandemic, and gaming industry experts suggest that more states will follow the lead of Maryland and 12 other states.
Carlo Santarelli, gaming analyst for Deutsche Bank, sent a note to investors advising them to prepare for the worst, as both the public and private sector will likely push for more shutdowns in the near-future. Santarelli has stated that losses will be inevitable, but affirmed that such shutdowns may be necessary to promote social distancing—preventing the spread of the disease.