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Tags: las vegas | casinos | social distancing | economy

Vegas Bets on a Poor Hand as Casinos Reopen

an aerial view of the las vegas strip
(Matt York/AP)

By    |   Monday, 04 May 2020 10:18 PM EDT

As Las Vegas casinos get ready to welcome gamblers back, they face a double hit, according to a Wall Street analyst: lower revenues and higher promotional fees.

Casinos will be allowed to reopen with occupancy limited to 50% and gaming machines' numbers reduced, according to the Nevada Gaming Control Board. Betting positions per table also must be reduced to keep social distancing regulated.

"The challenge with the Strip is that it's a destination market," Barry Jonas, an analyist for investment firm SunTrust Robinson Humphrey, told Fox Business. "A lot of your VIPs, per se, are coming in on an airplane."

Slot machines typically have only a 50% utilization rate anyway, but games such as craps, where part of the experience is the crowd gathered around the table is lost, Jonas noted.

To make up for the cut in occupancy, VIP customers will be the focus, he said. The Las Vegas Strip is a destination market, so charter flights, free rooms and promotions are "on the table," he said. That will squeeze margins as casino operators "start fighting for less players."

But, Jonas added, one shoud "never write Vegas off" even though there are "severe challenges" ahead, including the potential for more online gaming.

The Vegas Strip brought in a total of $18.7 billion last year, including all night life. That has been cut severely by a lack of air travel to the city.

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US
According to a Wall Street analyst, as Las Vegas casinos get ready to welcome gamblers back, they face a double hit: lower revenues and higher promotional fees.
las vegas, casinos, social distancing, economy
234
2020-18-04
Monday, 04 May 2020 10:18 PM
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