MGM Resorts International and Wynn Resorts Ltd. both announced over the weekend that they were closing their Las Vegas casinos until the coronavirus threat passes. But not the giant Venetian down the street.
The property, owned by billionaire Sheldon Adelson’s Las Vegas Sands Corp., is keeping its doors open, relying on safety precautions – such as canceling meetings and shows and frequently wiping down slot machines – to keep employees and guests safe.
“Our team members are our most valuable asset and we have every intention of getting through this challenging situation together,” the company said in a statement. Management is still assessing the situation on a daily basis, and plans could change.
Casino closures in the divided city follow a mandatory order issued in Macau last month requiring an unprecedented 15-days of non-operation. The measure was praised by the public for containing an initial local outbreak of the Covid-19 coronavirus in February.
But at Adelson’s Sands resort in Las Vegas, customers still ate and gambled yesterday. Many other hotels and casinos in Las Vegas remained open, as does air travel to McCarran International Airport. A Sands employee cafeteria is being shuttered, to limit close contact, with workers being given other food options. Unlike other operators, though, Sands said: “The company is not considering layoffs or any changes to any of our existing health-care benefit plans.”
For now, the company’s position stands in stark contrast to that of President Donald Trump, a former casino owner himself whose political rise was supported by Adelson. On Monday, Trump called for Americans to avoid gatherings of more than 10 people. “We have an invisible enemy,” said the president, who was criticized by some for not recognizing the threat sooner. “This is a bad one.”
Adelson has been a close confidant of Trump and one of his biggest donors, making the apparent split more notable. In fact, the president was supposed to speak at this month’s Republican Jewish Coalition conference in Las Vegas, held at Adelson’s Venetian. Trump canceled as the virus threat escalated, and the event was postponed.
The showdown over whether to close casinos comes at a time when the industry is pleading for relief from lawmakers.
“In a matter of days, the U.S. casino industry went from a growing, thriving segment of the U.S. economy to a near standstill,” American Gaming Association Chief Executive Officer Bill Miller said in a statement seeking stimulus funding. It followed airlines making their own push Monday for $58 billion in aid from Congress.
The casino industry, like so many, is wrestling with how best to survive the pandemic. Government officials in at least a half-dozen states, including New York, Massachusetts, Ohio and Illinois, have ordered casinos to close in hopes of preventing the spread of the virus.
In Las Vegas, the biggest U.S. casino market, operators have been divided. On Sunday, Nevada Governor Steve Sisolak ordered schools and state offices shut, but he stopped short of casinos, saying he would “strongly support” any operators that did close. MGM and Wynn went ahead and did just that.
Casino giants Caesars Entertainment Corp. and MGM Resorts International are drawing down their credit as they cope with coronavirus fallout. Caesars said Monday that it would tap more than $1.15 billion from its revolving credit lines. Earlier, Bloomberg News reported that MGM is planning to draw down as much as $1.5 billion of its backup loans.
Meanwhile, Wynn Chief Executive Officer Matt Maddox told employees and guests he’s been consulting with an infectious disease specialist and following federal guidelines on crowds.
Some industry insiders also point to Macau, which took swift action, shutting down all public events in January, just before the big Chinese New Year, followed by a 15-day closure of the casinos in February. Business remains slow, with access limited. But the region, one of the top tourist destinations in the world, reported only 12 cases since the crisis began, with 10 having since been discharged by the local hospital, according to the government information bureau.
Other casino operators, such as Caesars Entertainment Corp., Boyd Gaming Corp. and Red Rock Resorts Inc., are staying open. Business-interruption insurance – which could be paid if a government orders a shutdown, but not if the company decides to close on its own – is one factor in the thinking, according to Bloomberg.
Compounding the decision-making is the huge debt the casino industry carries, due in part to feverish dealmaking over the past few years. Caesars, for example, is being acquired by Eldorado Resorts Inc. in a transaction worth a combined $17.3 billion in cash, stock and debt when it was announced last June. Caesars and others have been drawing on their revolving credits lines, to save cash for the tough times ahead.
The Las Vegas-based operator of properties such as Caesars Palace and Planet Hollywood has canceled all live events through the end of March, closed its buffets and cut staff.
“We are taking these bold measures now and look forward to welcoming guests back to enjoy world-class entertainment experiences as soon as we are able,” Caesars said in a statement.
DB/Agencies
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