Vegas Casinos Gradually Start Reopening Today
New Safety Protocols
After several quiet months, the Las Vegas Strip is about to get busier today as the city reopens casinos. Caesars Entertainment (CZR) will welcome customers back to Caesars Palace and Flamingo today, and to Harrah’s tomorrow. Caesars CEO Tony Rodio noted in a statement , “initial customer demand to visit the Las Vegas Strip has been much stronger than anticipated.”
Because infections spread in crowded, indoor spaces, where lots of people touch the same items, casinos were seen as particularly dangerous during the pandemic. Now, casinos are implementing new public health measures to keep visitors and employees safe. These protocols include sanitizing surfaces and as temperature checks for employees and guests. Additionally, many of the famous Las Vegas buffets will stay closed to prevent infections from spreading through food and shared utensils.
The Impact on Casino Company Stocks
The pandemic has battered casino companies. Las Vegas Sands (LVS), MGM Resorts (MGM), and Wynn Resorts (WYNN) saw their stocks tumble by over 25% this year. Caesars Entertainment fared slightly better, perhaps because it does not own properties in China, but it still suffered a 16% drop.
Chinese gambling establishments closed before US casinos due to coronavirus, but they have also reopened before their American counterparts. Macau, Asia’s gambling hub, gradually restarted operations in early April. Though its casinos are not operating at their normal capacity yet, revenue trickling in could help companies with properties in Macau recover from a difficult start to the year.
The Road to Recovery
Analysts expect Las Vegas’ comeback to be gradual. It will likely take a while for people to feel comfortable flying again. Additionally, large events like weddings and conferences will probably not restart for some time.
Analysts are looking at which stocks have the highest exposure in Las Vegas and which ones may be able to lean on casinos in other parts of the country and the world to help them bounce back. MGM’s assets are concentrated in Las Vegas, whereas Las Vegas Sands gets only 9% of its adjusted cash flow from Vegas operations. Similarly, Caesars has casinos sprinkled throughout the country, which people may be more willing to drive to, rather than getting on a flight to Las Vegas. Investors, business owners, and customers will be watching closely this week as Sin City reopens its doors.
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