Betting on the Recreation: Domestic gamblers have built casinos in Las Vegas and across Nevada during the pandemic. But a full recovery is still two years away.
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Nevada recorded $ 3.462 billion in revenue from its casinos in the second quarter of 2021, making it the largest quarterly gambling win in Silver State history – a signal that the gambling industry is in recovery mode.
According to the Nevada Gaming Control Board, the state generated $ 1.2 billion in gaming revenue in June, the fourth straight month of billions of dollars and an increase of 14.6% from June 2019.
“If you’d told me in March that this was going to happen, I would have said, ‘Yeah, right – there’s no way,'” said Michael Lawton, a senior research analyst with the Nevada Gaming Control Board. “But the numbers are so strong every month.”
Every market rose above pre-pandemic levels in June 2019, with the exception of the Las Vegas Strip, which was down 1% compared to the same month. Downtown Las Vegas, a strong local market, hit its highest profit ever at $ 79.1 million, up 51.5% from June 2019.
Across the country, slot machine revenue was the highest in the state’s history. In June, the state raised $ 868.1 million in cash from slots, 36.4% more than in June 2019. Slots on the Strip also had a record $ 376.8 million in revenue in a month, nearly 35 % more than in June 2019.
While the Strip still needs convention business and international travel to make a full recovery, American gamblers are spending enough money in Sin City to keep things afloat. The revenue from the casinos on the Strip for the second quarter of 2021 is the third highest ever at $ 1.79 billion. The quarter is up 8.3% compared to the same quarter of 2019. But since the start of the year, the strip is down 11% compared to the same point in time in June 2019, meaning the tourist-dependent strip still needs time to recover.
“The Strip was down from June 2019 but had an incredibly strong comeback for the quarter – the third-best quarter for the Strip ever,” said Lawton. “The trend is definitely in the right direction.”
Analysts agree – the Strip is making a faster comeback from the dog days of the pandemic when the casinos were closed for more than two months. According to a report released by Fitch Ratings in early July, the Las Vegas Strip will recover fully in 2023, a full year earlier than the company previously expected.
“This is being driven primarily by a strong backlog of domestic recreational games,” the Fitch report said. “Our revised assumptions take into account the potential for renewed pandemic restrictions given the slowdown in domestic vaccination and uncertainty surrounding virus variants …”
But the wave of demand, driven by the fact that Americans are ready to lose and feel more confident thanks to federal stimulus money, might not last. The Delta variant has led to an increase in infections and Nevada has reintroduced its mask requirement in most casinos for all employees and guests. The uncertainty of the future – will there be another economic standstill or other restrictions – makes analysts wary.
“These are uncertain and unprecedented times, and we can only rely on these two words,” says Brendan Bussmann. Partner and Director of Government Affairs with Global Marketing Advisors. “The fact is, we are still at the beginning of our recovery. Right now we are probably in the first quarter and with the mask mandate and we have just been punished on the first down and have to figure out how to go on. “
The reinstatement of the mask mandate, which was dropped in mid-May, has put casino operators on defense to protect their slow recovery. Casinos were once again able to operate at 100% capacity in May. In a letter to staff, Bill Hornbuckle, CEO of MGM Resorts, urged everyone to get vaccinated while criticizing the state’s mask policy.
“This is another daunting step backwards if we should focus on continuing our recovery,” wrote Hornbuckle. “Along with the heartbreaking thought of more illness and death, I fear that progressively more restrictive measures, including a return to social distancing and capacity constraints, could be imminent if we continue down this path. This would be a severe blow to our community, industry and economy. “
Bussmann says that as long as there is no further shutdown, he expects Vegas “will continue to ride the wave”.
“I think the most important thing that people have to focus on right now is sustainability,” adds Bussmann, “we’ve seen the pop and now it’s about holding these consumers back.”
For Lawton, he believes that once the numbers are in, July will be as strong as June thanks to the opening of the new Resorts World casino and blockbusters, sold-out events like the Colin McGregor fight and concerts like Bruno Mars and Garth Brooks. But Covid-19 variants could get Sin City in trouble.
“I think July will probably look like what we’ve seen for the past four months, after that it just goes on, with the mask mandate and what we’re seeing with the pandemic, it’ll be a little foggy,” Lawton said .
