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Las Vegas Strip Has a Long Road to Recovery Ahead of Itself

Article by : Helen Sep 11, 2020

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According to a report published by Fitch Ratings in June, the whole US gaming sector will need up to three years to bounce back to the revenue levels deemed normal before COVID-19 steered the pot. But for the Las Vegas Strip – the number one commercial gambling market in the U.S. that turned $6.6 billion in revenue in 2018 and employs an estimated 450 thousand people – the road to the pre-coronavirus business-as-usual may be one of the hardest.

Even though the Las Vegas casinos were allowed to reopen their doors on June 4, not all of them did. Those that decided to welcome patrons into their establishments are still struggling. The main reason for that is its heavy reliance on tourists that used to fly to Las Vegas, both from within the U.S. and foreign countries, as well as conventions and other large-scale events.

Wearing a mask remains mandatory inside the casinos, combined with other measures like maintaining physical distancing, enhanced sanitizing, and protective barriers placed where players may not be able to maintain that distance. However, there is a rising concern that the influx of visitors that come to Las Vegas may contribute to the coronavirus transmission.

A recent ProPublica analysis reports that contact tracing may be difficult when it comes to outbreaks originated in Las Vegas. Another finding of that analysis emphasizes that as people remain highly mobile, they may bring the coronavirus back with them into their local communities.

There is a sliver of hope, however: currently, there are 150+ vaccines in various stages of development all over the world. But even if the development is fast-tracked and vaccine testing may finish in 2021, its production and distribution will also take months. In the meantime, the industry keeps trying to find a way to attract more customers with outstandingly big discounts for hotel stays and services.

Despite all the best efforts, the effect of the lockdown and closure orders has already proven to be devastating for the industry – and, ultimately, for the people who depend on it to make their ends meet. Las Vegas Strip casino revenues dropped 39% this July compared to last year, as reported by Bloomberg.

According to the U.S. Bureau of Labor statistics, Nevada’s unemployment rate remained high at 14% in July 2020. Among all 50 of the U.S. states, only New York and Massachusetts have more dire unemployment rates.

Furthermore, as September arrived, many casino operators found themselves in a pickle, deciding whether they will be able to bring furloughed workers back on the job or they will have to lay them off. (Legally speaking, workers can’t be furloughed for more than 6 months – and most of them were put in this position in March.) For instance, MGM Resorts has recently announced it was letting go of its 18 thousand employees – and there is hardly any doubt it will be the last company to do so.

All in all, Las Vegas faces a dilemma with no easy answer: its residents rely heavily on gambling-related tourism, but going back to business, as usual, is likely to lead to more infections and deaths. Waiting it out is hardly an option as a vaccine is still far from finished and distributed. While its officials and casino operators attempt to figure it all out, all we can do is watch how it unfolds in front of our eyes – and be amazed at how everything around us transforms to reflect the new coronavirus-era reality.