Gaming Losses Estimated At $21.3 Billion Due To Coronavirus Closures

It’s been one week since Nevada Governor Steve Sisolak announced that the state’s nonessential businesses – including casinos – shut down for 30 days due to the COVID-19 pandemic. While it’s been odd to see the lights off on the Las Vegas Strip, it already has many people wondering just how big the losses will be when the lights eventually do come back on. Some early estimates are starting to trickle in and while the house is not going to be winning for the next 30 days, the long-term future mostly depends on whether the coronavirus recedes in a month’s time or whether this will be a protract process.

Gaming Losses Estimated Around $21.3 Billion

We’re still very early into the lockdown but it’s fairly clear that Las Vegas will be one of the places that is hit the hardest. The Economic-Policy Institute has projected that Nevada will lose just shy of 67,000 jobs. When you consider that in January, 355,300 Nevadans were working in the leisure and hospitality sector, this would be a massive cut to that workforce.

What many experts are wondering, though, is what the casino losses will be like. After all, many of those layoffs could turn to terminations if any of the casinos are forced to close permanently. Many of the biggest brands in Las Vegas have already been in touch with the White House to avoid such a situation. They’re hoping for a bailout just to survive. The American Gaming Association came out with estimates on Thursday, March 19th and they’re projecting that the losses across the country would be $21.3 billion if the casinos are expected to be closed for eight weeks. The state of New Jersey would account for $1.1 billion of that alone if they’re not able to operate over that span.

What’s also important to note is not just the impact on the casinos themselves. The AGA reports that casino closures could lead to nearly $59 billion in total wage losses for the year, which would mean the $34.4 billion in total tax revenues the casinos return would reduced. States are obviously counting on these numbers for their budgets.

The question right now is how long does this last? Of course, most casinos are prepared for a recession as any solid business should be able to weather a 20% – even 30% – decline in business. However, an absolute drop to zero in not something that anyone was ever expecting. If the lockdown is just 30 days and Las Vegas can get back to business in the middle of April, there will be some pain (and significant losses), but we can probably get back to normal not too long after that. If this lasts into the summer or fall, the situation will be far more dire.

As of Monday night, there were 212 confirmed COVID-19 cases in Clark County with four deaths.

Sports Betting Shelved Until June?

We’re hearing a lot of different timeframes as to when the coronavirus might recede and we can get back to normal life, but the sports leagues and their rumored return dates might be telling. The 2020 French Open has been moved to the end of September. As has the Kentucky Derby, which is usually run on the first Saturday in May. The 2020 Olympics, which were scheduled for July 24th, have been postponed until 2021. All of the whispers we’ve heard from the NBA is that they’re aiming for mid-May or early June.

Although nothing in those date changes or early estimates is concrete, they are telling signs. While Nevada may be hoping for a return to business after a four-week hiatus, we might really be looking at eight-to-10 weeks. And even if the casinos are able to get back to business in a month’s time, it’s not likely there will be many sports for bettors to wager on.

What’s been interesting to watch is the online betting sites as they’ve adjusted. They’re now offering betting lines on anything that moves. There are way more props (more than usual) for all of the major sports as they’re on pause down to everything from esports (like NASCAR iRacing) to fringe sports like Marbula One (marble racing), Minor Tour (golf) and all the way down to soccer leagues in Myanmar. At least they’re not just sitting on their hands waiting for things to get back to normal.

Macau Casinos Saw 88% Decline In February; Still Won $386.5 Million

To get an idea of just how bad the hurt will be in Las Vegas, we can look to the Las Vegas of the East to get a rough comparison. You might recall that all of the casinos in Macau, China were forced to close for two weeks due to the coronavirus outbreak back in February.

Overall, the Macau casinos still made off just fine as they still won $386.5 million in February, according to the Gaming Inspection and Coordination Bureau. That proved to be an 87.8% year-over-year decline. However, keep in mind that the situation will be different in Las Vegas. Sin City is completely shut down for 30 days versus the Macau casinos, which were closed for just two weeks. Las Vegas would love to have at least a little bit of revenue as that might get them through this rough patch. They’re going to be forced to live off of completely nothing, which they never expected. That’s why they’ll be asking for a bailout.

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