COVID-19 has swept across the globe in the past month, shutting down businesses and entire industries as it spreads rapidly across the globe. The gambling business has not escaped the Coronavirus shutdown, and many casinos around the world have announced closures, layoffs, and furloughs as people retreat indoors, governments order closures, and casino stock prices fall rapidly.
Just this week, Caesars Entertainment announced that 90% of its casino staff would be furloughed. It’s estimated that as many as 16,000 casino staff are out of work in Atlantic City. Economists across the world are singing in chorus about a global recession worse than 2008. None of this indicates good things for land-based casinos in the immediate future.
The economic pain is being felt everywhere. Shows have been cancelled or postponed at the Hippodrome in London, Macau casinos have reported slow businesses, and the Crown casinos in both Melbourne and Perth have temporarily closed their doors.
Will Casinos Recover Quickly?
Renowned economists around the world have given a diverse range of opinions about how the financial impact of Coronavirus will unfold. Some tout a V-shaped recovery, with a sharp decline followed by a rapid recovery in the fourth quarter. Others, including from global institutions like the World Bank, have warned of a massive global recession to rival the one that happened in 2008.
How quickly casinos rebound from COVID-19 depends on a number of factors such as government restrictions, their financial ability to remain solvent and reopen in the future, and the behaviour of the virus itself.
Countries around the world are attempting to “flatten the curve,” and those which have done so successfully, such as China, are beginning to reopen their economies slowly. Only when this is achieved can many casinos consider reopen, so much will depend on the success of the measures taken.
However, as entertainment venues with lots of opportunities to touch communal objects such as cards, dice, and buttons on gaming machines, it’s uncertain that the public will rush back to land-based casinos any time soon.
Could the Coronavirus push players online on a more permanent basis? This is something that will only become known in time.
Casinos Stocks Recover Slightly
Casino stocks in all sectors have crashed as a result of COVID-19, but in recent days, they have made a mild recovery from their worst lows. At the time of press, Wynn Resorts was trading at $48.50, off it’s low of $43.02, but still a far cry from its yearly high of $151.62.
Caesars Entertainment is currently trading at $6.28 after visiting lows of $5.02 in mid-March. It is also a long way from its yearly high of $14.63. Many investors are looking at these stocks as potential long-term investments. Others remain cautious as the true financial impact of the pandemic will not be known for at least another financial quarter.