Coronavirus fears send casino share prices tumbling
The rise in Coronavirus cases knows no end. There has been a massive health scare across the globe with shut down to public and private industries as the situation only gets worse day after day. As of March 24, there have been 400k cases reported globally. Throughout the world, the government has been taking necessary steps to minimize the spread of virus and several countries around is in a complete lockdown state.
The COVID-19 has not only impacted human lives, but also crippled the world economy. Last week, the American Gaming Association (AGA) found out that prolonged closure of casinos in the country would lead to a heavy loss. It also mentioned that if casinos remain shuttered for the next eight weeks then American direct consumer spending could take a $21 billion hit. As of Wednesday afternoon, the doors of 37% of the tribal casinos and 94% of the commercial casinos in the United States were shut. The AGA said that over 530,000 employees who constitute of 96% of the total casino workforce are currently out of work in the country.
Nevada’s gaming workforce makes up about 33 percent of the total US gaming workforce prevented from working because of the “important health and safety decisions made by state governments,” said AGA President and CEO Bill Miller. He further added, “The impact on our employees, their families, and communities is staggering, and the implications extend far beyond the casino floor, leading technology companies that supply the industry, and the nearly 350,000 small-business employees (in the U.S.) that rely on gaming for their livelihood, are also feeling the devastating blow of this unprecedented public health crisis.” According to AGA, the wage loss owing to casino shut down could amount to $59 billion annually.
The US casino stocks were badly beaten a few weeks ago, the day after Nevada’s entire land-based industry shut. Regional casino operator, Penn National Gaming (PNG) took the biggest hit, as its share closed down over 38% from the day before to $4.52. As of 20 Feb, the shares were trading at over $38 following PNG’s deal with Barstool Sports.
The famous Caesar Entertainment’s share fell nearly 31% to $3.52, down from around $14.66 just a month ago. Like PNG borrowed $430m to ensure it maintains ample financial flexibility, Caesars’ too added $1.15 billion. Caesars’ merger partner Eldorado was down 29.6% to $7.10, a 90% decline from its price a month ago. Eldorado borrowed $465m from its $500m credit facility this week to aid its virus mitigation efforts. Boyd Gaming also saw shares falling 29.5% to $14.84, from nearly $31 a month ago. The company said that it borrowed $660m. MGM Resorts’ share price fell by one-quarter to $7.14, down from $31 last month.
If the casinos are shutting down, the workers are also being furloughed. However, the Silverton casino in Las Vegas explained that the 300-room hotel casino will remain open. The CEO, Carig Cavileer said that all “mission-critical employees” will remain on the job including security, surveillance staff, and a skeleton crew for operations. But with the business down, about 600 to 800 employees have been laid off.
In India too, with the rise of coronavirus cases to 500+, all live poker tours in India that were scheduled to run from March till May have been postponed by the Goa and Sikkim government. The largest plunge came as the company announced on Tuesday that its Casino Deltin Denzong in the state of Sikkim had been closed until 15 April 2020. Before that, similar move was taken by the Goa government, when CM Pramod Sawant announced the shutting down of all casinos in the state until 31 March 2020.
The March edition’s Deltin Poker Tournament (DPT) Xpress, National Poker Series (NPS) and April’s DPT edition have been postponed so far. Delta Corp, India’s largest casino operator’s share fell 20% in the last week, closing at INR 56.6 after Tuesday's closing bell. The stock was trading at INR 200 levels earlier this year.
Truly, the world has suddenly become a different place in the last two months, with coronavirus taking a host of nations by storm. Markets in the US, China or India has become quite resilient for some time. For more news and updates on the casino industry and coronavirus pandemic, keep reading GutshotMagazine.com and stay tuned and stay safe!
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