Will Vegas become a gambling town again?

Will the casinos now have to focus on the gambler in fore see able future?
Since when they open alot of the restaurants, clubs and pools will not be open or at full capacity for awhile.
Will the red chippers and occasionally green be more important than they have been?

 

That would be a welcome retro twist!

 

Not in major numbers unless airlines can get people to really gamble on getting there

 

My guess: not really. If CET and MGM only open a few resorts initially (which seems to be the expectation at this point), then that's not a lot of rooms to fill. The other companies had fewer rooms to fill to begin with. Gamblers will be the first to come back to Vegas and the hardcore gamblers should be sufficient to fill those rooms. But those people will come anyway because they want to gamble. I expect gamblers will still get offers, but perhaps only marginally better than the offers they received pre-pandemic

 

A lot will depend on social distancing rules and capacity caps, but is the cap is 25-50% I believe that the following will happen. Red & green chips will disappear. Having 1/2 capacity at the table mean table minimums will need to double and when you factor in the extra cost to run the game most likely minimums will be raised 3x. Slots, which always had the higher profit margin, will become even more important as they require less human interaction. However since fewer slots will be in action expect the slot minimums to also increase. I would not be surprised if the 1 or 2 times line bet are disabled, so a 50 line penny slot will now require a minimum of $1.50 per spin. In fact depending on how long the casino projects that the restrictions will be in place, I could see buffet seating, poker room and sports book space all being turn into extra space for slots.

 

This is strictly opinion, but...

Vegas is going to HAVE to become a gambling destination again.

The common argument is that there are casinos everywhere now, casinos don't make Vegas special anymore.

Well, that's only somewhat true. There are a lot of casinos in the United States, but they aren't actually EVERYWHERE. Every major US city most certainly doesn't have a casino.

Do you know what every major US city DOES have? Restaurants. Clubs. Bars. Malls.

 

If they were at the max at the new "capacity", which is a big if and they are saying that is 25-50% of normal capacity, then it would not look good for red chip players at all. A craps table still costs them the same, yet it has half the players, so a doubling of the minimums would get them to the same point. With BJ and carnie games seating 3 instead of 5, that's 40% less earned revenue on the same tables, so doubling that would get them slightly ahead. With every other slot and VP turned off ( or as @zoobrew suggested relocated to maintain the # of electronic games) there could be a foreseeable doubling of denominations to get the same revenue out of the same square footage) if they kept the payouts the same.

But it all depends on supply and demand. If too many people are lurking and waiting to squeeze into a table or hop on a machine, then they can raise the minimums. If it resembles a ghost town, and people walking by the black chip BJ tables and Green chip craps tables, then, just as they always do, they will adjust it on the fly to get as many seats filled as possible. Without nightclubs, concerts, shows, pool parties, spas, and other things people used to spend on, many people who aren't big gamblers may opt to go elsewhere other than las Vegas for a while, or those that are in town may find themselves playing more than usual, which could result in less empty seats.

As always, the house will do what works for them. They have a lot of staff that are available to work, especially if not every large casino is open, or if staff is moved from events to gaming, so they can open more tables, but they won't do it unless it makes financial sense. They can change a craps table from $10 to $25 in a split second and adjust it down just as fast. They are experts at setting the minimums to maximize revenues based on traffic. They will know after the first week what the buzz will be like, and adjust accordingly. If I were a betting man (which I am - who isn't?), I would bet that they will double the minimums right off the bat wherever they can, unless they notice their hold takes a significant hit. For dining, I could see long lines for the quick grabs of food like the crepes at Paris or the miracle mile fast food joints, and harder to snag reservations at the semi-filled restaurants that do open. I think downtown could still be a zoo, since they already cram a lot into tinier spaces, so I think the red chippers may flock too the offstrip places, where they will be more than happy to get the $10 table player.

I Hope that didn't sound too negative. I hope more than anything that it opens and the virus becomes a non-factor sooner rather than later. All of this is based on the casinos being at their new maximum capacity. I could see a lot of the elderly crowd staying away for a while too, and with less conventions and close to zero international guests, mid-week could be the total opposite. Less players and diners could mean great offers, more attractive minimums, and choice slot selections - it all depends if they need to draw people in or not. I can't wait for the first trip reports to start rolling in again to see what the new reality is.

 

i would LOVE to see the business plan math on how a red chipper could be important. meaning, you can't pay a dealer, a pit boss, a cleaner now, and all the other staff involved with that level of revenue stream (this was before the reduced #'s of patrons at table games) and expect much more than what you get at Joker's Wild or other Boulder Highway joints. the math just doesn't add up.

 

While I certainly don't foresee Las Vegas becoming the Branson of the High Desert, I think this will certainly put the damper on any grandiose (there's that word again) mega-projects or expansion plans in the near future. (Yeah, I'm talking about YOU, Resorts World.)

I'm sure the majors will take their sweet time opening many of the properties until the demand is clearly there. I might even speculate that some will be shuttered for some time (Rio?) or fail to reopen in their current form at all. From a beancounter perspective, a disruption like this is a good excuse to ash-can underperforming properties in the portfolio.

 

agreed, a big factor in all of this which i have heard squat about is conventions. the official las vegas convention center is in the process of adding 1.4 million square feet. wynn just added 400,000 sq feet. caesars soon to be opened convention space behind hurrah's is another 500,000 sq feet.
that's 2.5 million square feet of investment which will demand a return in some fashion-meaning peter will have to be robbed to pay paul.

 

How about that super-people-mover that is (was?) under construction under the LVCC?

 

the entire lvcc expansion was 1.4 billion (estimated, finally cost will probably be closer to 2), that people mover was 53 million. done by a private company. surprised?

 

I think what needs to be taken into account is that unlike the recession, people with all sorts of bank accounts will not come back in droves, not because they financially can’t, but because they don’t want to die.

A lot of Vegas reports are indicating executives know they will not be profitable this year, and the idea is to just get people back to being comfortable before generating revenue is a viable idea. While I don’t think the red chip table player will be getting RFB, I do think that green to black chip players will be getting tangibly more in comps. Casinos can make money off of these people, and they already got comps, but probably less so in recent years when the economy was booming. I think there’s this misconception that once Vegas opens, every room of the few hotels that are open will be full instantly. I doubt it, it’s easy to shut things down but far more difficult to open again and assume human behavior will be similar. The population on this site isn’t representative of most people who visit Vegas, which is the casual tourist who goes one or twice in a lifetime. You think those people will go to America’s Petri dish as their first trip in 2020?

We’re all speculating but I strongly believe a lot of the regular gamblers will sit out while the few brave ones go and let us know how it went, and will then and only then make a determination on when it feels safe to go. I love gambling and want to go more than anything, but it is nice saving money and not being sick, both of which aren’t guaranteed in that town, even with the strictest social distancing/et. al policies that will be implemented once things do reopen.

To answer the original question, do I think Vegas will again be a gambling town? Absolutely, who else would go back instantly. But do I think it will be much of anything for 3-4 months? No.

 

Hmmmm..... Vegas going back to being Vegas.
What a novel idea.

 

Might be time to re-submit my plan to the bean counters about a retro Vega$. They laughed at me the first time.

 

Yeah this is interesting.

I mean, is operating at a loss better than not operating at all? Maybe for awhile. Not for the shareholders in the short-term, but having people employed is also in the company's interest.

Can you break even on a $10 craps table with only 6 players as long as you have 6 all the time? Let's say avg on the table per player is $30/hand, so $180-ish a hand total. 100 hands an hour, $18,000 at risk, $270 EV for the house @ 1.5%. Should be able to break even on that, I think.

Restaurants at 50% capacity or less can't make any money unless they raise their prices.

Are non-gamblers who pay for their rooms going to go when there isn't much to do?

I think they're gonna desperately need big big gamblers and do whatever they have to do to get them. That doesn't necessarily exclude lower rollers.

I can definitely see them expanding slots into other floor spaces temporarily, I've seen terms like "reconfigure" used, as opposed to just shutting off every 2nd machine. Reconfigure could mean they take some out and put them in storage, but it could also mean moving them elsewhere on the footprint.

 

I think it may go back to what was Vegas in the distant past for while and then slowly recover to what we last knew.

 

I have a bit of experience in what properties might be thinking, as my employer shares advisors with some of the major strip properties, but since Vegas is a different market I’m not going to assume it matches up with what they’re going to do. The below is all based on the assumption that the owner/operator is solely focused on the immediate financial results, not long term or community concerns. Generally that’s a safe assumption, but maybe not as much now given that Wynn and Sands have already stressed the importance of other factors by paying their folks through the closure.

Slots - No change, maybe fewer licensed titles if they can get out of those deals since they’re more expensive, but those are also more popular so it’s a Catch-22. Possibly machines taking over table areas, but moving into event spaces seems less likely as I’m struggling to picture a property where that makes sense operationally. Those areas are purposely kept separated to appease event planners, so trying to convert those spaces would basically be like staffing a whole new casino floor as you wouldn’t be able to cover both with the same crew of folks.

Tables - I’d expect higher minimums. You can’t cut your costs at a table, so you need to increase the bet level to make up for fewer players. Even with low demand, it’s much easier to fill 3 spots at a BJ table than 2000 rooms in the hotel. You’ll see the pricing models reflect that.

Room Rates - Different properties might have different yield strategies here. A lot of it may come down to what the property’s minimum staffing level is. If they’re going to have a lot of people brought back due to labor agreements, or because they want to give their people work, then they’ll probably focus on occupancy over rate so people aren’t just standing around. If they can be stingy on their labor, then I don’t think we’ll see huge discounts. They’d rather run a skeleton crew and get people in that show a willingness to spend over filling rooms with “riffraff” and bringing on additional staffing.

F&B - Prices will go up, menus will be limited to low labor/low food cost items to make up for lack of volume, and outlet options will be limited to ensure each hit the capacity of what can be offered. No one is going to run multiple outlets at a loss just so people get a sense of normalcy.

A lot depends on what type of guest is willing to come back. There’s probably going to be a lot of adjusting on the fly once guests have a better sense of what a re-opened Vegas has to offer and can make their decision on whether or not it’s worth it to go.

 

I go to Vegas primarily for the gambling, so I'd love to see the town go back to what it was 20, 30 or more years ago with low minimums, good rules and pay tables, no such thing as 6:5 BJ, cheaper than dirt buffets, 99-cent breakfasts, etc. For that matter they can tear down the FSE, put the street back, get rid of the bean counters, and bring back the mob - but it ain't gonna happen!

It's no telling what changes we'll see in the coming months; but until Covid19 is no longer a serious threat, I don't see hordes of gamblers flocking to the casinos. Risking your money and risking your life are two different things. And by the time Vegas attracts enough gamblers to make operating worthwhile, the shows, restaurants, shops, clubs, etc. will be reopened and things will revert back to where they were at the end of last year. Anyway, that's my prediction – just don't ask me when it's going to happen!

 

My guess is the default will be no housekeeping during a stay unless you call and request it. And this will also temporarily get rid of the security checks.