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Land-based casinos might only fully recover in 2022

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2020 has been a year of hard knocks for the casino industry with casino hubs like Macau and Las Vegas impacted the most.

The gambling industry is experiencing what is perceived to be as one of the worst years to date. The current COVID-19 pandemic has left the industry, along with many others, restricted and uncertain of what the future may bring.

For gambling hubs such as Macau and Las Vegas, the pandemic has caused the biggest revenue loss of all. A compilation and publication of the Q3 revenue reports revealed all.

The question for many is how big the impact of COVID will be on both the Vegas and Macau market.

Macau expected to suffer over $800m loss

A recent Bloomberg survey estimates that Macau casinos will see a combined EBITDA loss of about $823 million for the three months leading up to the 30th of September.

Participants in the survey included seven brokerages who estimates that Macau's seven casino operators will likely report negative EBITDA for the third quarter.

It is the belief that SJM Holdings will see the largest year-on-year decline in company EBITDA falling about 171%. MGM will follow with a 150% drop and Wynn Macau 144%.

The Macau casino industry has suffered greatly so far, seeing a 90% revenue loss in the past 6 months compared to the 2019 levels. The main reason being the limits imposed due to the COVID-19 pandemic.

Despite visitors being given a travel bubble to visit Macau during the Golden Week holiday, reports show that the number of visitors was down 84%.

The Government Tourism Office of Macau also predicted a 90% decline in visitor numbers for the entire year of 2020. With the region already seeing an 87% decline in visitors for the first 8 months of the year.

Years of recovery ahead

Las Vegas has been hit extremely hard by the COVID-19 pandemic. A Las Vegas Casino owner, Michael Gaughan revealed that he believes it might not recover until 2022.

Gaughan has been in Vegas since 1952 and stated that the current pandemic is probably the worst thing that has ever happened to it.

All casinos got the order to shut down mid-March to help stop the spread of the virus. The state only allowed them to reopen in June. While most of these hotels reopened, they now offer reduced hotel occupancies and fewer amenities. Thus, visitors don't necessarily have access to nightclubs, shows or buffets as they would in the past.

Some resorts remained closed while others opened periodically, only to close back up again due to lack of customers. Gaughan stated that Strip hotels, in particular, will have their work cut out for them and believes things will only be back to normal by 2022.

The South Point is currently focusing on staying the course and while 1,800 employees are back on the job, there are 400 less than pre-pandemic. Gaughan also noted that a lot of business is with the local market and people have been taking care of him. While the casino isn't making large amounts of cash, they aren't at a point where the money is lost either.

This is not the case for many casinos, South Point is one of the lucky ones. Many casinos are still on lockdown or struggling to stay afloat.

What does the future hold?

Both Macau and Las Vegas are considered two of the biggest and most entertaining gambling playgrounds in the world. With a lack of tourists and visitors scared to leave their homes, it's hard for local casinos to stay afloat.

It's unclear what the future holds but it is safe to say that tough times are ahead with land-based casinos, unlike the online casinos, facing even more struggles until life returns to normal. With second waves of the outbreak hitting many regions across the globe, there's only hope that it will end soon and the industry can work its way towards normalcy once more.

Published: November 4, 2020

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Article by Stelly

CasinoWow Contributor

Hey there! I am Stelly, and happily, I'm part of CasinoWow's content team. It excites me to be able to write and share with all gambling enthusiasts unbiased reviews and news that contribute to the gambling community and industry. Thankfully, I also have the chance to help you make an informed choice for casino brands and games, as well as provide interesting guides and news.

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