Gamblers aren’t able to head to their favorite casinos at present. So, how are casino companies modifying their business to survive the pandemic?
COVID-19 pandemic is wreaking havoc across the business landscape.
The casino industry isn’t spared the disruptive impact. Brick-and-mortar premises are closed around the globe. Las Vegas Strip and Macau look more like ghost towns than vibrant gambling hubs. Tight restrictions are in place and money worries abound.
There isn’t much in the way of precedent here, so we’re in uncharted waters. Yet, shutting down operations doesn’t spell doom for casino companies. There are innovative ways to overcome the crisis and stay afloat.
1. Forced Shutdowns
The biggest casino resorts around the globe are closed for business.
Mandatory shutdowns started in Asia and later spread to the US. The list includes the likes of MGM Resorts, Penn National Gaming, and Wynn Resorts. Only a few establishments remained open, but they canceled live entertainment.
We don’t know how long this state of affairs will last. What’s certain is the effects on gambling revenues are dire. The first annual quarter will look like a warzone for most.
2. Extra Precautions
Short of complete shutdowns, casino companies operate in a limited capacity.
They are in close contact with industry associations to manage the health crisis. Additional safety measures involve deep cleaning and sanitization, as well as putting sanitizing stations throughout the premises.
Many operators have decided to thin the seating arrangements and the number of slot and table games. A cautious, risk-based approach is the way to go.
3. Belt-Tightening
Another way to mitigate the damage is to cut operating costs.
This process is taking place across core areas, from raw materials to labor. Wynn Resorts, for instance, announced executive salaries will go down between 33% and 100%.
Casino companies will have to be careful though not to squeeze too tight. After all, there’s a limit to what one can salvage.
And even with measures like lay-offs, most casinos have money reserves only for months, not years.
4. Financial Injections
Casino managements are desperate to patch the dwindling cash flow.
During the previous financial crisis, many went down under the weight of debt and leverage. Those who remained more conservative managed to survive. Of course, the problem is not everyone has a mound of cash to fall back to.
Some casinos are poised to knock on the doors of Congress and ask for bails. The alternatives come in the form of direct cash payments, tax reliefs, and special bankruptcy projections.
5. Online Migration
Online channels are poised to serve as the industry’s saving grace.
Namely, virtual betting from home has surged recently. People have a lot of free time on their hands. They are ready to play for real money and casino brands have taken notice.
Online casinos and new bingo sites are ahead of the curve here. They show us where the market is headed right now. Online gambling isn’t just the present but also the future for the industry.
Casino Companies: The Standstill and Silver Linings
Casino companies were among the first businesses to close in the wake of COVID-19 Pandemic.
They are struggling to weather the financial storm and lessen the daily burn. Visitors are nowhere to be found and cash reserves limited. Waiting out the pandemic isn’t a feasible strategy for many.
For better or worse, things probably won’t ever go back to the way they were. Thus, it’s time to be bold and think outside the box. More than money is at stake.
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