Interview Synopsis

Las Vegas Casino Operators – Coronavirus Impact Update

  • Multi Asset
  • Consumer
  • North America

With its economy centred around entertainment and leisure, Las Vegas is particularly vulnerable to COVID-19. To find out the impact on the city’s casino operators, Third Bridge Forum interviewed a former senior executive from Caesars Entertainment Corp.

What are the odds for Las Vegas casino operators struggling in the wake of COVID-19?

The specialist agreed with the sentiment that Las Vegas could be one of the last parts of the consumer industry to recover, adding that the city is not just home to gambling. Conventions, restaurants and entertainment are all part of its attraction, and all rely on close social proximity. What’s more, the vast majority of consumers reach the city via air.

What attributes winners and losers in this environment will have was also covered. “Having a strong balance sheet is probably the most important characteristic for people on the rebound, and being able to survive the debt structures.”

Potential capacity rates at casinos when an eventual recovery takes place were also discussed. While some people think there will be pent-up demand, the specialist disagrees: “I would say it’s going to be 80% or 85% or 90% because I think there are going to be people that are still reticent to.. travel the way they were until there’s an absolute vaccine.”

Consolidation and purchasing assets were also on the agenda – including the potential Caesars-Eldorado merger. Although this deal has still been committed to by both parties, coronavirus would have weakened their balance sheets, and this could prove a problem for the regulators. 

Although a number of casinos have been for “quasi-sale” for some time, there is a small pool of potential buyers owing to the fact that this is a heavily regulated industry with high barriers to entry. However, if the shutdown continues for longer than expected, there could be restructuring or bankruptcies that lead to consolidation or buying of assets.

Other topics covered include what will happen to CAPEX, whether Vici will defer rent for Caesars and how tribal casinos are positioned.

To access all the human insights from Third Bridge Forum’s Las Vegas Casino Operators – Coronavirus Impact Update Interview, click here to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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