This time last year, March Madness became one of the first casualties of the Covid-19 pandemic. The shutdown of NCAA basketball was followed by the closure of businesses, sports, entertainment, casinos and more to counter the virus.
The tournament has returned, as have retail casinos and sportsbooks, but Covid-19 is never far from the conversation. This year’s March Madness games are being played in Indianapolis, in the bubble format that proved effective for the NBA last year. Fans can attend, but only up to 25 percent of capacity.
Similar limitations still hold sway in most casino hotel landscapes, although the percentages are increasing. Those increases are helping gaming halls in Atlantic City, Pennsylvania, Colorado and elsewhere, where amenities took a back seat for much of the past 12 months.
Online a Lifeline—to a Point
The saving grace, which possibly prevented a total collapse of gaming during the past year, was the rise in online wagering, including sports betting and iGaming. In Atlantic City, though revenues from in-person gaming dropped 48 percent in the 12 months that ended in February, at the same time revenues from remote gaming increased almost 92 percent.
Prior to its almost four-month shutdown last year, Atlantic City was on a roll, Steve Callender, president of the Casino Association of New Jersey, told GGB News. “We were on a 21-month winning streak of revenue growth, our sportsbooks topped Nevada’s and our diverse offerings were attracting new visitors.” Covid took care of that.
Significant increases in online gaming and sports betting, “while positive, do not drive tourism,” Callender said. “They don’t drive purchases by casinos from New Jersey vendors or sales by regional retail and restaurants. Most importantly, they don’t support employment or revenue at brick-and-mortar locations.”
The viral outbreak devastated AC’s meeting and convention business. For the 12-month period that ended in February, Meet AC reported a total of just 32 meetings and trade shows—89.2 percent fewer than the previous year. Nearly 600,000 fewer people attended meetings and conventions from March 2020 through February 2021. This resulted in almost $260 million less spending, a 90 percent year-over-year decline.
Rocky Mountain Higher
In Colorado, there’s reason for optimism when it comes to the state’s three casino hubs: Cripple Creek, Black Hawk and Central City, all former mining towns in the Rockies.
According to the Colorado Division of Gaming, which released the figures for January, statewide the industry rose $8.76 million, or 16.2 percent from December 2020. In Cripple Creek, adjusted gross proceeds (AGP)—the amount wagered minus payouts—increased 11.6 percent over December 2020.
In Black Hawk, AGP increased 16.4 percent. And in Central City, the figure rose 24.2 percent comparing January 2021 to December 2020. By contrast, in Black Hawk, AGP comparing January 2021 with January 2020 tumbled 10.8 percent and declined 4.9 percent in Central City.
“Although not as good as January 2020, which was pre-Covid, this is a good indication into how the industry will fare for 2021, as restrictions continue to be lessened,” said Jeff Mosher, marketing and events director for Cripple Creek Colorado. In February, after a months-long shutdown, table games opened up in Colorado, with most tables capped at three guests, and guests required to wash their hands before taking a seat.
But rebounds don’t necessarily mean full recovery, according to Doug Harbach, communications director of the Pennsylvania Gaming Control Board (PGCB). Nor can he say with any certainty that 100 percent capacity indicates normalcy compared to pre-Covid days. “Patrons will need to feel comfortable in a casino setting,” Harbach said, “and I don’t think anyone can clearly say when that would occur.”
For Kevin O’Toole, PGCB executive director, the worst part of the pandemic was its impact on casino employees, especially the mitigation steps that made it difficult to bring people back.
Total gaming revenue in Pennsylvania during the past 12 months went from $3.5 billion to $2.7 billion, a decline of $830 million. O’Toole has confidence that land-based casinos and online gaming will work together once the vestiges of the pandemic end.
Back in New Jersey, last week Governor Phil Murphy increased capacity for indoor dining from 35 percent to 50 percent. The 10 p.m. closing time for bars and restaurants also got the axe. A survey conducted by the Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism (LIGHT) at Stockton University showed that more than 70 percent of respondents plan to visit Atlantic City within the next six months.
The survey, released March 16, found that of those who had yet to visit Atlantic City since casinos reopened in July, most stayed away because of the pandemic.
“This report tells a story of fewer public gatherings, a shift to virtual/remote activities, and the loss of thousands of jobs and hundreds of millions of dollars in the service sector,” said LIGHT coordinator Jane Bokunewicz. “But after the most challenging year in the history of casino gaming in Atlantic City, there are signs that a recovery is in sight.”
For Joe Lupo, president of Hard Rock Hotel & Casino Atlantic City, the recovery is not as clear-cut as he’d like. “With limited occupancy for entertainment and conventions—two elements of the Atlantic City market that drive a lot of volume—it’ll take some time.”
Still, Lupo expects a busy summer, even if the return of conventions and such might have to wait until 2022. “In this market, it’ll take 100 percent to come close to normal,” he said.
One of the key takeaways from a year with Covid was the importance of listening to customers, Lupo added. “It is and always will be the priority. Their advice and comments have allowed us to remain flexible and provide the safe environment they expect.”
Another takeaway: outdoor dining in the summer is a cherished amenity. “Our second level decks overlooking the Atlantic Ocean provide a great experience that we look forward to enhancing this summer,” Lupo said.
Time to Reopen Was ‘Yesterday’
Once Atlantic City is fully open, the market will recover quickly, said Michael Busler, professor of finance at Stockton University. “Most small businesspeople I spoke with tell me their revenue is 30 percent to 50 percent below the prior year. We needed to get to 100 percent capacity yesterday. I believe there’s a huge pent-up demand from people who’ve been locked down at least partially for more than one year.”
Busler believes New Jersey didn’t have to go through the kind of shutdown mandated by the governor. In states like Florida or Texas, more businesses remained open than in New Jersey, and mask mandates weren’t as long, yet their Covid numbers per capita were similar to California, a state that had near-total shutdowns, he said.
It’s been postulated that states such as California and New York, points of entry for people entering or returning to the continental U.S., initially had higher Covid infection rates, while states without the same level of precautions spiked later in the year.
Either way, according to Callender, “By this time next year, the pandemic will be behind us, and our city will be well on its way to a strong recovery from this unprecedented health and economic crisis.”
