Unprecedented Challenges

G2E panel offers varied supplier, operator perspectives on how the gaming industry has survived the pandemic crisis. Panelists included (l. to r.) Ellen Whittemore, executive vice president of Wynn Resorts; Rodney Butler, chairman of the Mashantucket Pequot Tribe, and Mike Rumbolz, CEO of Everi Holdings.

Unprecedented Challenges

As revenue numbers continue to rise and gaming operators struggle to reboot their businesses as the Covid-19 crisis stubbornly continues, one panel at the recent Global Gaming Expo Virtual Experience examined how the industry has responded from several professional vantage points.

For a panel discussion titled “Gaming During the Pandemic: Views from Across the Industry,” Bo Bernhard, executive director of the International Gaming Institute at the University of Nevada, Las Vegas, gathered a distinguished panel to examine the issue from operator and supplier perspectives.

On the operator side, the commercial industry was represented by Ellen Whittemore, executive vice president of Wynn Resorts; and the tribal gaming industry by Rodney Butler, chairman of the Mashantucket Pequot Tribe, owner of Connecticut’s Foxwood Resort and Casino. The supplier side was represented by Mike Rumbolz, CEO of Everi Holdings.

Each panelist brought a unique perspective to how the industry has survived two and a half months of shutdown followed by restricted-capacity operations. For example, Whittemore said Wynn Resorts, thanks to its Macau operations, had the advantage of a global perspective as the pandemic spread, learning from operations in the nation where Covid-19 first appeared.

We learned a lot from our Macau experience,” Whittemore said. “I think we took that impending pandemic a little bit more seriously than some people who didn’t have the same experience that we had. We knew from the Macau experience, and the People’s Republic of China experience, that this virus was highly contagious, and we knew that the possibility of stopping the spread was going to be slight.”

Whittemore said any illusions of the crisis disappearing quickly vanished because of Wynn Macau. “From February on, as the Macau government responded and ordered the closure of our casinos for two weeks, and as they continued to respond to what they perceived as the threat of this virus, we took that experience and immediately began the process of determining what we needed to do here in the United States,” she said, noting how Wynn hired epidemiologists and public health experts to assess data on a daily basis.

Butler said his team at Foxwoods—coming off a great start to the year from a revenue standpoint—also looked to Asia and realized the gravity of the situation. “It was like a slow-moving train wreck,” he said. “We looked at what was happening in Macau as Ellen said, and similar to most of us in America, we didn’t quite believe at that point that it was going to impact us—like with previous outbreaks, that somehow, some way we were going to manage through it.

“But being at the epicenter of it here in the U.S. on the East Coast, when you look a what was happening in New York, and Boston and Rhode Island, there were these small pop-ups, these flare-ups that were happening, and we started to move at that point. We started to shift our operations, and minimize foot traffic coming on property. We cut off bussing from the major cities of New York and Boston to Foxwoods. And then, about a week and a half before full closure, we started spacing out our slot machines and our tables in advance.”

For Rumbolz, a former regulator and head of a company with international operations, Europe provided the first notion of the severity of the situation. “We watched what was going on in Europe with great concern, and by March 1, we knew there were going to be closures throughout the United States,” he recalled. “By March 30, 90 percent of the United States was closed. So, it came on so rapidly that we were doing a lot of reacting and not as much planning as I would have preferred to do….

“And that was for us a very frightening period—because we were not sure how long we were going to be closed, or how long the industry would be shut down, so we were operating in something of a vacuum. We spent a lot of time looking at our cash needs, how long we would hold during the pandemic closure with the cash on hand—making sure the company was in a position to reopen, that we had the cash, the products, the people to get it reopened and to help the casinos open up their casino floors again.”

Rumbolz added that the focus on survival in the early days of the pandemic reminded both suppliers and operators of the value of their employees, as difficult decisions on cost-cutting led to massive furloughs.

Our workforce is very diverse, spread out between parts of the U.S. and Canada,” Rumbolz said. “So it was a very trying time as we had to determine, first, who was essential to keep on board. We had between 1,200 and 1,500 employees; we furloughed 90 percent of those employees. The 10 percent that remained we asked to work on reduced salaries. We made sure we had health insurance benefits for those furloughed as well as those still working…

“Dealing with the issue of putting someone on a furlough you had worked with, day in and day out, is always heartbreaking. It’s torture knowing you have had an impact not only on that employee but their family and perhaps their extended family. We put together a fund for any emergency issues that may come up for an employee. Our employees were very careful in what they took out of that fund, considering that other families may need those funds.”

“We recognized early on that this company would not be what it is without our employees,” said Whittemore. “We asked them to stay home, we asked them to be safe. We were early proponents of closing. We asked our employees to stay home in all of our jurisdictions, and we were able to pay them during the closure—which was something I was very gratified we were able to do.”

Whittemore added that Wynn urged its furloughed employees to continue community outreach programs during the shutdown. “Nothing makes a person feel better than helping somebody else, so the message we sent to our employees was while you are staying home, and you’re being safe, find a way to help other people. We have a fabulous community relations team, and they came up with hundreds of ways to continue to volunteer and make a difference in people’s lives.”

Butler commented that helping employees get through the crisis was particularly important for Foxwoods, where the tribal community depends on gaming. “We are essentially family businesses,” he said of tribal casinos. “Many employees have been with us 15 or 20 years, so we had to make very difficult decisions about who we would furlough. We went from 6,000 employees to 150 during the time of he furlough. We lobbied (for gaming inclusion) on the CARES Act. We made sure our employees were going to be taken care of—that our family was taken care of.”

Best Practices

Whittemore commented that one of the positive lessons to come from dealing with the pandemic was how the industry shed competitive instincts temporarily and came together to help each other develop best practices to deal with the situation.

“From the very beginning, the communications between the chief executive officers, the general councils, the safety officers, tourism officials, the Nevada Resort Association, the American Gaming Association on the national level, asked, how do we approach this? What are the best practices?” Whittemore said.

“We were very early in publicizing what we thought were going to be the best practices. People have used it as a template. We put it up the minute it was done; we’ve shared it with everybody. We were in a position where we realized people were not coming to Las Vegas just to come to the Wynn. They were coming to Las Vegas for Las Vegas. Whether they are staying at the Wynn or with one of our competitors, they have to be able to have that Las Vegas experience.”

“From our perspective, we started the planning process as soon as we closed,” said Butler. “Once we realized that this was going to be longer than we anticipated and saw the cash burn we were all going through, we realized very quickly we had to do some scenario planning.

“The collaboration was amazing, across the country and across the world… Speaking with folks at MGM and Las Vegas Sands, and Genting around the world, and many of the tribal operators and the AGA—Bill Miller’s probably getting tired of my phone calls—we saw this beautiful collaboration—here’s what we’re doing. I was on the Reopening Connecticut team, and I had access to the state scientists and the consultants they are working with, on the varied other industries outside of gaming. So we were able to cherry-pick some of the best practices even outside of gaming, and compare that to what we were doing and how we were thinking.”

For Everi, best practices took on a more practical perspective as the company worked on helping casinos implement cashless, contactless solutions to help casinos reopen safely.

“We had been working on cashless and contactless solutions for probably eight years,” he said, “and bringing them to the industry as most would agree everyone wanted us to bring them—slowly, a piece at a time…

“Once we saw what was going on around the world, with people’s fear of touching things, whether it be chips or cash, we (realized) we need to accelerate this thing…. We originally thought this was a great idea for casinos because of the savings the casinos would achieve, not having to move cash all around the floor and in and out of machines, and back and forth to count rooms, but what appears to be the best benefit of these products is the safety the public gets from it.

“And all of the other manufacturers are in the same space now. They’re all trying to find ways to get cashless onto the casino floor, and certainly onto the slot floor. In addition to that, self-service machines for the patrons have become much more important—self-service enrollment, for example, when you get into the loyalty programs. Self service as to how you want to interact, with cash or a ticket, to play the games.”

Looking Forward

All the panelists agreed that the industry is beginning to come out of the crisis. “One of the things the experts are telling us is that people are not afraid of places as much,” commented Whittemore. “People are very convinced that all of our properties are taking all of the sanitation steps we should be taking—that our restaurants are clean, that we are misting, that we are cleaning everything.”

Whittemore noted that Wynn CEO Matt Maddox is working with UNLV’s University Medical Center on more ways to make patrons safe in the operator’s properties. “People are afraid of people, and rightly so,” she said. “When you go into a crowd of people you don’t know, you become a little bit afraid. When people talk about coming to Las Vegas, they want to be safe not in terms of physical security, but from each other.”

Wynn Resorts is working with the university to create an on-site lab at Wynn Las Vegas to effect rapid Covid-19 testing. “We are already in the process of constructing it,” she said. “And what we are going to be able to do with our customers, either our hotel guests or dinner guests or guests in one of our theaters, is the ability for them to come early in the day and give a saliva sample or a swab, and we’re going to have rapid testing, so by the time of the concert later that evening, you’re going to know that you are negative, and you’re only going to be allowed to go into that concert if you are negative. You’ll get a result on your phone, and you a little green light will go on.

“And it’s going to give you that comfort level to say, wow, I’m going to go out on the town, and when I go out on the town tonight, I know I’m going to be around people who are safe for me to be around.”

Whittemore said the testing lab will be a short-term solution to the Covid-19 crisis, but all three panelists gave an optimistic assessment of the longer-term future.

“I think you’re going to see more and more innovation to help operators,” said Rumbolz, “but you’re also going to see games coming out over the next few years that are far more entertaining than the games that were coming out previously, because we all know on the supply side that people need to be entertained. They need to get their minds off the troubles that have occurred during this pandemic.”

“We are excited about the future when we get on the other side of this,” Whittemore said. “We are looking forward to welcoming people back into our communities to enjoy all of our facilities. After a period like this when people have been home, working remotely, home-schooling their children, they’re going to be ready to have a vacation. And Las Vegas and Boston and Connecticut—all of those places that are going to give people a little bit of entertainment—are going to open their arms and welcome everybody back in, and we’re looking forward to it.”

“We’re already seeing some green chutes,” said Butler. “We’ve had significant demand on our hotel side. We’re starting to see some pickup in the booking of convention sales, and we’re actually booking our first entertainment shows in the next few weeks. And the demand has been surprising, even at a limited capacity.

“People are realizing how we’re going to manage with this. We’re optimistic about the vaccine coming online within the next few short months hopefully, and they’re willing to get out because they are confident in what the industry has done from a safety perspective. The hope is that we’re seeing it now and the guests are appreciating it.”

Articles by Author: Frank Legato

Frank Legato is editor of Global Gaming Business magazine. He has been writing on gaming topics since 1984, when he launched and served as editor of Casino Gaming magazine. Legato, a nationally recognized expert on slot machines, has served as editor and reporter for a variety of gaming publications, including Public Gaming, IGWB, Casino Journal, Casino Player, Strictly Slots and Atlantic City Insider. He has an B.A. in journalism and an M.A. in communications from Duquesne University in Pittsburgh, PA. He is the author of the humor book How To Win Millions Playing Slot Machines... Or Lose Trying, and a coffee table book on Atlantic City, Atlantic City: In Living Color.