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The gaming capital of America has been shuttered since March 18 because of the COVID-19 pandemic, the first closure since former President John F. Kennedy’s death in 1963.
The extended shutdown has battered companies within the S&P 500 Casino & Gaming subsector, which has seen its value plunge by 44 percent this year to $49.89 billion, according to Dow Jones Market Data. The index includes Las Vegas Sands, MGM Resorts and Wynn Resorts.
“The question is going to be airlift into Las Vegas,” Robert Goldstein, president and chief operating officer of the $34.9 billion Las Vegas Sands, said on the company’s first-quarter earnings call on Wednesday evening.
“I don't know how airlift would look in the next 90 days” or how the economic downturn will affect Americans' travel plans, he added. “But group business appears to be out there for August and into the fall.”
Earlier on the call, chief financial officer Patrick Dumont said the company believes “there'll be some opening” in May or June.
The longer casinos remain closed, the harder it will be on the Las Vegas economy. The American Gaming Association projects the closure through mid-May will “rob the U.S. economy of $43.5 billion in economic activity.”
Casinos are the lifeblood of the Nevada economy, which before Thursday’s initial unemployment claims report had already seen 304,000 job losses over the past four weeks. Clark County, home of Las Vegas, raked in $12.03 billion in casino revenue last year, according to the Nevada Gaming Control Board.
On Monday, Wynn Resorts CEO Matt Maddox called on Nevada Gov. Steve Sisolak to start reopening parts of the state’s economy early next month.
That same day, the Nevada Gaming Control Board said that before casinos reopen they must submit a plan adhering to strict guidelines at least seven days before unlocking their doors.
Bloomberg reported last week that casino executives have discussed outfitting dealers in masks and gloves and reopening nearby facilities where customers could be tested for COVID-19.
"The eventual recovery could take more time here than in Asia, but we're confident that Las Vegas' best days are ahead of it, that Las Vegas will remain the greatest leisure and business tourism destination in the United States," founder and CEO Sheldon Adelson said on the earnings call.
Las Vegas Sands reported a net first-quarter loss of $51 million as revenue plunged 51 percent from last year. The casino operator suspended its 79 cents-a-share dividend due to the impact of COVID-19.
|LVS||LAS VEGAS SANDS CORP||46.44||-2.56||-5.22%|
Shares of the company rallied, however, after J.P. Morgan analyst Joseph Greff raised his rating to “overweight” and said the stock may climb 25 percent from Wednesday’s closing price to $52 a share.
He pointed to shares having recently underperformed their peers, as well as the upcoming easing of lockdown restrictions in Macao, which has been dubbed the gaming capital of the world and where Las Vegas Sands has operations.
Las Vegas Sands shares fell 41 percent this year through Wednesday, worse than the S&P 500’s 13 percent decline.