Nevada: Harrah's Reno and Peppermill to lay off employees in August

After Nevada’s recent reopening of casinos, two Reno gaming companies announced layoffs.

Caesars Entertainment notified the state, city of Reno and Washoe County that it will permanently lay off 471 employees at its Harrah’s Reno property, which remains closed after the state-mandated shutdown of nonessential businesses in March. Caesars is in the midst of closing its sale of Harrah’s Reno to Las Vegas-based developer CAI Investments.

“Harrah’s Reno will be permanently closed and all employees will be terminated,” said Brad Belhouse, regional president for Caesars, in a notice about the layoffs, as reported by Reno Gazette-Journal.

Harrah’s Reno layoffs will be effective after August 1 but no specific date was given. CAI Investments plans to turn Harrah’s Reno into a new mixed-use development known as Reno City Center once it finalizes its acquisition of the property. 

Caesars cited the ongoing merger with Eldorado Resorts for its decision to not reopen Harrah’s Reno. Eldorado first announced its plans to acquire Caesars Entertainment for $17.3 billion last year. Eldorado initially eyed the first half of 2020 as the target date for closing the deal before the COVID-19 pandemic roiled the gaming industry and the global economy. Caesars says both companies are now expecting to close the deal in August but the date could still change.

Another Reno hotel-casino, the Peppermill Resort Hotel, also will be laying off workers. The Peppermill layoffs total 103 employees and will be effective on Aug. 1. “When we originally provided notice of furloughs effective March 17, 2020, we did not foresee the furloughs could last beyond six months or become permanent,” said Billy Paganetti, Peppermill general manager. “Frankly, no one could have foreseen how the COVID-19 crisis played out.”

The hotel-casino closures led to an unprecedented drop in room tax revenue, according to the Reno-Sparks Convention and Visitors Authority. During April — the first full month following the mandatory shutdown of nonessential businesses in Nevada — taxable room revenue in Reno-Sparks was $3.5 million. The number is down 89% from the $32.2 million collected during the same month last year.

The Peppermill was one of several Reno-Sparks hotel-casinos that opened its doors once again this month as part of the state’s phase two reopening. The hotel-casino implemented several safety precautions for its reopening, including daily temperature checks for employees and the installation of thermal cameras.

With travel still down and events such as Hot August Nights being canceled, however, the hotel-casino business is expected to still be far below what it was last year. “The required response to the COVID-19 crisis has evolved, and resulted in uncertainty facing our industry,” Paganetti said. “Because of this uncertainty, we have made the difficult decision to permanently layoff employees.”