International edition
September 18, 2020

Some companies could have just five months of liquidity to stay afloat

Las Vegas casino operators burning up to $14.4 M a day during shutdown, report finds

Las Vegas casino operators burning up to $14.4 M a day during shutdown, report finds
On March 17, Nevada Gov. Steve Sisolak ordered a 30-day closure for all non-essential businesses, which includes all Strip casinos.
United States | 03/27/2020

MGM Resorts would have nine months to wait out the coronavirus pandemic before it runs out of cash, according to Macquarie research. Wynn Resorts and Las Vegas Sands have 15-20 months, while Penn National is spending $6.4 million daily with 5.2 months before it exceeds cash burn.

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as Vegas casino owners may have just five months to stay afloat as they burn through up to $14.4 million each a day following state orders to close down operations for a month amid the coronavirus pandemic. 

On March 17, Nevada Gov. Steve Sisolak ordered a 30-day closure for all non-essential businesses, which includes all Strip casinos. As the pandemic expands and the number of cases accelerates, there's no telling whether the lockdown will be extended in the coming days and weeks. 

After crunching “cash burn” data, some analysts contend MGM Resorts International and Caesars Entertainment have money to last 8 to 16 months, according to Barron's, as reported by USA Today. That translates to 239 days of liquidity for Caesars and 563 days for MGM Resorts.

Wynn Resorts and Las Vegas Sands have 15-20 months of cash available to wait out the pandemic, according to Macquarie research analyst Chad Beynon. 

Macquarie released a report this week detailing how much cash these casino companies burn every day while no vacationers visit properties – and how long they can stay closed without running out of money. “It ranges from five months to a year and a half,” Beynon said, “because of obligations they have to the banks, to their employees and to projects.”

Macquarie's analysis key findings are as follows: 

  • Monarch Casino and Resort (Reno): 14.3 months, burning $300,000 a day.
  • Red Rock Resorts: 13.8 months, burning $1.7 million a day.
  • Golden Entertainment: 10.4 months, burning $1 million a day.
  • Boyd Gaming: 9.4 months, burning $3.2 million a day.
  • MGM Resorts International: 9 months, burning $14.4 million a day.
  • Penn National: 5.2 months, burning $6.4 million a day.

"The daily burn will remain the same," Beynon said. "The only thing that could change by the day is if you're laying off employees – but you can only cut so much. I don't think the daily burn changes. Only the amount of time they have left changes." 

Each month the Nevada tourism industry is shut down, there are $4.7 billion in estimated economic losses, according to the American Gaming Association (AGA).

The fallout could be even more devastating on a national level. “In total, these mass closures will rob the U.S. economy of $43.5 billion in economic activity if American casinos remain closed for the next eight weeks,” AGA President Bill Miller said.

Casinos are in line to ask Congress for emergency funds to bail the industry out of financial trouble as the pandemic batters tourism markets across the US. The industry seeks possibilities that could include direct cash payments, deferred taxes or special bankruptcy protections, according to The Washington Post. The Senate passed Wednesday a $2 trillion relief package that is expected to help the gaming industry.

“Gaming employees, their families and communities are bearing the brunt of this economic standstill and will continue to suffer if Congress and the administration don’t take immediate action,” Miller said.

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