Permanent closure might be imminent for four Station Casino resorts in Southern Nevada, according to Frank Fertitta III, Chief Executive Officer of parent company Red Rock Resorts Inc. (NASDAQ: RRR).
According to the Reno Gazette-Journal, in a Tuesday earning’s call, the CEO revealed the Las Vegas-based company’s uncertainty regarding whether Fiesta Henderson, Fiesta Rancho, Palms, and Texas Station will reopen for business in the wake of COVID-19.
A major gaming industry brand in Nevada, Station Casinos temporarily closed all 20 of its Las Vegas properties beginning with gaming operations on March 18 while hotels were shut down the following day. The closures a result of Democratic Gov. Steve Sisolak’s 30-day statewide shutdown order of non-essential businesses, including casinos, in an effort to curb the spread of COVID-19.
Fertitta reportedly said…
“We don’t know if – or when – we’re going to reopen any of the closed properties. We think it’s too early to make that decision at this time.”
Uncertain future:
Chief Financial Officer for Red Rock, Stephen Cootey said before deciding whether or not to reopen the four properties, there would first have to be data showing a healthy demand at resorts that have already reopened.
Fertitta said “so far” they’re pleased with the results that they’ve had and the “ability to move some of the play from the closed properties to our existing properties, and we’re going to continue to try to get clarity and navigate the situation to make well-informed decisions.” But, he said, “whatever decisions we make will be in the best interest of shareholder value,” according to the Reno newspaper.
News 3 Las Vegas, meanwhile, reports that Fertitta noted that because Station Casino properties are primarily reliant on Vegas locals and gaming, the company should be able to withstand conventions and catering losses.
In addition to all of its Wildfire division properties, on June 4, 2020, the Las Vegas-based company officially reopened Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station, and Sunset Station properties, as well as Palms Place, the 47-story condo-hotel connected to the Palms Casino Resort.
Graton Casino Resort, which is managed by the Red Rock Resorts, closed on March 17 and was partially reopened on June 18, 2020.
Prior to that, the company announced that it would assess the performance of those first-to-open properties before reopening Fiesta Rancho, Fiesta Henderson, Texas Station, and Palms.
Meanwhile, on August 3, Station reopened poker rooms at its Sante Fe, Boulder Station, and Red Rock properties, while Green Valley Ranch and Palace Station are currently operating without poker. The operator has a total of five poker rooms.
Plummeting revenues:
According to Red Rock Resorts’ Second Quarter 2020 Results, due to the closures of all of the company’s properties, net revenues for Q2 2020 were $108.5 million, a decrease of 77.5 percent from the $482.9 million for the same period the year prior.
Net loss meanwhile was $118.4 million for Q2 2020, a drop of $111.4 million, from a $7.1 million net loss for the same period of 2019. Just at Red Rock’s Las Vegas properties alone, second quarter 2020 revenues dropped $356.7 million from the $457.8 million for the same period the year prior.
“We’re in a world of hurt here in terms of Las Vegas.”
Competing Las Vegas operators report similar earnings’ tanks, with COVID-19 contributing to a $1 billion Q2 operating loss for MGM Resorts properties. Loss of its convention business on The Strip, Las Vegas Sands Corp. led by billionaire casino mogul Sheldon Adelson, contributed to reported losses of $985 million for Q2 2020, down 97.1 percent from 2019.
Sands gesture:
The 87-year-old Adelson recently said that he would continue to cover full pay and benefits of the approximately 8,000 US Las Vegas Sands Corp workers through at least the end of October 2020. The coverage to apply to those employees who are not currently working as well.
In an earnings call, Las Vegas Sands President and Chief Operating Officer Rob Goldstein said…
“We’re in a world of hurt here in terms of Las Vegas.” He added, “I’ve never felt more gloomy than I do today about what’s happening in Las Vegas,” according to the Reno Gazette-Journal.
Fallout:
Initially slated to reopen in Phase 3 or 4, Nevada casinos opened on June 4 as part of Phase 2, without mandatory facemasks for guests, nor any visitor restrictions. By June 24, Nevada had the highest coronavirus transmission rate in the country, according to a source.
On August 3, there were 51,237 COVID-19 cases in Nevada, a one-day increase of 980, and 847 deaths, 14 of which were reported Monday, according to The Nevada Independent. That same day, Governor Sisolak and the Nevada Health Response team unveiled a new long-term mitigation strategy (pdf) for the western US state “to help provide predictability and stability moving forward.”
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