As the gaming industry and the world headed into late May, it was still unclear how casinos would reopen safely, with health protections that would make customers comfortable enough to return to their favorite pastime.
Two months away can be a long time. With dire predictions of a resurgence of Covid-19 ringing in their ears, players may be more comfortable playing online, in social or real-money casinos, in poker rooms or at mobile sportsbooks (once sports get up and running). Maybe they won’t be able to return because they lost their jobs or businesses.
Even when casinos reopen, they will look different. Every other slot machine—if not two of every three—will be shut off. In most casinos, employees will be stationed nearby with sanitizers to wipe down machines and chairs after every use. But how can you decide if people are strangers, or members of the same family who may have been locked down together for the last 10 weeks?
And who will want to come back right away? Will it be your best players or just some of the marginal customers who have a severe case of cabin fever looking to escape for a day? Who should you target with your marketing? Will they respond or be offended?
By the end of May, many casinos had begun to reopen. Lots of tribal casinos got back to work, because as sovereign nations, they weren’t subject to the orders of state governors. But most of them opened with stipulations that honored the requirements of the Centers for Disease Control and Prevention (CDC).
At the Seminole Hard Rock casinos in Florida, which reopened May 21, all guests and employees were subject to temperature checks, and were required to wear CDC-approved masks. The capacity of the casinos was limited to 50 percent. Seminole Gaming management erected Plexiglas dividers separating slot machines and table game positions. According to Jim Allen, CEO of Seminole Gaming and chairman of Hard Rock International, safety was paramount in the decision to reopen.
“Hard Rock and Seminole Gaming have made a tremendous commitment to sanitary protocols and a safety-first mentality for both guests and team members,” Allen says. “We are making sure our resorts are safe and sound so our guests and team members have peace of mind when they return.”
Oklahoma’s Cherokee casinos reopened with a plan called “Responsible Hospitality,” which places an “unwavering commitment to team member and guest safety above all else.”
“How we move forward from this pandemic will be a part of our legacy,” says Chuck Garrett, CEO of Cherokee Nation Businesses. “We intend to emerge confident in the knowledge that we did all we could to implement industry-leading protocols that promote the health and safety of our team members and guests. While the guest experience will be different than before, we will continue to deliver the same first-class hospitality and entertainment our guests have come to know and love.”
The first commercial casinos to open were in South Dakota, in Deadwood, which were the last to close.
Caleb Arceneaux, chief executive officer at Liv Hospitality, owners of Tin Lizzie Gaming Resort, Cadillac Jack’s Gaming Resort and four Deadwood hotels, says, “We were about 15 percent or 20 percent higher than a typical weekend business, which is significant. Cabin fever’s real, and I think people wanted to get out and experience gaming again.”
Arkansas casinos opened May 18, but with only one-third capacity. Delaware North’s Southland casino quickly reached that capacity. Lines stretched around the building while players’ temperatures were checked.
Casinos in Mississippi were permitted to reopen May 21 with a capacity of 50 percent. Luann Pappas, president of the Scarlet Pearl Casino in D’Iberville, on Mississippi’s Gulf Coast, says lots of planning went into the reopening effort.
“They use the word ‘unprecedented,’ and I can underscore that,”
Pappas tells GGB. “You’ve furloughed every one of your employees, you have a skeleton crew to work with, yet you have to execute all the big things that have to be done to reopen.”
She even oversaw the development of social distancing panels for use on the casino floor, all designed and constructed in-house.
“We had a lot of vendors come forward who could build those Plexiglas panels, but they were six, eight or 12 weeks away from being able to do it in volume,” Pappas says. “So we did the research, bought the supplies at local stores, built a prototype and had it approved. We built our own. We built them for every table game and every slot machine.”
In California, where tribal casinos shut down before the statewide lockdown imposed by Governor Gavin Newsom, casino reopenings came long before Newsom was ready to lift his order, which now extends into July and beyond.
The first casino to close, San Manuel, wasn’t the first to reopen, as a new tribal chairman was involved in a task force set up by Newsom. Kenneth Ramirez, who replaced longtime chairwoman Lynn Valbuena in April, says it wasn’t time to lift the casino’s closure.
“In consultation with our medical experts, local and state health officials, and in consideration of Governor Newsom’s plans to reopen California, we determined that anything before then would not be in the best interest of our community,” Ramirez says. “Bottom line is, we have no intention to be the first casino to open. Instead, we’re focusing on making sure we open when it is safe to do so, and when we can provide the best experience for our guests.”
Other California tribes weren’t so reticent, although one was a bit more realistic about its reopening plans. Rincon Chairman Bo Mazzetti says when the county sheriff ordered the casino closed citing health issues, it wasn’t enforceable because his tribe is a sovereign government. But, he added, you can’t fight city hall.
“What he (would) do most likely is to shut down the ingress and egress from the roads. There he has jurisdiction. So you’re better off to comply.”
Nevertheless, the Rincon casino, Harrah’s Southern California, reopened May 22, with all the safety precautions in place.
Mazzetti says revenues won’t return to normal until all players feel safe.
“It’s that safety factor. ‘Do I feel safe? Do I feel comfortable? Am I confident of my health that I’m ready to go out?’”
Win River Casino in Northern California, operated by the Redding Rancheria, was the first to open in the state, followed quickly by San Diego County casinos Valley View, Viejas, Sycuan and three other tribal casinos.
The reopenings took place over the protest of San Diego Public Health Officer Dr. Wilma Wooten, who threatened to seek backup from the CDC. On May 14, Wooten declared, “We feel the health officer’s order does extend to the tribal nations in this particular situation, and we are working with the CDC to try to address this issue further.”
Casinos in Arizona were given the green light to reopen May 15, but with an abundance of caution. By all reports, lines were long waiting to get into Phoenix-area casinos, with players just happy to get back to their favorite pastime.
But what about the gaming capital, Nevada? Despite having relatively low Covid-19 infection rates and deaths, Governor Steve Sisolak insisted that casinos would not reopen until Phase 3 or Phase 4 of a multi-level recovery process. By late May, the state was still mired in Phase 1, with no real concept of what encompassed further phases. Most Las Vegas Strip casinos outlined reopening plans, but the start date continued to be pushed back by Sisolak’s reticence to set a date. His contention that he would leave the decision up to the Nevada Gaming Control Board continued to ring hollow.
Who Will Come?
The No. 1 question—If you open, will they come?—is still unresolved. Most casinos seem to be taking a wait-and-see approach, and opening in stages: first the casino floors and a few restaurants, then hotels in a limited capacity, followed by lounges reopening with social distancing requirements, and finally theaters and meeting spaces.
Josh Swissman is a founding partner of the Strategy Organization, and has previously worked in senior-level marketing positions for MGM and Station Casinos. Swissman says there are fundamentals that marketing departments should consider when reopening.
“There are three important concepts we’re going to need to weave into every casino’s brand positioning and messaging,” he says. “No. 1 is the idea of an escape or a getaway. The second is the notion of value. And the third is the reliability of health and safety and sanitation. I think those will be critical. Properties will really have to be thoughtful about integrating all three in a way that makes sense and is on-target for them. It will be challenging, but there are ways to do it.”
Health and safety is the priority, but Swissman says one size does not fit all when it comes to the comfort of returning to a casino.
“It’s going to be different for everyone,” he says. “Simply put, people will get over their fear of going out in public when they feel it’s safe to do it again. Some people will want to wait for a vaccine until they arrive at that conclusion. Some will wait for guidelines from local or state government before they return.
“If you take a look at what we in the hospitality and travel industry can control, it comes down to two factors: how safe will people feel when they step back into a casino, a hotel room, a restaurant and so on, and how safe they will feel traveling on an airplane, if they’re not within driving distance. Those are two big factors that we can ultimately control.”
Some casinos are inviting their special players back early. Others are controlling who returns simply by volume. Swissman says marketers should target everyone.
“Marketers ought to work with their analytics teams to cast as wide a net as possible,” he suggests. “That said, you can’t do it all at once. No matter what jurisdiction you’re talking about, you’re going to have reduced capacity. You have to be thoughtful about how you segment that big database and how you issue that message to the different populations. Properties are going to want to target their best guests first. It makes sense. And I’m not just talking about the biggest, highest rollers, I’m talking about the ones that are there frequently, that are engaged with and have a connection with the brand and the property.”
With most casinos requiring employees to wear masks, at least for the early stages of reopening, some wonder how can you convey that special customer service outlook without a smile. Swissman says he doesn’t think it will be a problem.
“I’m convinced that you can see someone’s smile through a mask,” he says. “I’ve seen it, I’ve experienced it. Guest service was always important, but it becomes supremely important right now—the ability to welcome guests in these uncertain times.
“When guests walk through those doors for the very first time and they’re met with a warm greeting and a smile through that mask and a helpful hand, six feet away, they will begin to feel more comfortable. They’ll begin to enjoy themselves more.”
Swissman believes fun is at the core of the casino experience, and to ignore that element to make people feel safe is wrong.
“It gets back to guest service and having your team members be laser-focused on delivering a great guest experience, especially in the beginning,” he says. “This will be the first time they’ve been back in a casino for many weeks or months. And it’s going to feel and look different. To the extent that our team members around the country are able to acknowledge that and work around that in their customer service delivery, it will go a long way to promoting an environment of fun. Even if we can’t be as close to each other as we used to be. Even if we have a half inch of Plexiglas between us. Those are just small barriers, which solid guest service can overcome.
“There are going to be a lot of fun things that are going to be available to people when doors open. With the getaway and the notion of escape, some people will find they’ll take great joy in just staying in a hotel room.”
Partners Helping Partners
Many vendors are helping operators by offering discounts on maintenance, service and system contracts during the Covid-19 shutdown
It’s no secret that during the shutdown of the casino industry due to the Covid-19 pandemic, no operator was buying slot machines, gaming tables or other equipment from suppliers. It’s also no secret that direct equipment purchases are only one cog in the gaming economy.
Much of the business casinos do with suppliers involves long-term contracts, with monthly fees for system maintenance and service, daily lease fees on gaming machines and other contractual services. As the shutdown continued, operators faced the challenge of meeting these obligations with zero revenue coming in the door.
Many vendors helped their customers meet those obligations, by discounting support and maintenance fees for the time casinos are closed due to the pandemic. One such supplier is Tulsa-based Casino Cash Trac, which provides financial software and systems for casinos in several states, including the largest casino in the world, WinStar World in Thackerville, Oklahoma. Casino Cash Trac’s Casino Insight casino audit system tracks revenue from the games to the hotels to the casino vaults to bank deposits.
According to Wanor Franca, chief revenue officer of Casino Cash Trac, the idea of discounting fees for customers arose after discussions with one of its biggest customers—the Chickasaw Nation, owner of WinStar and 22 other Oklahoma casinos—back in March, when casinos first shut down. The operator inquired about contract invoices if the shutdown were to last beyond April 1. (At the time, many actually expected to reopen in April.)
“I met with my management team, and said let’s be proactive,” Franca says. “We offered (to discount) 50 percent of their support and maintenance for the time of their closure. Right now, we’re offering it for April and May; if they continue to stay closed, we’ll continue to offer those discounts.”
Franca adds that the company is offering free reports to customers using the supplier’s cash analytics module, which will be important in quickly restocking cash for reopening. “A lot of casinos are having to go through an exercise to manage their liability accounts,” he explains, “and they have to now decide, when I reopen, how much should I have on ATMs, how much should I have on my floor, and how much did I deposit? We’re going to work together with them, and provide them with some reports for them to be better prepared when they reopen.”
He adds that when the shutdown began, most of the casinos chose to drop their entire floor—slots, tables, ATMs, cage—and transfer all the cash to their vaults. “Our software is the main software in the vault managing all their cash operations,” says Franca, “so through our software, they make their deposits. Some clients chose to keep money in the vault for cash on hand, but probably 70 percent chose to deposit in the bank.”
The banks have been very good about working with operators, not commingling that cash-on-hand money with other deposits, he says. “The banks are keeping some of the clients’ money aside, so if they need to reopen in a two-week period they’re able to get that money pretty quickly back into the casinos.”
Franca says many clients have indicated that most of the major slot manufacturers are working with them on daily lease fees, maintenance fees and other costs involving major, long-term contracts.
“Those are very large contracts for a lot of the casinos,” Franca says. “Some of our clients reached out to those vendors almost immediately to see if they could provide them with some kind of discount, because they know those are some of the larger bills they will have to pay over the next six months. We’ve contacted Aristocrat, Konami, IGT and Scientific Games on some of the clients we have in common, just to get them some guidance and let them know that maybe they should be proactive as well.”
Many of those major slot suppliers are in fact taking that proactive approach to helping their customers get through the shutdown.
“In the face of uncertainty surrounding Covid-19, Konami is committed to supporting its global customer base to the greatest degree possible while protecting employees and the public health,” says Steve Sutherland, president and CEO of Konami Gaming. “Our position is to remain open and available to deliver business services and technical support—keeping with the latest guidelines from the CDC. Our Games Customer Service & Support lines remain active during normal hours, and Synkros Systems Service & Support lines remain active all day, every day.”
“The gaming industry is making incredible sacrifices to support public health and safety in the communities we serve,” adds Tom Jingoli, Konami’s executive vice president and chief operating officer. “That’s how we operate—dedicated to creating thriving communities, through every season. As our casino customers continue that mission, Konami stands ready to support each step of the way.
“Our service and support channels remain 100 percent operational. And Konami teams spanning compliance, quality assurance, sales, marketing support and research and development are working diligently to deliver uninterrupted business response. Konami is focused on providing true partnership commitment, as we’ve done for over two decades.”
Those operators appreciate the support as they attempt to maintain liquidity through the industrywide shutdown. Dawn McGrady, chief financial officer of Michigan’s Little River Casino Resort (LRCR), says the casino reached out to vendors immediately at the beginning of the Covid-19 shutdown in March.
“Our team at LRCR did a great job contacting our vendors to see if they were open to assisting us,” McGrady says. “We contacted them and requested a suspension of payments for daily fee games, requested postponement of payments on purchases and other monthly lease requirements, and have received positive responses.
“We took a look at all our monthly maintenance agreements, and the vendors we contacted agreed to provide us maintenance relief during this time. Some agreements ranged from a percentage reduction of monthly costs to no payments during this time, in exchange for extending their current agreement by the number of delayed payments.”
McGrady says many of the casino’s vendors have remained in constant contact, offering assistance as the operator moves closer to reopening. Additionally, many are retooling parts of their operations to manufacture products that will aid a safe return to business.
“During this time, vendors seem to have changed up their product offering, such as reaching out to us letting us know they now offer protective devices between gaming equipment,” McGrady says. “Vendors that normally would have provided us equipment are now offering temperature kiosks, which are all things needed to help us reopen safely. Our vendors have taken a very proactive approach in ensuring that we are successful in getting through the closures, and ensuring we’re ready to reopen, as we all depend on one another in this business.
“It is extremely valuable to have a good partner that is willing to work with you. Our vendors have been very receptive and understanding, and by making some accommodations, it strengthens our partnerships.” —Frank Legato