- Nevada’s gaming industry has been shut down for over two months due to the COVID-19 pandemic.
- Nevada’s governor Steve Sisolak has set a target date of June 4, 2020 for reopening the state’s casinos.
- The Nevada Gaming Control Board will meet on Tuesday, May 26 to discuss health and safety measures at the state’s gaming properties.
The world economy has been hit hard by the COVID-19 pandemic but the state of Nevada has taken it on the chin. The unemployment rate was the highest in Nevada history in April and the worst of any US state. April’s unemployment rate was 28.2%–higher than the estimated 25% national unemployment rate in 1933 during the Great Depression. Nevada lost 244,800 jobs in April for the largest monthly decline since records began being kept in 1990. According to Nevada Department of Employment, Training and Rehabilitation chief economist David Schmidt it’s the highest ever seen in a US state since consistent unemployment data first became available in 1976.
As bad as these numbers are they weren’t surprising. Although Nevada’s economy has diversified to some extent over the past couple of decades it’s still driven by the gaming industry along with tourism including conventions. With the gaming industry–including the major Strip hotel casinos–shut down since mid-March the shock waves have reverberated throughout the Nevada economy. Making matters worse is the public’s reticence to travel and the current difficulty in international travel.
There’s finally some good news on the horizon for the state economy. According to a press release from the governor’s office issued on Friday a target date of June 4, 2020 has been set for reopening the Nevada gaming industry:
Pending the evaluation of trends in Nevada’s COVID-19 data, along with the results of the Gaming Control Board meeting on Tuesday, the Governor has set a target date of June 4, 2020, for reopening Nevada’s gaming industry.
The press release outlined the importance of re-opening the gaming industry in such a way to protect the public health and welfare of citizens and visitors:
Without a thoughtful and measured reopening of Nevada’s gaming industry, all of the work that Nevadans have done to fight the spread of this viral pandemic will have been for naught. The Gaming Control Board remains resolute in ensuring that gaming operations in this State do not compromise the health and safety of Nevadans. In consultation with the Office of the Governor, as well as federal, state, and local health officials, the Board’s Policies aim to diminish personal contact and increase the level of disinfection in high-use areas, and the Board expects full compliance with these Policies by each licensee. The Board is firmly aware of its statutory duty to protect the public health and welfare of the Silver State’s citizenry, while allowing the gaming industry to flourish through strict regulation.
GAMING INDUSTRY CLOSURE PRODUCES BRUTAL ECONOMIC NUMBERS
How bad is the current economic nadir compared to other significant downturns? Jeremy Aguero of Applied Analysis noted that:
“We have gone from what was essentially the peak of our economy to the trough of our economy within 45 days of each other.”
During the ‘Great Recession’ following the financial market meltdown in the first decade of the 2000’s the Las Vegas room occupancy rate hit a low of 70%. Obviously, when the gaming industry shut down it went to zero overnight. In February, Nevada’s unemployment rate was 3.6%–an all time low. Although there are hopes that the state, national and world economy will bounce back quickly the velocity with which Nevada’s economy crashed to a halt is mind boggling.
Aguero gave a sobering warning that high unemployment rates could be around for awhile. Some jobs may never return due to seismic changes in industries and new post pandemic business practices:
“I think we have to be realistic in understanding that the unemployment rate in Nevada will be this high for some time.”
A REOPENED GAMING INDUSTRY WOULD BE A TANGIBLE SIGN OF HOPE
At the very least, the reopening of Nevada’s gaming industry will have some symbolic benefit. Governor Sisolak has planned a Tuesday news conference to give details and possibly announce a firm date for the next phase of reopening Nevada’s economy. Provided the data from the holiday weekend continues to “reflect positive or consistent trends” for such metrics as infection rates and hospital usage.
Assuming that Sisolak gives a green light for casinos to reopen the next move would be up to the Nevada Gaming Control Board. They’re having a ‘workshop’ on Tuesday focusing on COVID-19 response measures at the state’s gaming properties and hotels. According to the Governor’s statement the NGC could take up ‘any action necessary with regard to opening plans’. Gaming properties must submit reopening plans to the board 7 days prior to reopening.