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Execs: US casinos learned some useful lessons from pandemic

鈥楽ince we reopened, business has been terrific鈥
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A man plays a slot machine at the Hard Rock Casino in Atlantic City N.J. on Aug. 8, 2022. On Sept. 16, 2022, New Jersey gambling regulators reported that the state鈥檚 casinos, horse tracks that offer sports betting and the online partners of both types of gambling outlets won $470.6 million from gamblers in August, up nearly 10% from a year earlier. (AP Photo/Wayne Parry)

The COVID pandemic forced most U.S. casinos to close for months, causing payrolls, revenue and earnings to tumble.

But the forced shutdowns and highly regulated recoveries also taught the industry useful lessons that will endure even after the pandemic is a distant memory, panelists at a major casino conference said Thursday.

Speaking at the East Coast Gaming Congress, executives from major gambling companies said the changes they were forced to make because of the pandemic had some benefits.

鈥淲e learned lessons that can鈥檛 be unlearned,鈥 said Thomas Reeg, CEO of Caesars Entertainment.

鈥淚t forced us and gave us the ability to say to our guests that things that used to be viewed as an entitlement, maybe they don鈥檛 need them as much as they thought they did,鈥 added Jim Allen, chairman of Hard Rock International. 鈥淒o you need a buffet? Should you have a buffet?鈥

The conference was held in the Hard Rock casino in Atlantic City, whose buffet is still operating. Some of Hard Rock鈥檚 casinos in other states, including Florida, offer buffets while others do not.

David Cordish, chairman of the Cordish Companies, which operates casinos in Pennsylvania, Florida and Maryland, said the pandemic offered his business an opportunity 鈥渢o tighten the ship.鈥

鈥淲e have not gone back to buffets,鈥 he said. 鈥淚t certainly wasn鈥檛 fun. Being closed for months was horrendous for employees. But there were a lot of lessons learned.

鈥淲hat we did 鈥 and we may need to do it again 鈥 is when we were shut, we put in every possible type of health and safety screening you could do,鈥 including hand sanitizers and barriers between player positions at table games, measures that were commonly adopted at casinos across the country.

Cordish said those expenses paid off handsomely once the casinos were allowed to reopen in mid 2020.

鈥淧eople were fed up with being cooped up and came pouring back to the casinos, particularly when we did these things,鈥 he said. 鈥淪ince we reopened, business has been terrific.鈥

Eric Hausler, CEO of Greenwood Racing, which owns Pennsylvania鈥檚 Parx casino, said the pandemic opened his eyes to one particular liability.

鈥淲e had a restaurant that was open every day for lunch and never made any money,鈥 he said. When the casino reopened after its pandemic-related closure, 鈥淲e didn鈥檛 bring it back, and no one ever said a thing about it.鈥

Jeff Gural, who owns two racetrack casinos in upstate New York, had a similar experience.

鈥淲e had a Subway sandwich place that didn鈥檛 work,鈥 he said. 鈥淭hen we converted it to a pizza place and that didn鈥檛 work. Someone suggested converting it to a sushi place 鈥 and I don鈥檛 like sushi. And it succeeded.鈥

Gural also said closure helped him realize that spending big money on broadcast ads, billboards and car giveaways wasn鈥檛 bringing in the return he expected, making it easier to scale back spending on such things.

Daily housekeeping of casino hotel rooms has become another casualty of the pandemic in some places. In June, Atlantic City鈥檚 main casino workers鈥 with the state that four casinos were failing to clean guest hotel rooms daily as required by law, and one admitted it did not have enough housekeepers to clean every room every day.

Hospitality industry leaders say the combination of a shortage of housekeeping workers and the reluctance of some guests to allow hotel workers into their rooms during their stay has led to the abandonment of a daily room cleaning standard in resorts across the country.

One lingering effect of the pandemic is smaller payrolls. This is due both to workers who were let go during or shortly after the closures and have not been rehired, and a continuing difficulty in attracting new workers across the gambling industry, as with many others.

Jayson Guyot, president and CEO of Connecticut鈥檚 Foxwoods Resort Casino, said he ordered a complete restructuring of the business from top to bottom during the closure鈥 something that would have been difficult to do had it still been operating.

鈥淚t enabled us to rebuild our margins from 10 to 13% to 18 to 20% now,鈥 he said.

But he also voiced a common concern: Foxwoods has not yet returned to its pre-pandemic business levels.

That is a major preoccupation for Atlantic City鈥檚 casinos, which collectively have yet to return to 2019 revenue and profit levels for in-person gambling.

Second-quarter earnings, , show that five of Atlantic City鈥檚 nine casinos failed to exceed their pre-pandemic profit levels, and the resort as a whole saw a decrease in profits of nearly 1%.

Atlantic City has thousands less casino workers than it did before the pandemic struck. It, like virtually every other casino market, has struggled to attract new workers and retain existing ones.

Hard Rock recently made headlines by spending $100 million to give big raises to 10,000 non-tipped workers, most of them in the U.S. Other companies have given smaller raises recently. Foxwoods has raised its hourly minimum wage from $10.50 two years ago to $14.50 now, Guyot said.

鈥擶ayne Parry, The Associated Press





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