From COVID closures to layoffs to hurricanes, how did Coast casinos fare in 2020?
Without those two months of coronavirus shutdown — and being closed three times for hurricanes in 2020 — Mississippi Coast casino profits likely would have been higher than in 2019.
At the end of 2020, the 12 Coast casinos had a combined $1.08 billion in gross casino revenue, according to the Mississippi Gaming Commission.
While that sounds big, it’s $248 million less than in 2019, a drop of 17%.
That averages to $19.5 million less per casino and puts South Mississippi back at 2014 levels, and before sports betting revenue was added to the total.
Across the state, Mississippi casinos saw an 18.5% decline in revenue — the amount wagered at a casino, minus the winnings paid to players and before taxes and expenses. It doesn’t count lost revenue for hotel rooms, restaurants, entertainment venues and convention facilities.
“It’s not as bad as we were afraid it would be,” said Keith Crosby, general manager at Palace Casino in Biloxi.
“I think across the board, all things considered, the industry has done considerably better than our expectations, he said. “We did lose some jobs, unfortunately,” he said, “but we didn’t lose as many as we were afraid of.”
Data on MS Coast casino visitors, job cuts
Divide the total revenue for last year by the 10 months the Coast casinos were open, and the gross casino revenue averaged $108 million per month. For 2019, the monthly average was $109.5 million.
But the casinos were closed for two months. Some of the amenities remain closed, and the impact shows in the numbers.
Comparing November 2020, the latest report available, to November 2019 shows how the coronavirus and hurricanes impacted Coast casinos:
▪ Fewer visitors: As the number of coronavirus cases rose across the country, 114,233 fewer people visited the Coast casinos in November than a year earlier. The payroll for the month was $21.3 million, which is $13.6 million less than in November 2019.
▪ Staff cuts: 1,891 fewer people were employed at Coast casinos in November than the previous year, with many of the buffets still closed, the spas closed or offering limited services, restaurants at limited capacity and no entertainment.
▪ Not as many games: Social distancing between games has 5,113 fewer slot machines and 13 less table games across all Coast casinos.
▪ Reduced check-ins: Hotel occupancy was down 20% year over year, while the average daily rate was virtually the same at $82.42.
▪ No concerts and few meetings: Nobody attended a concert at a Coast casino in November compared to 23,904 a year earlier, and convention attendance dropped by 10,751.
The state, counties, cities, school districts and local first responders will see a smaller share of the casino tax revenue and sales tax from 2020 because of the coronavirus.
Crosby said Biloxi Mayor Andrew “FoFo” Gilich and Mike Leonard, chief administrative officer, recognized early that the city’s tax revenue would be down and took steps to cover the lost revenue.
Casino revenue at Biloxi’s eight casinos was down $189.8 million for the year, and Biloxi officials refinanced bonds and cut expenses to make up the difference in tax revenue.
How casinos in Louisiana, Atlantic city fared in 2020
In a year of disasters for Louisiana, marked by COVID-19 and direct hits by several hurricanes, casino revenue was down $830 million through November. At least 4,790 employees at Louisiana casinos were laid off at some point during the year, according to a report in the Lafayette Daily Advertiser.
Through November, casino revenues in Nevada were down 34.5% for the year, according to CDC Gaming Reports, because of capacity restrictions and COVID-19.
Atlantic City casinos were down 17% for the year. Press of Atlantic City reports that revenue from slot and table games, including internet betting, was $2.64 billion in 2020. With nearly $1 billion in sports bets placed just in December in New Jersey, the state’s revenue was nearly $2.9 billion.
The majority of sports betting is online in New Jersey. Mississippi doesn’t allow online gambling or remote sports betting, and it would be up to state legislators to change the regulations if they want the additional income, as other states are doing.
Future of MS Coast casinos
Coast casino operators are discussing what “after this” looks like, Crosby said.
They don’t have a date when COVID-19 conditions will change, but he said there are a lot of positive indications that things will get better.
KeyBanc Capital Markets analyst Brett Andress said this week that while internet betting will be the story over the next decade, he also likes the brick-and-mortar side of the business. COVID-19 forced operators to go back to casino basics, he said, to drive margin expansion through labor efficiency, reduced comp spending and amenities.
The buffet at Palace Casino is one of those open on the Coast, with servers dishing up what the customers request instead of self-serve. Crosby said some of the changes made during the coronavirus will stay in place, and casino operators will look at the amenities like spas to see if they make sense once people have a sense of security again.
Things are going to get better for South Mississippi casinos in 2021, Crosby contends.
“I hate to say this, but we’re pretty good at recovery,” he said.
This story was originally published January 19, 2021 at 5:50 AM.
