Southland Casino Racing set to reopen Monday; Tunica casinos waiting

Thursday 14th May 2020

Southland Casino Racing is set to reopen Monday, while its competitors for Memphis-area customers in Mississippi await the go-ahead from state officials.

The West Memphis casino owned by Delaware North said it will follow the measures outlined by Arkansas Gov. Asa Hutchinson through its "Play It Safe" reopening program. Southland closed March 17 in response to the COVID-19 pandemic.

"The health and safety of guests and employees is above everything," David Wolf, president of Southland Casino Racing, said in a statement. "Throughout our temporary closure and during the development of the Play It Safe program, we have been working closely with state and local government officials and public health officers to ensure we are taking appropriate safety precautions."

Southland said in a news release Wednesday it "will feature a reduced number of slots and no table games, live racing or sports betting" under its reopening program. Casino operating hours will be 9 a.m. to 3 a.m. Sunday through Thursday and 9 a.m. to 5 a.m. Friday through Saturday.

Casinos in Arkansas must have a safety plan approved by the secretary of health to reopen, per a directive by the Arkansas Department of Health. Among the requirements each plan must include: a 33% capacity limit, requiring face coverings "for all persons present," maintaining physical distance during shows and live performances, and screening staff and customers for possible illness or exposure to COVID-19.

"This approach is based on the best available scientific evidence and a consensus of experts at the Arkansas Department of Health," the directive says.

Southland guests will be required to wear a mask or other face covering, be added to a guest registry as a record of their visit and have their temperatures taken upon entry, according to the casino. Southland will have an on-site "Clean Team" to sanitize the casino's surfaces.

Social distancing protocols will be in place throughout Southland, and no smoking will be permitted inside the building. Southland will have designated smoking areas outside the building.

With Southland being a premier West Memphis tourist attraction, the city has not been immune to its closure. Southland's shutdown means fewer tourists staying at hotels or eating at restaurants, along with less tax revenue for the city, said West Memphis Director of Tourism Jim Jackson.

Southland posted $24.5 million in gambling net winnings in February and $4.9 million in tax revenue generated by gaming, according to the Arkansas Racing Commission. In March, that dropped to $14 million and $2.8 million, respectively.

"It's been detrimental to the local economy, no doubt," Jackson said.

South of Memphis, casinos in Tunica, Mississippi, await guidance from the state on when they can reopen.

Mississippi closed all its casinos in mid-March to curb the spread of the coronavirus. Gov. Tate Reeves has since said he believes casinos in the state will be open by Memorial Day, the Biloxi Sun Herald reported.

The casino closures have caused gaming revenues to fall sharply month over month. In February, Mississippi casinos saw $175.5 million in adjusted gross gaming revenue, according to the Mississippi Gaming Commission. In March, it was $110.3 million.

For casinos in Tunica County and Coahoma County specifically, adjusted gross gaming revenue dropped from $45.4 million in February to $29.3 million in March.

When asked about the state's casino reopening plan Monday, Allen Godfrey, executive director of the Mississippi Gaming Commission, said he would share that information once it's available.

Gold Strike Casino Resort in Tunica said in a statement that once the state lifts its mandatory closure of casinos, "we will circle back with Gold Strike reopening plans." MGM Resorts, which owns Gold Strike, has laid out a safety plan that includes mandatory masks for employees, 6-foot physical distancing wherever possible and hand-washing stations in high-traffic areas.

The parent company of Sam's Town Hotel and Casino, also in Tunica, said it's too early to discuss reopening plans in Mississippi.

Larry Gregory, executive director of the Mississippi Gaming and Hospitality Association, which advocates for the state's gaming industry, said the path forward for casinos to safely reopen is more complex than how Mississippi casinos approached reopening after Hurricane Katrina and the 2011 Mississippi River floods.

"We had some advanced warnings with the floods and hurricanes, and we prepared," said Gregory, who led the Mississippi Gaming Commission from 2001 to 2011. "We don't have much preparedness for this. We're having to gauge this thing day to day based on not physical damage but gauging it on the health and safety of people."

The association has sent Reeves and the Mississippi Gaming Commission its own recommended reopening guidelines.

Gregory said it is calling for slot machines to be appropriately distanced from each other and disinfected after each customer use, keeping poker rooms closed and having casino employees wear face masks. The association is not recommending any capacity reductions, he said.

"Basically, we're looking at slots and table games at this point (to reopen)," Gregory said, adding that the likelihood of table games immediately reopening remains up in the air.

Delaware North has closed nearly every one of its 200-plus locations, including Southland, due to the coronavirus. Continued financial losses have forced the company to put more than two-thirds of its 3,100 full-time employees on temporary leave, according to a news release. Those still with Delaware North are taking pay cuts.

"In the early days of the pandemic, Delaware North took immediate emergency actions to stabilize the financial outlook, including restricting business travel and delaying ongoing projects," Delaware North said. "Now the company, along with many others in the hospitality industry, is absorbing ongoing financial losses as a result of government directives appropriately aimed at containing the spread of COVID-19."

Barry Jonas, a gaming analyst at SunTrust Robinson Humphrey, said of the limited number of casinos that have reopened in the U.S., business was strong.

"In some places, you've seen numbers stronger than prior levels," Jonas said. "That's interesting, because there are clear social distancing protocols in place which limits the amount of casino supply. ... I think there's a clear pent-up demand for folks stuck in the house looking to get out."

The question remains how long this trend continues, Jonas said, as older casino-goers remain cautious of leaving their homes and air travel to destination resorts like those in Las Vegas could remain a tougher sell. Regional destinations that are a short car ride away may be seen as less of a commitment for customers, and therefore the safer choice, he said.

Concerns aren't limited to customers. Casino workers across the country, including in Mississippi, are among those pushing for more stringent measures to protect gaming industry employees before casinos reopen, according to an Associated Press report.

"My son works at a small hotel property. Is he going to bring a virus home to me?" asked Brenda Tucker Cassity, a bakery worker at the Beau Rivage casino in Biloxi, according to the AP. "I have elderly parents. I worry I might be bringing it home to them."

Jackson said he's comfortable that Southland will follow the guidelines Arkansas lays out for them, although he emphasized the seriousness of the coronavirus.

"It's going to be difficult, and it's going to be a little scary at the same time, to be responsible for even up to a third of the capacity right now," he said. "But we're going to try and get back to life as normally as we can."

Altering casinos' gaming layouts for safety purposes can be done, Jonas said. Many casino properties have too many slot machines in the first place, with utilization rates less than 50% at the average casino, according to Jonas.

Near-term casino operations will focus much more on cleanliness and sanitizing, Jonas said, as companies will look to make sure the virus isn't spread at a casino and damages their reputation.

Gregory doesn't anticipate high demand in the immediate aftermath of Mississippi casinos reopening, saying customers will have to get comfortable again with the idea of going to large venues like casinos first.

"I think we're going to see a smarter customer," he said. "We're going to have to contend with that."

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