Nevada Gov. Steve Sisolak’s (D) temporary, tighter new restrictions on the state’s gaming properties and restaurants — as well as other enterprises — could lead to some businesses closing, possible layoffs, and a slower economic recovery, according to a prominent local economist.
Stephen Miller, director of UNLV’s Center for Business and Economic Research, warned that operating at 25 percent of capacity — rather than the current 50 percent — “will cause some businesses to close rather than continue to operate. They lose more by operating than by shutting down.”
Sisolak’s directive, announced on Sunday, requires capacity to be lowered from 50 to 25 percent at bars, restaurants, and on casino gaming floors. It goes into effect on Tuesday and lasts for three weeks.
The governor will also require all establishments which serve food at tables to no longer accept walk-in customers. Reservations are required. No more than four guests can sit at a restaurant table. Also, casino showrooms will be restricted to 25 percent capacity or 50 guests, compared to the current cap of 250 people. Casinos must select the option that leads to a lower number of attendees.
“This will further slow the recovery process,” Miller told Casino.org. “The [economic] recovery from the COVID-19 recession has slowed considerably in the last few months.”
Capacity Limitation Could Hurt Business
Brian Ahern, MGM Resorts’ director of media relations, told Casino.org that the company is “immediately working” to comply with all of Sisolak’s new restrictions. “The health and safety of our employees and guests is our number one priority,” Ahern added.
A spokesperson for Caesars Entertainment said their Nevada properties will also comply with the governor’s new directives. “Our restaurants and bars will remain open,” the spokesperson added.
Also, Wynn Las Vegas released a statement saying, “We believe … Gov. [Sisolak] made a prudent decision that will protect public health. We will, of course, implement the directives of the pause.”
Some restaurant owners have complained to the Las Vegas Review-Journal that some of the new requirements will be challenging to follow.
“You’re going to have walk-ups, regardless,” Scott Frost, owner of Hussong’s Cantina at The Shoppes at Mandalay Place and in Summerlin, told the Review-Journal about the reservation-only policy. “People from out of state don’t know that there’s restrictions. We’re not going to … tell them they have to make a reservation, so that’s a tough one to enforce.”
Some restaurant and bar owners further warn they cannot remain in business at 25 percent occupancy. The lower capacity also comes in late November and December. The time between Thanksgiving and New Year’s Eve is financially critical for many restaurants and bars.
Looking ahead, Sisolak on Sunday did not rule out the possibility of restaurants ending all inside dining in December if the COVID-19 case numbers are not brought under control.
Sisolak Balances Health Risks, Economic Needs
Sisolak is facing a dilemma with balancing the needs of businesses with the health risks posed by COVID-19.
Earlier this year, Sisolak shut down casinos for months. Gaming properties are still hurting from the lost revenue and some have implemented weekday closures.
But as of Sunday, the state has seen 133,888 cases since the outbreak began. There have been 2,017 deaths. Many casino and restaurant workers worry about catching the virus.
Once the three-week period with the new restrictions ends, Sisolak “will face similar — but more difficult — decisions,” Miller predicted. In December, the governor might choose to scale the restrictions back, such as return to the current 50 percent capacity, keep the tighter restrictions in place, or add stronger requirements.
Given the specific restrictions, Sisolak “needs the vast majority of the public to conform to his requirements,” Miller explained. “There will be significant opposition to follow the restrictions.”
However, Lori Nelson-Kraft, senior vice president of communications at the Las Vegas Convention and Visitors Authority (LVCVA), told Casino.org on Monday that “putting the health and safety of our residents and visitors first remains our highest priority.”Looking at the overall Las Vegas economy, Miller predicted that “much pain will descend on Las Vegas” without an extension or renewal of the federal CARES Act. It is the coronavirus relief legislation that was approved earlier this year. But most of its programs expire at the end of December.“We are still about halfway recovered from the COVID-19 recession in Las Vegas,” Miller added. “The trends are tough to reverse.”
Light at End of Coronavirus Tunnel
There is an end in sight. Better times may soon be ahead.
“The news of highly effective vaccines … is the panacea for the industry’s woes,” Anthony Cabot, Distinguished Fellow of Gaming Law at UNLV’s Boyd School of Law, told Casino.org. “Once they are widely available, the pent-up demand will create a remarkable comeback for the casinos, employment, and the state’s economy.”
“While we recognize these are challenging times, we are encouraged by positive news of vaccines on the horizon and believe deeply that our resilient community will rebound,” echoed MGM’s Brian Ahern.