"I think the recovery here is going to be quicker than most any other place in the United States."

  • Former MGM Resorts CEO Jim Murren

Let's say you live in Las Vegas, as I do. And let's start with two super, super, super extreme scenarios – strategies – for dealing with COVID-19 and opening up Las Vegas and the Las Vegas Strip moving forward.

  1. Strict absolute containment. The Las Vegas Strip remains closed for the duration of the pandemic (~18-24 months). We fence in Las Vegas, and block access to non-residents. Coronavirus transmissions go down to zero; social distancing guidelines are largely relaxed, and life in Las Vegas otherwise mostly returns to normal, albeit without the income generated by locals who work on the Strip.
  1. The status quo. The Las Vegas Strip opens along with the rest of the city, and no travel restrictions or other measures are put into place to control who can visit Las Vegas and under what conditions.

A month ago, in order to understand the timeline – the "when" – for the opening of Las Vegas and the Strip, we asked the more fundamental question: "Why reopen the Las Vegas Strip?"

Casino Floor

Image Source: Getty Images

To recap, both Wynn Resorts (WYNN -1.46%) and MGM Resorts International (MGM -2.21%) moved to shut down all of their Las Vegas Strip casinos on March 15th, while Nevada Governor Steve Sisolak (D) shut down the entire state – including the entirety of the Nevada gaming industry for the first time in its history – two days later. The entire casino industry has been closed since. And while some lockdown restrictions in Nevada have been eased in a Phase One reopening starting May 9 (including restricted reopenings of restaurants, salons, and some retail, but excluding casinos) extending until May 30, a reopening date for casinos has not yet been set, and Las Vegas Sands (LVS -1.13%) has stopped taken reservations for the Venetian and Palazzo entirely.

The main point of last month's discussion was that when Las Vegas comes off lockdown and when the Las Vegas Strip reopens are – or at least should be – two completely different questions, with two different timelines. Whereas I think Las Vegas as a city has a relatively good chance at containment – it's isolated in the middle of the desert, and is sprawling suburbia aside from the Strip where few people actually live (in case you were wondering) – opening the Strip and inviting tourists is another can of worms entirely. As it stands, Las Vegas draws 42 million of the most geographically diverse visitors every year concentrated onto a 4-mile Strip, and is a Petri dish for a virus, and little different from a cruise ship in that regard.

As we'll discuss in greater depth in a minute, the biggest threats with regard to virus containment efforts in most any location are visitors coming or residents returning from elsewhere; this is particularly true if we do not have a mechanism in place to screen visitors before they arrive.

And ultimately, our ability to block unwanted visitors will determine whether we can open the Las Vegas Strip without having to close it again.

That said, to understand why the status quo is a problem, the first question we need to ask is this: What happens when the first new COVID-19 cases emerge on the Strip?

What happens when the first new COVID-19 cases emerge on the Strip?

This isn't really a hypothetical question, because we've already seen this happen. On Friday, March 13, the nightclub operator Hakkasan Group announced that one of its employees had tested presumptive positive for COVID-19, and immediately suspended all of its Las Vegas venue operations. That same day, MGM Resorts announced that several employees had tested presumptive positive, including an employee at Luxor.

Two days later on Sunday, March 15, both Wynn and MGM announced that they were shutting down all Las Vegas operations; and then two days after that, Governor Sisolak shut down the entire state.

Hence the current situation.

In February, Macau reopened after closing for two weeks. But within a month, on March 18 Macau banned foreign visitors after seeing a rash of new COVID-19 cases, further tightening visitor restrictions just a week later. Macau saw gaming revenues drop 80% in March, and 97% in April.

The situation in Macau prompted Grant Govertsen of Union Gaming to tell the Las Vegas Review-Journal in an April 17 article that "It is important to keep in mind that although the Macao casinos have reopened, for all intents and purposes they probably just should have stayed shut. Macao is on total lockdown, and customers aren't able to get to the city."

On March 24, Hong Kong – an early stalwart in its ability to prevent a widespread COVID-19 outbreak – announced that it would close its borders to non-residents and ban the sale of alcohol at bars in an attempt to curb a spate of new infections.

Singapore – another of the early darlings noted for its sterling initial COVID-19 response – recorded its first confirmed case January 23, and had only reported 200 total confirmed cases as of March 15. By March 22, that number hit 455, and effective just before midnight March 24, Singapore banned all foreign visitors on short-term visas or from the right to transit through Singapore. As the case count hit 1,309 on April 5, Singapore moved to shut down its two casinosGenting's Resorts World Sentosa and LVS' Marina Bay Sands – from April 7 to May 4, before extending the shutdown until June 1 as the case count reached 9,125 on April 21.

Even South Korea – widely regarded as a gold standard for its handling of the pandemic – is not immune to setbacks. This past Saturday, just four days into a new phase of reopening, Seoul mayor Park Won-soon shut down the city's clubs and bars indefinitely after the discovery of a cluster of at least 54 infections tied to one man visiting three separate nightclubs on May 2.

On that, Park remarked: "Just because of a few people's carelessness, all our efforts so far can go to waste."

You get the idea. This time around, Las Vegas will be better prepared to minimize the impact of new cases with an enhanced ability to test, trace, and isolate new cases as we encounter them. But how many new cases do you suppose it will take to scare non-idiot potential visitors, or otherwise force the Strip to peel back operations or close again?

Outbreak: The January Las Vegas (Super-spreader) CES Event

While the first confirmed COVID-19 case in Las Vegas was recorded March 5, an APM Reports article published April 23 made a compelling case that the coronavirus was here in Las Vegas as early as the January 7-10 Consumer Electronics Show (CES), while fueling the possibility that this year's CES was a – or perhaps even the – super-spreader event that helped coronavirus spread across the country and beyond.

The story starts with Michael Webber, a professor at University of Texas at Austin who – like it seems many others – after leaving CES came down with a set of unusual but somewhat flu-like symptoms, including some now-familiar ones: fever, shortness of breath, a dry cough, pains and body aches. A serology test (which can identify antibodies that may indicate whether a person has recovered from COVID-19) in April revealed what Webber had come to suspect – that what he and perhaps many others had experienced following CES was, in fact, likely COVID-19.

This year's CES was attended by roughly 170,000 people from 64 countries, including 100 attendees from Wuhan – the original COVID-19 epicenter – in China. It was, in other words, the perfect petri dish for a virus looking to spread.

On April 21 – two days before the APM report was published – the Santa Clara (CA) County Public Health Department identified two individuals who had died at home with COVID-19 on February 6 and February 17, and also a third COVID-19-infected individual who had died March 6. That February 6 death came 23 days before what was previously the first known U.S. COVID-19 death, a male in his 50s who had died in Washington State on February 29.

To the authors of the APM report, the January CES may very well have been the event that connected the dots to the early Santa Clara cases, and perhaps many other early yet-to-be-confirmed cases.

But whatever the case may be, we definitely do not want to be the idiots who spark the next wave.

On Visitors and Containment: When the Rest of the World Says "Stay Away"

Las Vegas Mayor Carolyn Goodman caused a mini-eruption when she called the month-old lockdown "insanity," demanding that Governor Sisolak reopen Nevada in an April 15 City Council meeting. "For heaven's sake, being closed is killing us already, and killing Las Vegas, our industry, our convention and tourism business that we have all worked so hard to build," she said, while noting that the number of deaths statewide represented "less than one-half of 1%" of the state's population.

The following Tuesday, Goodman upped the ante when she presented Katy Tur on MSNBC a survival-of-the-fittest approach to reopening, essentially suggesting that the state lets everything reopen, and simply close businesses as new COVID-19 cases appear: "Let the businesses open and competition will destroy that business if, in fact, they become evident that they have disease, they're closed down. It's that simple."

The next day, Goodman found yet another gear in a now-infamous interview with Anderson Cooper on CNN. After saying "I'd love everything open because we've had viruses for years that have been here," she offered Las Vegas up as a "control group" – a test case for reopening without a plan.

This sequence of performances prompted Las Vegas native Jimmy Kimmel to call for Goodman's resignation; Nevada-based journalist Jon Ralston to declare the Cooper interview "the single most embarrassing thing [I] have seen by a NV pol in 35 years here"; and retired poker pro Doug Polk to file a petition to recall the mayor.

It should be clarified that Goodman is only mayor of Las Vegas, which is only about one-third of the population of Clark County, and does not actually include the Las Vegas Strip (which is located in unincorporated Clark County). That said, Goodman's call to open Las Vegas – including the Strip without any apparent qualification – is completely antithetical, when virtually the rest of the planet is telling visitors to "Stay away."

We've already talked about the steps Macau, Hong Kong, and Singapore have taken to lock down their borders and block visitors. For reference, as of Sunday, Macau has not recorded a single new COVID-19 case in 32 days. And on Saturday, Hong Kong reported its 20th day in a row without a local infection, with a handful of imported cases in the past week.

But what about another destination closer to home?

Hawaii – a state largely dependent on tourism, much like Nevada – is doing everything possible to keep visitors away. On March 26, the state instituted a 14-day quarantine period for incoming travelers, serving as a deterrent to tourists by forcing visitors to quarantine in their hotel upon arrival. The nonprofit Visitor Aloha Society of Hawaii (VASH) – armed with a $25,000 grant from the Hawaii Tourism Authority – launched a program on April 6 to send tourists who break quarantine rules back to their airport of origin. Other tourists caught breaking quarantine have been arrested.

In contrast to the mayor of Las Vegas, the mayors of Honolulu, Kauai and Maui county – three of the state's four mayors – on April 1 sent a letter to the White House asking to stop all non-essential travel to Hawaii, only to have Governor David Ige disregard the request, saying that it was up to the airlines and that they could not discriminate between essential and non-essential passengers.

By May 6, only about 5,000 total visitors had arrived to Hawaii since the quarantine rules were implemented, vs. a pre-pandemic intake of roughly 30,000 visitors per day. The curve in Hawaii has largely flattened since mid-April, with only two new cases Sunday bringing the total to 633 cases statewide, after reporting three new cases Saturday and zero cases on Friday.

Incidentally, the first death of a diagnosed COVID-19 patient in Hawaii was a patient who had traveled to Las Vegas at the end of March.

Meanwhile, Spain announced today that it would implement a similar 14-day quarantine for foreign visitors upon arrival staring this Friday, May 15. The United Kingdom is also expected to impose a similar 14-day quarantine for all visitors arriving by air except those from the Republic of Ireland. This would require visitors to declare an address and self-isolate at a private residence, and would go into effect at the end of the month.

Why is it, then, that when the rest of the world is trying to keep visitors away in order to protect their local populations, that some people in Las Vegas seem to be literally dying to bring people here before we are ready, and before we have the proper measures in place?

On Travel Bubbles and the Western States Pact

In perhaps the biggest development of the past month with regard to the reopening of the Las Vegas Strip, Governor Sisolak on April 27 announced that Nevada, along with Colorado, would join California, Washington, and Oregon in a Western States Pact, forming a working group of Western state governors with similar approaches to dealing with coronavirus and reopening their respective state economies.

Ultimately, the biggest benefit to Nevada lies in the potential formation of a safe travel region, which could provide a mechanism that could allow for freedom of travel for residents of states within the region, while setting standards for restricting visitation from potentially unwanted visitors from outside the region.

Last week, New Zealand prime minister Jacinda Ardern joined a meeting of the Australian national cabinet via video conference to discuss the formation of a trans-Tasman "travel bubble" that will allow people to travel freely between the two countries at some point in the future as the two countries ease lockdown restrictions. New Zealand began imposing travel restrictions February 3 – before even recording its first case – and both countries closed their borders in mid-March, and imposed strict lockdowns with remarkable results thus far. New Zealand in particular has drawn heavy praise for crunching its curve and virtually eradicating coronavirus within its borders.

As is the case with the Western States Pact, the key to the discussion is the similar approaches the two countries have taken, along with naturally shared commerce.

An open border between Australia and New Zealand is still seen as being "many months" away. In the meantime, an expert panel was formed – the Trans-Tasman Safe Border Group – which will convene this Tuesday and spend the next three to four weeks exploring what the trans-Tasman bubble will entail, possibly including:

  • Pre-travel health checks
  • Health checks upon arrival, including temperature checks
  • "Checkerboard" seating patterns on planes, where nobody is sitting directly in front of anyone else

Given that California alone typically accounts for around 25%-30% of visitors annually to Las Vegas, shared standards for travel within the region and for accepting travelers from outside the region are issues that we should expect the Western States Pact to discuss – and ideally before the Las Vegas Strip reopens.

And you understand the broader implications here: New Zealand and Australia are in far better shape than anywhere in the continental U.S., and yet they think they are "many months" from being able to safely open their borders to each other. Meanwhile, as currently set up, our first line of defense in Las Vegas is a temperature check at the door of the Wynn, and there is nothing stopping anyone from anywhere from coming here. We need to be able to screen a visitor from Georgia or other potential hotspots before they even get on a plane, and screen them again upon arrival.

The Economic Upside of Opening the Las Vegas Strip

According the UNLV Center for Gaming Research, the Las Vegas Strip hotel casinos provided 96,037 jobs in 2019. What's important to realize is that there are not 96k jobs at stake in reopening the Strip right now – those jobs are largely gone for the foreseeable future – but rather a fraction of a fraction of that number.

MGM Resorts, for example, indicated in its April 30 quarterly earnings call that only Bellagio and New York-New York among its Strip properties would open in the initial phase of the reopening the Las Vegas Strip, whenever that will occur. Similarly, Caesars Entertainment (CZR) CEO Tony Rodio said on the company's earnings call Monday that only Caesars Palace and one other of the company's Strip properties would open in the initial phase.

Elsewhere in Las Vegas, Boyd Gaming (BYD -1.94%) anticipates only opening its locals properties in Las Vegas in an initial casino opening phase – and not its downtown Fremont casinos, which rely on a Hawaii source market currently on lockdown, and which may be subject to crowd control measures on Fremont Street which have yet to be prescribed. And Red Rock Resorts (RRR -0.59%) will open its locals casinos in the initial casino phase without Palms, Texas Station, and both Fiesta casinos.

Moreover, most all of the Strip properties seem to be planning to open with limited hotel capacities, while the new COVID-19 safety policies prescribed by the Nevada Gaming Control Board limits casino gaming floors to operating at 50 percent capacity, while setting the following limits on table games capacity:


Max # of Players









The initial four-player limit on poker tables in particular is likely to – at best – put live poker on ice at most casinos on the Strip, while more likely pushing some of the smaller, fringe rooms toward closure and replacement with electronic machines (i.e. slots and electronic table games).

That said, in addition to the constant threat of reclosure, the main problem for the Las Vegas Strip is demand. As noted earlier, Macau saw gaming revenues drop 80% in March, and with the benefit of a Hong Kong daytrip market – something Las Vegas does not have. Moreover, Macau's Asian source markets seem to be relatively stable (compared to the U.S.) with regard to their approaches to the novel coronavirus, though many of those markets (including Hong Kong) are currently on lockdown anyway, helping lead to Macau's 97% drop in gaming revenues in April.

The gist of it is that there is very little upside in opening the Las Vegas Strip early, but a lot of downside risk if new infections force the Strip to close and the rest of Las Vegas back on lockdown. This is a proposition that any investor or professional gambler worth a lick knows not to take.


The reality is that there are no A+ scenarios here – there is only the best path forward. And for Las Vegas, the game at this point is one of mere subsistence: Our goal right now needs to be to simply make it through to the other side of this.

In an interview with the Nevada Independent published May 8, former MGM Resorts CEO Jim Murren – now head of Nevada's governor-appointed COVID-19 response task force – opined that Las Vegas would recover before any other destination.

I think this is completely possible. As a hospitality destination, Las Vegas has long been at the forefront of innovation, and if Las Vegas can get out in front and set a standard for testing capability here; set up the strongest possible standards for visitors to come here; and utilize new technologies to enhance safety protocols, Las Vegas could potentially establish itself as the safest post-COVID-19 destination on the planet.

But first things first.

  1. The Las Vegas Strip should only reopen once. When the Las Vegas Strip reopens, the plan needs to be to open with the intention of staying open. This doesn't mean that if the Strip opens, we are committed to keeping it open at all costs; rather, what this means is that we shouldn't open the Strip until we believe we can do so without shutting it down again.
  1. If Las Vegas is on lockdown, the Strip must close; if the Strip closes, Las Vegas must go on lockdown; but the Strip can stay closed without Las Vegas going back on lockdown. If it's not apparent by now, the Strip is by far the riskiest part of the equation, and opening it at all requires a lot more thought than most are giving it.
  1. What happens in our source markets matters. Again, we are not operating in a vacuum, and everything that happens elsewhere will affect the level of potential visitor demand; it matters when other states are screwing up, and that everybody will likely be on various degrees of lockdown at different times. Adjust your expectations accordingly.

The prediction I am most comfortable making right now is that – if crowded beaches and assaults on state capitols are any indication – this will not go smoothly.

On some level, any strategy we choose represents a trade-off between the benefits of absolute containment – which, by the way, is completely possible if we wanted it, seeing as we're isolated in the middle of the desert (Do you know what's inside Area 51?) – and both the potential for income and associated risks that come with opening the Strip. And how much risk we are taking in opening the Strip to tourists depends largely on our level of control over who comes here, and under what conditions.

The truth is that if we are doing this right, the Strip does not open before Nevada has an agreement with the other Western pact states regarding travel restrictions. It would be a complete disaster if, for example, visitors from Georgia, Florida, Texas, and Iowa were to come to Las Vegas without qualification and infect visitors from California, Washington, Oregon, and Colorado – not to mention Nevadans. If that were to happen – and if we didn't have proper travel restrictions in place – the fault would lay squarely on the state of Nevada; the governor who let it happen; the mayor with no jurisdiction; and the casino operators who pushed hardest for the Strip to open without such a plan in place.