Below is an excerpt from a complimentary research note by our Gaming, Lodging & Leisure analyst Todd Jordan. We are pleased to announce our new Sector Pro Product Gaming, Lodging & Leisure Pro. Click HERE to learn more.
News from the highly anticipated Clark County Commission’s Covid meeting last night resulted in a favorable (we think) ruling for the casinos and business owners in the Las Vegas area, including the casinos on and off the Strip.
Capacity and hours of operation arrangements remain unchanged, customers don’t have to wears masks, or show proof of vaccination, but employees at virtually all establishments will now be required to wear face masks, regardless of vaccination status.
There were rumblings in the media and Twittersphere that customers might be asked to wear face masks inside on the casino floors, but that is not the case, at least not for now.
Clark county is battling a wave of Covid infections and hospitalizations among the local populace.
In the early days of the vaccine campaigns, Clark County and NV had done a solid job on vaccinating the public but has fallen behind the national averages in recent weeks.
Given the recent outbreak in the region, it’s quite possible that numbers to start Q3 have been impacted, but if cases come down and capacity levels remain the same, we’d expect much of the “lost” GGR to come back in short order.
Judging by some tweets (HERE and HERE) from Strip / LV insiders, the Strip looks like it could be seeing an air pocket in demand over the next couple weeks as quoted room rates have reportedly fallen off recent highs.
While Covid headlines are likely playing a role, slower service and once again high room rates (when accounting for the resort fees) could be contributing factors as well.
We do fully expect the LV Locals business to be more resilient than the Strip to any Covid shocks.
Our top gaming picks RRR and BYD both hold considerable exposure to the area, and we continue to recommend those stocks on the dip and into earnings. Stay tuned for a more in depth earnings preview.