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Casino restaurants are allowed to reopen. But will they?

Updated May 18, 2020 - 10:16 am

Restaurants inside casinos are now allowed to reopen. But that doesn’t mean they will.

“We want to wait and see,” said George Karpaty, partner in Pizza Rock, which has a location inside Green Valley Ranch.

Reopening restaurants inside casinos could pose a variety of logistical and economic challenges. And, experts say, it may not make sense for all operators.

The Pizza Rock entrance is inside Green Valley Ranch, for example.

“What we have is a patio door, which is more of an exit than it would be an entrance,” he said. “There’s no signage; it’s really just a fire exit door. Could that be considered not going in the casino? Technically, probably yes.”

Logistics

Amanda Belarmino, an assistant professor of strategic management at UNLV, agrees that could get iffy. For casinos whose restaurants do not have street access, it would be a challenge to prevent people from congregating or roaming to parts of the hotel-casino that are still closed.

“But there are some Strip casinos that are better set up than others” to make this kind of operation work, Belarmino said.

She said she would imagine some demand for some select Strip restaurants but “could not imagine that locals would want to pay for parking.”

It might make more sense for local casinos to open their restaurants, she said.

Caesars spokesman Rich Broome said the company was not given any advance notice of the state Gaming Control Board’s late Thursday guidance regarding restaurants.

“We are evaluating which, if any, of our restaurants may open before the casinos,” Broome said.

Wynn spokesman Michael Weaver offered no specifics but said “we view this as a positive step as we begin to reopen Nevada.”

MGM Resorts International spokesman Brian Ahern said the company had no comment.

Representatives of Las Vegas Sands Corp., Boyd Gaming Corp. and Station Casinos did not respond to a request for comment.

Who’s coming?

Even if casinos have a doable layout for restaurants to reopen, it might not pencil out.

Occupancy limits set by the Gaming Control Board mandate that capacity be halved.

“At what percentage capacity does it make sense to open to make a profit?” asked John Restrepo, founder of RCG Economics and a Las Vegas consultant.

Belarmino added that the expense of opening has to outweigh the potential revenue.

“You have to order the food, get the food in, get the staff back in, and that may be a challenge. Plus, if you’re not opening the entire casino, are you going to make enough money to justify having just those employees back?” Belarmino asked.

And for Strip properties, who will be going?

“We know that for the past couple of decades, the resort casinos have diversified their revenue streams so that they’re no longer as reliant on gaming revenue as they were in the past,” said Stephen Miller, director of UNLV’s Center for Business and Economic Research. “But if the tourists don’t come, it doesn’t matter how diversified you are. You are dead in the water. And that’s where we are right now.”

Robert Lang, director of UNLV’s Brookings Mountain West, said he thinks locals and people from drive-in markets, like California, would dine at a Strip casino property.

“I’m sure there’s some pent-up demand,” he said.

Meanwhile, Restrepo wonders what spending power looks like right now given the large-scale layoffs that have taken place and “wage cuts that will continue to take place for the foreseeable future.”

Soft opening

There are some upsides for casino properties reopening restaurants.

Lang and Miller said that opening restaurants could serve as a soft opening for the rest of a property’s phased reopening.

Opening restaurants now could give casino operators an opportunity to identify trouble spots and address them before other parts of the resort open, Miller said.

And since there is going to be a phased reopening, it makes sense for restaurants to open first, Lang said.

And at the very least, reopening restaurants in casinos is a way to get people comfortable with going inside casinos again, Lang said.

But Pizza Rock might not be the only spot willing to wait to reopen.

“I’d rather be late to the dance than early, because I don’t want to make a mistake that impacts my team and the public,” Karpaty said.

His customers and his employees are his responsibility, Karpaty said. But businesses across the gamut are concerned about liability, and that may pose another challenge to reopening in general.

“I don’t know if there’s enough certainty to know that there’s insurance coverage if someone gets sick,” said Las Vegas business attorney Aviva Gordon of Gordon Law.

“Almost across the board from the clients I have tried to assist, business interruption insurance claims are being denied,” she said. “And that’s enough to give somebody some sort of pause that there wouldn’t be enough of a backstop to protect them from their insurance carrier.”

The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.

Contact Nicole Raz at nraz@reviewjournal.com or 702-380-4512. Follow@Nicole0Raz on Twitter. Review-Journal staff writers Al Mancini and Richard N. Velotta contributed to this report.

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