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Las Vegas casino recovery threatened by new California coronavirus lockdowns
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The reintroduction of COVID-19 lockdowns in California and other states adjacent to Nevada poses an emerging risk to Las Vegas casinos battling to recover from both the pandemic and efforts to contain it.
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The new restrictions threaten to choke off the automobile traffic from Nevada's neighbors that has helped the city's storied casinos stay afloat over the past several months while destination air travel that typically underpins the area's tourism remains limited.
"With drive-to business driving the majority of Strip revenues right now, increasing California restrictions/quarantines are a real risk for Strip operators — especially in a seasonally slower time of year," Barry Jonas, director of equity gaming research at Truist Securities, told FOX Business.
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Las Vegas Strip gaming revenue was $2.72 billion through September, down 45% from a year ago, after casinos were ordered in March to close for nearly three months to help slow the spread of COVID-19. Gaming accounts for 33% of Strip revenue.
The closings, which were the first since former President John F. Kennedy’s assassination in 1963, brought the Las Vegas Strip to a standstill, causing revenue to plunge 99% year-over-year in April and May. Business has slowly returned since casinos reopened in June, drawing customers within driving distance as they began venturing further outdoors.
Average daily auto traffic surged 8.1% year over year in September to 126,888 vehicles per day, according to Las Vegas Convention and Visitors Authority data. That follows annual declines of 13%, 10% and 4% in June, July and August – after casinos reopened.