PNG Reopened 70% Of Casinos But Warns Of Layoffs

Regional casino operator Penn National Gaming (PNG) claims that since their COVID-19 closure, it has reopened over 70 percent of its casinos, but thousands of workers will not be long enough to celebrate.

PNG announced on Friday that 30 of its 41 gaming and racing venues have resumed operations after being ordered to close in March to minimise transmission of COVID-19.

Four PNG properties in Ohio and Hollywood Casino in Penn National Race Course in Pennsylvania boosted the total Friday. PNG invites visitors now to casinos in 13 of the 19 states it works in.

Jay Snowden, CEO of PNG, called the news “an important milestone” in the company’s rebound and thanked state regulators for including gaming in their plans for economic revival.

Investors have largely shrugged at the victory lap of PNG, as the stock is currently only about 1 percent up from the closing of Thursday. Then again, from its March 18 low of just $4.52, the stock has risen more than 700 percent, so maybe there is only so much slack left in that chain.

As the pandemic unfolded, around 26k of PNG staff were furloughed, many of whom are now happily returning to work. But with gaming regulators imposing strict caps on the number of gaming positions and limitations on other aspects of casino operations, roughly 10 percent of PNG’s furloughs could become permanent layoffs starting in August / September.

Among the workers impacted are 621 Greektown Casino-Hotel employees in Detroit facing the axis as of September 15. In spite of some of the state’s tribal casinos restarting their operations, Detroit’s three commercial casinos have yet to reopen — and will face tight limitations to gaming positions until they do.

In letters to officials in states where employees could obtain notifications of layoffs, PNG chief human resources officer Gene Clark said the reductions were due to “circumstances that were sudden, dramatic and beyond our control.” Clark said the full effect of the lengthy halt to his operations “was not reasonably foreseeable until now.”

In May, Snowden told analysts that in terms of labour expenditure, PNG would be “really thoughtful around how we ramp up back up what our operating model looks like,” and that businesses in a pre-pandemic environment could likely “operate more efficiently than they did.”

Bank of America analysts this week suggested PNG and rival Boyd Gaming would benefit most from a demand-driven “substantial rebound” across many states. With air travel still being viewed with trepidation by many consumers, the prevailing theory is that in the short term, regional casino operators will enjoy greater returns than casinos in ‘destination’ hubs such as Las Vegas.