M Resort Spa Casino and The Tropicana on the Las Vegas Strip have announced they will permanently lay off hundreds of employees in December, the Las Vegas Review-Journal reported. The two casinos operated by Penn National Gaming blamed the cuts on the Covid-19 pandemic’s impact on their businesses.
The Strip Casinos Blame Layoffs on the Pandemic
M Resort said on Monday it plans on laying off 236 employees within two weeks after December 21, for a total of 646 job cuts for the casino since the beginning of the pandemic.
In addition to 702 job cuts on October 15, Hotel-casino The Tropicana will lay off 132 employees beginning December 23 and during the following 14 days. This brings the job cuts to a total of 834, a bit above the 828 employee redundancies announced by the Tropicana over the summer.
According to notices by third-party vendor Aramark, 180 jobs at Park Theater and 164 jobs at the MGM Grand Garden arena will possibly face cuts. A spokesman for MGM Resorts International said no MGM employees are affected, as all layoffs will only impact Aramark employees.
Gaming companies Boyd Gaming, MGM Resorts International, Station Casinos, Full House Resorts, and Caesars Entertainment have all announced layoffs in Vegas and other states since the reopening of their properties.
In a notice to the Nevada Department of Employment, Training and Rehabilitation (DETR), the Tropicana explains the mass cuts are the “unfortunate result of COVID-19 related business circumstances that were sudden, dramatic and beyond our control.”
Operators in Nevada were forced to close in March and began reopening their properties in June. The Last Vegas Strip’s massive decline in visitors since June as well as the new operating conditions for casinos, which include strict cleaning and managing protocols have made it difficult for casinos to recover from their 80-day long coma.
In September, McCarran International Airport in Las Vegas reported 1.7 million passengers in September, down nearly 61% year-on-year.
Nevada Struggles to Recover
Nevada’s unemployment numbers have slowly improved since last April, when it reached a 30.1% unemployment rate, against 3.6% in February, according to the US Bureau of Labor Statistics.
The figures have dropped each month to a preliminary 12.6% rate for Nevada this September, with 191,700 unemployed people. DETR said the state lost 127,600 jobs since September 2019, or -9% over a year.
However, Nevada’s pandemic recovery remains one of the slowest in the US, second-worst after Hawaii’s 15.1 percent unemployment rate.
Penn National’s Stock Soars
As Penn National furloughed or permanently laid off thousands of employees across the company’s 36 casinos since lockdown, its stock skyrocketed by more than 1,900% from $3.75 mid-March to a 52-week high of $76.62 in September.
The company benefits from the return of college sports games, as it recently expanded in sports betting and online gambling, and has undertaken several expansion strategies in order to boost its revenue.
Penn National’s stock closed Monday at $60.68. It is $58.36 as of press time.