The novel coronavirus (COVID-19) pandemic has brought the majority of casino operations to a halt in the United States, putting unprecedented pressure on business. However, Wynn Resorts has decided to keep on paying its 15,000 employees through May 15. The company is spending $3.5 million a day to meet this pledge.
Wynn Resorts Continues to Pay 15,000 Employees Nationwide
Wynn is seeking to fulfill its promise to employees to continue to pay wages and benefits for two months, including looking for alternative financing to the tune of $600 million through seniour unsecured notes offered by two of its subsidiaries. The casino operator is presently spending roughly $3.5 million a day to keep 15,000 employees on the payroll through May 15.
At a time when the majority of competitors have furloughed their staff and gone to “mission critical” staff downsizing, Wynn Resorts and Las Vegas Sands have decided to retain their employees and help them ride the coronavirus pandemic through.
Commenting on this decision, Las Vegas Sands CEO and casino boss Sheldon Adelson said that he was hoping he could keep his staff on the payroll by such a time that business could reopen, and that it was the right thing to do, but also good business, too.
Meanwhile Wynn has suffered from the COVID-19 pandemic the same way the rest of the casino and entertainment industries have, with all non-essential gatherings and businesses ordered to shut down in Las Vegas and Boston where Wynn owns properties.
According to the Securities and Exchange Commission 8K, the sum Wynn is after has been upsized from $350 million previously to $600 million today. Meanwhile, the decision to retain staff has been carried out at the behest of Wynn CEO Matt Maddox with the approval of executives.
Wynn also released preliminary revenue forecasts for the first quarter of 2020, with the company expecting between $912 million and $969 million in total revenues through March 31, a significant reduction in operation size compared to the $1.64 billion posted in Q1 2019.
The company had to cease all activities in Massachusetts and Nevada at the behest of the respective gaming authorities in both states on March 15 and March 17 respectively. Yet, outside the United States, there have been some signs of improvement.
Wynn’s Macau Operations Still in the Red but Running
Owing to its global footprint, Wynn has been able to restore operations in Macau, although still generating cash costs in excess, the company commented. The COVID-19 outbreak first affected Macau in February, forcefully shutting down all casinos for a period of two weeks.
Realistically, Macau was a precursor to what the United States’ casino industry would experience only a month after, but nobody at the time expected the coronavirus to lead to the complete shutdown of all casinos.
Even though casino operations in Macau had been restored on March 20, 2020, the Wynn group said that due to the reduced profile of tourism globally, Wynn Macau Ltd., the company that operates the Wynn Macau resort, is still struggling to generate pre-crisis revenue.
For the time being, the company is employing health safeguards, limiting the number of seats per table and ensuring slot spacing, mask protection, social distancing and more. The company didn’t specify when the measures would be lifted.
According to the group, the Macau properties have $800 million in cash and cash equivalents. The group has additional $74 in borrowing capacity as of the end of March 31.