Atlantic City casinos finished 2019 with gains in both revenue and operating profits, but it’s all a distant memory in this new pandemic reality.

Figures released this week by the New Jersey Division of Gaming Enforcement (DGE) show AC’s nine casinos – and two of their standalone online gambling operations – reported combined revenue of nearly $740.5m in the final three months of 2019, up 5.1% from the final quarter of 2018.

As usual, the Borgata led the revenue chart with just under $196m, a modest 2% year-on-year improvement. Second-place went to the upstart Hard Rock Atlantic City ($93.8m, +15.7%), which didn’t open its doors until mid-2018. The biggest gainer was the Ocean Casino Resort ($60.8m, +45.4%), which also opened in mid-2018 but struggled to match the Hard Rock’s performance out of the gate.

Combined gross operating profits shot up 78.7% to $129.2m, despite three casinos reporting negative profit growth in Q4. The Borgata claimed top spot with $44.6m, although this was down 1.4% year-on-year. Harrah’s claimed second-place ($18.3m, +36.3%) while Ocean Casino roared back to profitability with $9.3m versus a $22.3m loss in Q4 2018.

Sweden’s gambling operators have weighed in on the government’s proposal to severely limit online casino deposits, losses and bonuses for the rest of the year to minimize pandemic-related excess.

Last month, Social Security Minister Ardalan Shekarabi unveiled a plan to impose a weekly gambling deposit limit of SEK5k (US$500), along with loss limits for online casino play and a cap on bonus offers of just SEK100. Stakeholders were invited to submit any comments by this Thursday.

With that window now closed, some operators have begun sharing their views with the public. Patrik Hofbauer, CEO of state-run operator Svenska Spel, who claimed not to have seen “any direct increase in risk gambling since COVID-19 hit the world,” said his group “do not see that further regulations are justified at present.”

However, Hofbauer offered an alternative three-step plan to achieve Shekarabi’s aims of protecting Swedish gamblers from potential harm. If online casinos are the problem, apply the new limits only to online casino products and leave other verticals alone. Hofbauer urged Shekarabi to follow the lead of gambling addiction researchers, who view loss limits as more effective than deposit limits.

This week in gaming markets around the world: Sweden flattens the curve while gaming stocks surge above pre-virus levels. Las Vegas prepares to reopen, but to what crowds? Hong Kong and Macau discuss a travel bubble that would make quarantines unnecessary. Meanwhile, William Hill is finally recovering in the United Kingdom but the Bank of England is printing money at an all time record pace.

Sweden

Betsson and NetEnt are performing spectacularly as expected, while Sweden has flattened its coronavirus curve without locking down the country. This raises serious questions about the necessity and effectiveness of lockdowns, and it’s certainly good news for Betsson and NetEnt.

Betsson is up 130% since bottoming, and has surpassed pre-virus levels. NetEnt is doing even better, up almost 150%, and surpassing highs all the way back in February 2019. Continue to hold these stocks and reinvest dividends, but no need to add more at these levels. Both companies are still at risk generally from monetary conditions. If gold keeps climbing to new records as it has been against the Swedish Krona almost every day now, then profits in these stocks will have to be locked in, unfortunately, and moved mainly into gold and some bitcoin (BSV) before the Krona collapses. The currency is looking very weak right now.

With many of the world’s casinos currently shut down, the trickle effect of hard times had to eventually reach gaming suppliers. PlayAGS, a gaming equipment and slot machine manufacturer, and TransAct Technologies, a casino and food safety equipment supplier, are both reporting huge losses, and worries about their long term prospects.

In an earnings call, PlayAGS president and CEO David Lopez predicted many firms will be closing up shop pretty soon. “Very small gaming suppliers, I think, will begin to roll up and be part of the larger gaming suppliers.” He said. “I wouldn’t be surprised to see a little bit of consolidation here and there.”

The Las Vegas-based company reported $54.3 million in revenue in the first quarter of 2020, down 26 percent from the same time last year. As a result, the company is focused on saving cash. It’s used salary reductions, layoffs and furloughs to get cash burn down by 80 percent, reducing it’s workforce by 10%, and Lopez expected the road to recovery could be long and painful.

“It shut down abruptly, and over the course of about a week,” he said. “The ramp-up’s going to take a number of weeks and months. Even when a casinos — or all casinos — are open 100 percent, it doesn’t mean 100 percent pre-COVID revenues will be in place.”

He’s more than likely just erring on the side of caution (in an exaggerated way), but the mayor of Detroit, Michigan, Mike Duggan, believes that casinos might ultimately need to stay closed for up to a year. At least, this is how recent comments he made regarding the coronavirus-forced casino shutdown and a timeline for recovery. Casino operators everywhere are trying to prevent themselves from experiencing heart attacks after losing revenue for about two months – it’s hard to imagine what a whole year would do.

Speaking during a press conference this past Wednesday, Duggan indicated that he wants to keep casinos shuttered until a coronavirus vaccine or some type of antiviral remedy is found that makes it safer for people to be outdoors and around others. He added, “So we’re going to have to deal with it. Do the casinos end up reopening with 25 percent or 30 percent capacity? I don’t know.”

Perhaps the mayor was just trying to win brownie points with Michigan Governor Gretchen Whitmer, already a controversial leader prior to the coronavirus debacle. She has made it difficult for online gaming to be approved in the state, despite overwhelming support, and has had more than a few run-ins with legislators. She is now also facing at least one lawsuit and several heated protests that are seeking her ouster as a result of her orders to keep non-essential businesses on lockdown.

The decision to block iGaming might now appear to Whitmer to not have been the smartest move, as the activity would have allowed the state to continue earning gaming revenue during the lockdown. A second attempt at introducing iGaming has found more support, but not in time to get things going before COVID-19. As a result, the revenue increases seen at Detroit casinos are going to be completely wiped out.

Golden Entertainment is hoping that Nevada will share plenty of similarities with Montana. The Strat’s operator, as well Arizona Charlie’s and 60 Las Vegas pubs and taverns, thinks pent up demand could mean big revenues when Governor Steve Sisolak eventually allows Nevada gambling operations to resume.

Montana’s recently re-opened slot machine locations have revealed pent-up demand at pre-closure levels, causing CEO Blake Sartini to be optimistic on a conference call about what it could mean for Nevada locations, which they hope will reopen by the end of May. “We have not missed a beat in Montana,” Chief Financial Officer Charles Protell added.

But before getting to that good news, they covered the financial hit the company has taken. Golden Entertainment Inc has drawn from its $200 million credit facility and deferred capital expenses to endure the COVID-19 pandemic, and reported a 13.6 percent decline in revenue. Net losses are up by a multiple of four year over year.

“The COVID-19 pandemic forced the mandated closure of all our operations beginning in mid-March and continues to have an unprecedented impact on our business and the gaming and entertainment industry in general,” Sartini said. “This is reflected in our first-quarter financial results, notwithstanding our significant year-over-year growth through February prior to the suspension of our operations.”