Ways and Means Committee Briefing: July 28, 2020

On July 28th Maryland’s House Ways and Means Committee shared a briefing featuring updates from the State Lottery and Gaming Control Agency. Learn how current economic uncertainty is impacting the industry in our recap below.

Gordon Medenica, Director
Maryland Lottery and Gaming

Early Steps Taken by the Lottery

• Massive re-engineering of workforce (telework)
• Significant loss of retail base (bars & restaurants)
• Cancelled April launch of new instant tickets
• Delayed launch of second round of Fast Play tickets
• Cancelled all paid advertising (mid-March through late May)

A Good Year, Interrupted

• Before the crisis, Lottery profit was down only $3 million from FY2019 (an all time record year that included a $1.5 billion Mega Millions jackpot roll)
• By the April 23, 2020, Commission meeting, fear that Lottery would be down
• $50 million in FY2020
• Recovery in May/June, Lottery down only $10 million compared to FY2019
• Estimated FY2020 Lottery profit of $583 million will beat the December 2019

BRE forecast of $571 million

• Why are lotteries doing well?
  • No alternative for discretionary entertainment spending
  • Not due to stimulus (Canadian evidence)

Agency’s Recent Focus: Casinos

• Attempt to limit activity voluntarily before shutdown
• Shutdown March 16, 2020
• Almost immediately, started working on reopening plans
• Agency guidelines developed in partnership with casino operators
• Each casino developed detailed individual plans including:
  • Capacity limits
  • Cleaning
  • Social distancing
  • Reduced slot machine/table game counts
  • Reduced hours
  • Staff & patron safety
• Reopening dates in late June 2020

What Does the Future Hold?

• Long-term lowering of expected casino contributions
• Lottery will continue to be strong
  • Advertising back to full strength with changes to media mix
  • Fast Play launch success
  • Strengths: Daily numbers; Instant tickets; Racetrax
  • Weaknesses: National jackpot games
• Potential growth areas:
  • Casinos: Sports betting
  • Lottery: iLottery

Q&A:

Delegate Eric Luedtke: Regarding iLottery. Have other states seen significant increases of online table games through the online avenue?

Gordon Medenica: Your question raises a really good point. We are not sure what the difference is between iLottery and iGaming. It’s really the payout level of the games themselves. I think the revenue potential is in the high payout games.

Delegate Edith Patterson: Has the industry assisted with any kind of program to assist employees during these times? For example rent, electric bill, or any kind of extra needs.

Gordon Medenica: There was great concern that that would become a problem. All casinos when they shut down kept everyone on the payroll for a limited amount of time. But eventually people started being furloughed. Even folks that were furloughed they allowed their medical benefits to continue for a period of time. One other concern was whether or not the employees would actually come back. An overwhelming amount of employees were willing to come back.

Delegate Eric Ebersole: iLottery more about buying lottery tickets and lottery games. iGaming is more like roulette wheels and craps games. Is that correct?

Gordon Medenica: Except that the demarcation is not a hard line.

Delegate Nick Mosby: Is it correct that where we are today from a lottery perspective is 20% net positive than where we were this time last year? Regarding the disparities report of sports wagering implementation, do we know if it still on track to be completed in October?

Gordon Medenica: That is correct. Yes, we are working very hard to make that October first deadline.

Matthew Heiskell, General Manager
Hollywood Casino Perryville

• On Friday, June 19^th, the first available date for reopening casinos in Maryland, Hollywood Perryville in Cecil County was thrilled to be one of the first to reopen in the state. Hollywood was able to open at 5:00 PM to the general public, and there was an initial wait to enter based on demand.
• Thermal cameras, slot machine count reductions to allow for social distancing, plexiglass barriers, enhanced cleaning schedules, and mask requirements are all parts of revised protocols that were approved by the Cecil County Health Department and the Maryland Lottery, and are now a part of our daily routine for operation.
• From mid-March to mid-June the property lost over $20 million in gaming revenue, about 27% of our typical annual revenues of approximately $75 million. Before that, in January and February, Hollywood had seen double digit percentage growth vs. 2019, suggesting that the gaming market in Northern Maryland was healthy before the pandemic.
• After reopening we currently offer 479 VLTs (60% of typical machine count), 10 out of 13 table games, both of our Greene Turtle restaurant offerings, and Off-Track Betting. The only offerings that remain offline for now are valet, the Rodeo Drive gift shop, and poker.
• Attendance is down almost 25% vs. pre-COVID levels as customers adjust to comfort in returning to the casino.
• Hollywood typically employs about 275 people, and currently sits at around 250. Though some employee rating with even 25 fewer employees given our typical number is difficult. 

Bobbie Sample, General Manager
Ocean Downs Casino, Worcester County

Employee & Guest Health

The health and safety of our employees and guests is our number one priority.

• Temperature Monitoring. Points of entry will be limited to one to allow our security team to conduct non- invasive temperature checks. When temperature is confirmed at 100.0°F or less, a daily color coded wristband will be given to signify that they have been checked. Anyone displaying a temperature over 100.0°F will be taken to a private area for a secondary temperature screening. Employees or guests confirmed to have a temperature over 100.0°F will not be allowed entry to the property and will be directed towards appropriate medical care.
• Physical Distancing. Maximum occupancy will be reduced to 50% of the current Fire Marshall maximum. Guests will be advised to practice physical distancing by standing at least six feet away from other groups of people not traveling with them while standing in lines and moving around the property. Restaurant tables, slot machines and other physical layouts will be arranged to ensure appropriate distancing. Employees will be reminded not to touch their faces and to practice physical distancing by standing at least six feet away from guests and other employees whenever possible.
• Hand Sanitizer. Hand sanitizer dispensers, touchless whenever possible, will be placed at key guest and employee entrances and contact areas such as the casino entrance, the casino floor, Cage, Player’s Club, table games and restaurant entrances.
• Front of the House Signage. There will be health and hygiene reminders throughout the property including the proper way to wear, handle and dispose of masks and gloves.
• Back of the House Signage. Signage will be posted throughout the property reminding employees of the proper way to wear, handle and dispose masks, use gloves, wash hands, sneeze and to avoid touching their faces.
• Employee & Guest Health Concerns. Our employees will be given clear instructions on how to respond swiftly and report all presumed cases of COVID-19 on property to the Worcester County Health Department. We will be ready to provide support to our guests. Employees are instructed to stay home if they do not feel well and are instructed to contact a manager if they notice a coworker or guest with a cough, shortness of breath, or other known symptoms of COVID-19. Employees and guests who are exhibiting any of the symptoms of COVID-19 while at the property are instructed to immediately notify their manager (employees) or security (guests).

Employee’s Responsibilities

• Hand Washing. Correct hygiene and frequent hand washing with soap is vital to help combat the spread of virus. All Ocean Downs employees have been instructed to wash their hands, or use sanitizer when a sink is not available, every 60 minutes (for 20-seconds) and after any of the following activities: using the restroom, sneezing, touching the face, blowing the nose, cleaning, sweeping, mopping, smoking, eating, drinking, entering and leaving the gaming floor, going on break and before or after starting a shift.
• COVID-19 Training. All employees will receive training on COVID-19 safety and sanitation protocols.
• Personal Protective Equipment (PPE). Appropriate PPE will be worn by all employees based on their role and responsibilities and in adherence to state or local regulations and guidance. Training on how to properly use and dispose of all PPE will be mandatory. Every employee entering the property will be provided a cloth mask and required to wear that mask while on property. Gloves will be provided to employees whose responsibilities require them as determined by medical experts including environmental services (EVS) and security in direct contact with guests.
• Daily Pre-Shift & Timekeeping. Employee pre-shift meetings will be conducted virtually or in areas that allow for appropriate physical distancing between employees. Employee arrival times are typically staggered to minimize traffic volume in back of house corridors and service elevators. Hand sanitizer will be available at each time clock location and employees will be required to sanitize their hands after clocking in. Our management team will ensure constant communication and proper PPE and sanitation procedures are followed and updated per the latest expert guidance. 

Guest Arrival

• A security officer will greet each visitor to the casino. Visitors will be screened and recommended to use hand sanitizer and to wear a mask. Appropriate signage will also be prominently displayed outlining proper mask usage and current physical distancing practices in use throughout the casino. Guests will enter the casino through doors that are either propped open, are automat d or have foot openers. Courtesy shuttle services will be suspended until further notice.

Cleaning Products and Protocols

• Public Spaces and Communal Areas. The frequency of cleaning and sanitizing has been increased in all public spaces with an emphasis on frequent contact surfaces including, but not limited to, security dispatch counter, door handles, public bathrooms, ATMs, ticket kiosks, marketing terminals, casino cage counters, gaming machines, gaming tables, dining surfaces and seating areas.
• Back of the House. The frequency of cleaning and sanitizing will also increase in high traffic back of house areas with an emphasis on the employee break areas, employee entrances, employee restrooms, offices, kitchens, security scanning podiums, employee access computers and conference room.
• Shared Equipment. Shared tools and equipment will be sanitized before, during and after each shift or anytime the equipment is transferred to a new employee. When applicable, plastic wrap will be used by team members when using shared keyboards and other equipment and disposed of directly after use. This includes phones, radios, computers and other communication devices, payment terminals, kitchen implements, maintenance tools, safety buttons, folios, cleaning equipment, keys, time clocks and all other direct contact items used throughout the casino.
• Air Filter and HVAC Cleaning. The frequency of air filter replacement and HVAC system cleaning has been increased and fresh air exchange will be maximized.

Locations for the Distribution of Personal Protection Equipment (PPE)

• Team members will be issued a number of cloth masks as part of their uniform from Human Resources or their Department Manager. A supply of disposable masks will be maintained by Security at the team member entrance in the event an employee does not have their cloth mask. Gloves will be available from the appropriate department shift offices as necessary for the job function.

Physical Distancing

• Queuing. Any area where guests or employees queue will be clearly marked for appropriate physical distancing. This includes Security dispatch, Cage, Player’s Club, Waves QSR, ticket kiosks, marketing terminals and ATM’s.
• Restaurants and Bars. Restaurants and bars will reduce seating capacities to allow for a minimum of six feet between each seated group/party of guests.
• Slot Operations. Slot machines will be placed out of service and/or reconfigured with the chairs removed to allow for physical separation between guests. Slot Supervisors and Managers will ensure that guests do not congregate around slots.
• Table Games Operations. Table games will have chairs removed. Table Games Supervisors and Managers will ensure that guests do not congregate in groups.
• Event Space. The Event Room will be closed until such time as large gatherings are allowed in the state of Maryland. When that occurs, meeting and banquet set-up arrangements will allow for physical distancing between guests in all meetings and events based on CDC and state recommendations. Self-serve buffet style food service will be suspended and replaced by alternative service styles.
• Back of the House. Physical distancing protocols will be used in the employee break rooms, conference room, shared office spaces, the employee services window other high-density areas in order to ensure appropriate distancing between employees.
• Operating Hours. Ocean Downs will limit operating hours to 8AM to 2AM daily. Deep cleaning will take place during closed hours. 

Joe Weinberg, Managing Partner and CEO
Cordish Gaming, Live! Casino & Hotel, Anne Arundel County

• Prior to the crisis we were seeing healthy increases in revenues. In 2019 we ended with just over $600 million in gross gaming revenue. That was an increase of over 25 million from the prior year.
• We were on par to see similar increases in 2020, but as a result of the current crisis we’re projecting gross gaming revenues this year to be just under $400 million.
• We were on par to contribute about $24 million to the local community through the local development council, however it will probably be closer to $15 million for this year based on current projections.
• We’ve seen a healthy return to business, still below last year but we are cautious to project anything based on that.
• In January of this year we opened our Live Hall, which is a 4,000 seat life music venue. We don’t see live entertainment recovering at all until there is a cure or a vaccine for the virus.
• We worked very closely with other properties to make sure we were bringing best practices to the reopening of our facilities.
• We spent in excess of seven figures in preparing our property for reopening. This includes thermal cameras, cleaning protocols, disinfectants, social distancing protocols.
• We’re operating at about 15% of our gaming positions.

 Skylar Dice, General Manager
Rocky Gap Casino Resort, Allegany County

• Rocky Gap Casino Resort closed its doors on March 16th, 2020 by orders of Governor Hogan because of the rapid spread of COVID-19
• During the week of March 16th we went from 467 team members at the resort to 27. This decision to lay off 94% of our staff was not taken lightly.
• Throughout the closure, we estimate that we lost over $21 million dollars in overall revenue and business volumes are still nowhere near where our original 2020 projections.
• The Local Economic Development grant is 100% funded through Rocky Gap Casino slot revenue and helps offset the costs of over 20 critical volunteer fire departments, a local scholarship fund and a pool of grant money for economic redevelopment in the area.
• We were fortunate to house 50-70 members of the Maryland National Guard during the COVID shutdown to help provide support for their activation on the Western side of the State. This allowed us to bring back a handful of key team members in late April and provided a good template for how to operate the property once we were allowed to re-open.
• We have installed over 100 additional hand sanitizer stations and hand-wipe stations throughout the property and increased the presence of our cleaning staff in high touch areas throughout the resort. We installed a thermal camera at our front door to ensure that we are monitoring the temperatures of all guests coming in the resort, and have separated the entrance and exits to limit the flow in and out of the resort. We have installed plexi-glass barriers in between many of our slot machines, and in the areas that we were not able to put the barriers or provide adequate social distancing the machines were taken out of service.
• We made the decision to close the casino down for 4 hours each night, aside from Friday and Saturday night, to provide a thorough deep clean of the casino. We have worked with both the Maryland Lottery and the Allegany County Health Department on our health and sanitation guidelines for the property.
• While the hotel remains busy on the weekends, we are nowhere near capacity in a month in which we have historically averaged in the mid 90% range for occupancy.
• Over 50% of our database comes outside of the State of Maryland and with competing casinos allowed to open earlier in West Virginia and Pennsylvania we find ourselves playing catch-up to regain our market share.
• Staffing continues to be a challenge for the resort. In a typical year we would have roughly 550 team members at this point in the summer and we are running the operation at only 74% of that number.
• We made the decision not to re-open our buffet, kept down our outdoor bar, have kept the casino at or below the 50% occupancy level required and have not yet re-opened the Spa because of the difficulty of providing that service in the time of COVID.

Randy Conroy, General Manager and Senior Vice President
Horseshoe Casino Baltimore, Baltimore City

• We opened on June 26^th.
• We have 1,000 slot machines open out of 2,100.
• 50% of our table games positions open.
• Only takeout food service is available, no bars are open.
• Face coverings and temperature checks at the door are required for employees and guests.
• We have enhanced cleaning and disinfecting procedures throughout the casino.
• We’ve brought back 60% of our team.
• I’ve been working on our collaboration with the Baltimore City Health Department.
• Big concern is testing delays, We continue to look for who can get us test results back quickest.
• We strongly encourage any employee not feeling well to get a test that we will facilitate and pay for.

Jorge Perez, Regional Chief Operating Officer
MGM Resorts and President, MGM National Harbor, Prince George’s County

• 96% of MGM National Harbor’s roughly 3,400 employees were furloughed. As a corporation, MGM Resorts International voluntarily provided 2 weeks of pay and full healthcare benefits to its more than 70,000 furloughed employees through the month of August.
• On Friday, June 26^th, MGM National Harbor opened to select, invited guests followed by an opening to the general public on June 29^th. Since MGM National Harbor has slowly increased operations, we have returned nearly 2/3 of its employees.
• MGM Resorts International hired the Colden Corporation, an occupational health, safety and environmental firm, to provide direction on how to reopen its nationwide resorts and casinos following the most effective safety protocols available.

Our seven- point safety plan provides a clear foundation upon which we tailor our operations at each property we operate.

• Mandatory screening, temperature checks and employee training – Employees are screened upon entering the property and guests are screened prior to entering the casino.
• Mandatory masks and personal protective equipment – mandatory for employees and guests.
  • Physical distancing and plexiglass barriers throughout the resort.
  • Hand washing and enhanced sanitation – Employees and guests are encouraged to regularly wash their hands and new hand washing stations have been installed on the casino floor.
• HVAC controls and air quality – MGM National Harbor is equipped with a state-of-the-art HVAC system that provides the property with 100% fresh air exchange 12 times per hour, which is comparable to a hospital facility. Additionally, high efficiency, HEPA filters throughout property allow the system to filter small contaminants to provide a high indoor air quality for employees and guests.
• Incident response protocols – We have many protocols in place that are aimed at reducing the chance of infection throughout the property. This includes new room cleaning procedures and contact tracing should an employee or guest come into contact with an individual who has tested positive for the virus.
• A significant investment in digital innovations – The use of innovative technologies includes contactless check-in and contactless order and payment at our food and beverage outlets to minimize face to face contact between employees and guests.
• MGM National Harbor is currently generating gaming revenues at 70% – 80% of prior year’s levels and believe we’re benefiting from pent up demand and the lack of entertainment options in the region. Our casino admissions are down 40% with most of the deficit coming from weekends where we typically program large-scale gaming events, tournaments, and host entertainment headliners, none of which will be possible for months to come.

Q&A:

Delegate Nick Mosby: Did every employee have to test negative for COVID to return?

Randy Conroy: We had a health screen questionnaire at the Horseshoe. Before team members were allowed on property they had to do the online questionnaire, which was 5 questions. If any of the answers triggered the need for a test we had a nurse in our garage schedule a test they would come and stay in their car and get a test done. Every day when someone comes through the door not only do they get temperature stand they have to pass the health questionnaire.

Delegate Nick Mosby: Was this a mandate from the State or did Horseshoe do it on their own?

Randy Conroy: I think that was specific to Horseshoe But I think all of my colleagues have something similar.

Delegate Anne Kaiser: Did anyone do it dramatically different?

Jorge Perez: For MGM National Harbor it was not mandatory. We tried to make it as convenient as we could for our employees. Adjacent to our property we provided free tests which were highly encouraged but not mandatory.

Delegate Nick Mosby: Have any casino employee tested positive for COVID? If so how many?

Bobbie Sample: At Ocean Downs we have not had any positive tests of any employee that has been on property.

Randy Conroy: At the Horseshoe we had one person test positive about 3 weeks before we opened. We’re tracking other possibilities right now, but so far the instances have been extremely low.

Matthew Heiskell: At Hollywood we have had a couple of cases.

Skylar Dice: We have had one but not casino related at Rocky Gap.

Jorge Perez: MGM National Harbor has had several.

Joe Weinberg: We have a had a couple at Live.

To discuss what these updates mean for your business, contact us directly, or give us a call at (410) 337-0500.