On May 15, 2020, the Mississippi Gaming Commission issued its Order Authorizing Reopening (authorizing the reopening of Mississippi casino properties at 8:00 a.m., on Thursday, May 21, 2020) under the limitations described in Industry Letter 2020-01.
Please click here to review Industry Letter 2020-01 from the Mississippi Gaming Commission.
Please click here to review the Reopening Order from the Mississippi Gaming Commission.
Even though the casinos in Louisiana and Mississippi continue to be closed under orders from the states’ governors and gaming regulators to address the coronavirus pandemic, we can speculate what a reopened gaming industry might look like in the Deep South once those orders are lifted.
Prior to entry into a casino, guests may be asked questions about their recent travel or health or exposure to someone with the virus. Patrons may have to walk through a device to check for elevated temperatures before being admitted. Social distancing will become the norm, and casino floors may be marked to indicate minimum distancing for patrons at locations such as hotel check-ins.
Even after casinos are reopened, players who have been conditioned to avoid crowds of any size may be reluctant to return to gaming properties. As a result, we expect the gaming floors to be uncrowded, and most if not all the guests and certainly all the staff will be wearing masks, and perhaps many will be wearing medical gloves; it will be interesting to see how surveillance departments adjust to the new normal of not being able to see faces of patrons and employees.
Dealers whose faces will now be covered with masks will have to struggle to engage in friendly interaction with their players — who are also likely wearing masks. Miscommunication will increase. Every third seat at a table game may be occupied — more tables than normal might be open, but with fewer players at each table. Card decks will be changed out more frequently, and chips may be subject to cleaning and disinfecting. The same will be true at non-card games. Poker rooms will be closed. Electronic table games will be more prevalent. Non-players will not be permitted to gather around tables, even on a Saturday night.
Two of every three gaming devices will be rendered operable in order to establish the necessary social distance between players. A guest cashing out of a device and leaving his seat will result in a member of the housekeeping crew swooping in to sanitize the device and the chair in front of the machine.
Sports books in Mississippi will be on skeleton crew until the return of sports. And who knows when that will happen?
Employees will be screened for symptoms of the virus at each shift change; any sign of illness will result in the employee being sent home immediately or, if the capability exists, testing for the virus on-site or at a local clinic. Casino cleaning staffs will be robust, very visible, and active, as it will be necessary to employ enhanced cleaning techniques to keep the restrooms, door handles, handrails, and other areas as clean and fresh as possible.
Buffets will be closed, and food service will be limited to menu orders. Only half the tables in the dining venues will be open for service, and not all restaurants will be open. Beverage service to players may be limited to reduce human contact and potential spread of the virus.
Hotel rooms will be plentiful and cheap. Casino guests will be more of the “day trip” variety rather than those staying overnight, as guests will be reluctant to sleep in hotel rooms that they have not personally watched being cleaned and fear whether the previous night’s guest might have left the virus behind.
Because of the outbreak, annual festivals in New Orleans that draw large crowds, such as Jazz Fest, have been canceled this year, and others that already have been postponed to later in the year also may be canceled. In light of the foregoing, live entertainment at casinos that typically attract large crowds may be nonexistent or, at a minimum, will be regulated not only as it relates to the total number of individuals allowed but with queue lines and seating spacing consistent with social distancing protocols.
Spas, pools, convention centers, and bars will not be open until much later in the year. Once casinos are reopened for business, there will be gaming, but it just won’t be the same for a long time.
The minutes for the Mississippi Gaming Commission’s meeting held on April 16, 2020, can be reviewed by clicking here.
The Mississippi Gaming Commission has released the agenda for the April meeting to be held on April 16, 2020. Please click here for the agenda.
With nearly all (980 of 989) commercial and tribal casinos in the United States closed, affecting more than 650,000 directly employed persons during the novel coronavirus shutdown, there are specific sets of issues facing the gaming industry. We summarize some of the more important ones below.
Employee Issues
Many gaming industry employers have taken one of several general tracks with respect to their employees. Some have elected to pay their employees for a defined period of time, regardless of whether they are presently able to perform their jobs or not. Others have issued blanket temporary furloughs to employees or terminated the employees, hoping to rehire those employees when conditions improve in the future. The federal legislation will provide benefits to employees and/or their employers, depending on the choice of how to proceed and what path to take under the possible scenarios. Culture of the companies also impacts decisions on these points; some company executives are deferring cash salaries for stock to improve company cash positions and keep more employees on the payroll, while others are taking reduced salaries or working for free, while still others are taking a salary but donating it to an employee fund. Benefits available to employers and employees under pending federal legislation may significantly impact the decisions employers make with respect to their employees.
Credit Facility and Lease or Other Contractual Issues
Most companies in the gaming industry have credit facilities that include financial or operational covenants that are either immediately triggering events of default (unless cured) or will trigger such events in the near term. Major leases likely include provisions that should be reviewed in light of the shutdowns due to the coronavirus crisis. Accordingly, such companies should be discussing with their lenders or landlords appropriate covenant amendments or waivers and deferral of interest and principal payments. Also, borrowers need to be careful not to amend one credit facility or obtain a waiver in a way that triggers a problem or a default under another debt agreement or lease.
Of particular concern to members of the gaming industry is whether such credit facility amendments or other new financing arrangements require approvals, particularly prior approvals, with respect to such amendments and financings or whether any additional regulatory filings are necessary. If prior approvals are necessary, consideration must be given to the timing of meetings of regulatory bodies, especially in light of reduced schedules and staffing or closures of regulatory agencies, or the cancellation of scheduled commission meetings during the coronavirus outbreak.
While it is likely that current credit facilities and contracts do not have force majeure clauses that will excuse performance by gaming companies, the current COVID-19 pandemic certainly suggests that consideration should be given to those seeking to include such clauses in future agreements, particularly where such outbreaks result in a company’s business being shut down by a governmental authority.
Business Interruption Insurance Claims
Gaming companies should carefully review their insurance policies for the possibility of making claims for business interruption losses. Possible claims depend significantly on the specific policy language, including endorsements to the main policy, and often require an analysis of the language in multiple policies providing different layers of coverage. Possible claims also depend on the case law in the specific jurisdiction where the casino is located. Several lawsuits are pending around the country with respect to these issues. Timing and other requirements for making claims under the policies should receive careful attention.
Licensing Conditions
Some jurisdictions, particularly those limited license jurisdictions, legalized gaming for specific economic development reasons, including employment. Some licenses are issued with specific requirements, either by statute or regulation or stated license conditions, regarding employment of citizens and/or minimum purchases from suppliers or vendors within the state. With the casino shutdown, a review of those mandatory economic development requirements and a proactive approach with regulators may be prudent.
The attorneys on the Jones Walker LLP Gaming Industry Team stand ready to assist our clients with these and other issues brought about by the coronavirus crisis.
