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Hard conversations have already begun at Encore Boston Harbor this week, as the casino begins the process of shedding between 670 and 1,000 jobs in response to Gov. Charlie Baker’s new order to shut down bars, restaurants and casinos – among others – by 9:30 p.m. each night.
Gov. Baker issued new guidelines last week that called for many businesses, including casinos, to close by 9:30 p.m. to accommodate a new COVID-19 curfew put in place from 10 p.m. to 5 a.m.
The casino had just begun to get its feet under itself and had a tremendously profitable 3rd Quarter revealed in an earnings call on Thursday afternoon (see related story elsewhere). Wynn Resorts CEO Matt Maddox said on that call he doesn’t see that the shutdown will be a devastating hit to the company, calling it “short term,” but indicated the loss of revenue would be made up by furloughing full time workers.
“Clearly it will have an impact,” Maddox told investors. “More than half of our revenue is generated at night. So, closing at 9:30 is going to have quite an impact. We are going to have a much lower operating expense so we’re going to likely see our full-time equivalent count go down between 670 and 1,000 as we get through this. I do think we’ll continue to be EBITDA (earnings before interest, taxes, depreciation, and amortization) positive, but it’s unclear how much. We want to stay above zero during this closure because almost half of our revenue generating time will be closed. I think the time we’ll open will be offset by expenses.”
While that was a tough reality, the long-term outlook of the closure for the company is positive, meaning they believe they will be able to welcome those employees back when COVID-19 cases get under control and the phased re-opening plan in Massachusetts resumes forward motion.
“That’s clearly a setback for us, but it’s clearly temporary,” he assured. “I’m sure it’s the right thing to do from a health perspective and (Gov. Baker) has done a terrific job of managing this…So we view it as a temporary setback but it’s really nothing we’re worried about because our business model is sound and I think we’re going to continue to see increases in revenue and increases in EBITDA in the future at Encore Boston Harbor.”
While the long-term seemed sound, the short-term is job loss for residents of Everett and the surrounding area. That reality came to pass this week as local casino officials said they had begun speaking with employees about layoffs. Many have already been informed of the layoff, and have stopped reporting to work.
Locally, the Everett License Board has been struggling with the enforcement of the earlier 11 p.m. closure, as well as keeping bars and restaurants compliant with COVID-19 regulations.
Chair Phil Antonelli said the recent announcement will likely put a lot of pressure on establishments, many in Everett that were already on the edge of success and failure. He cautioned that they will have to continue to enforce the regulations as they have been even in this difficult business environment.
“This was the governor’s call,” he said. “This wasn’t the mayor or the local government. If he did this, he clearly did it with the advice of state doctors and health experts. The hard part is if these bars and restaurants don’t adhere to it, the state COVID Enforcement team and the local police enforcement will be there. We’ll just have to take it case by case if that happens.”
Councilor Stephanie Martins said it feels like those paying the price are the immigrant businesses struggling to stay afloat. She said communication has been good, but she’s calling for a second look at the 9:30 p.m. closing time.
“I’m very disappointed in one respect because it’s a matter of personal responsibility for each individual and not being careful in a business can shut down that business,” she said. “It hurts the business and they pay for it and it will be the nail in the coffin for many. While we have to do something, I don’t think closing at 9:30 p.m. is the solution because people still will gather in other ways. It seems it’s the businesses that end up having to pay for this.”
Councilor Michael McLaughlin said he felt it was unjustified to make places close at 9:30 p.m. and to ham-string the casino and cost hundreds of jobs. He called on Gov. Baker to come take a walk-thru of the casino to witness the safety measures.
“After closing from Mid-March to Early-July Wynn Resorts rose to the unimaginable times and continued to pay all employees including tips,” he said. “Once Encore was able to re-open they redirected countless resources to ensure they could keep employees and visitors safe and comfortable. They have not contributed to any of the increased COVID-19 cases in our area. Rather than stepping backwards, we need to be supporting and protecting the 1,000 employees that will be facing a second furlough leading into the winter months. In my opinion this is a very unjustifiable action.”
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