Delaware Park Revival
Delaware Park reopened the First State’s most strategically located racino to brisk business under restrictive conditions, with a plan that took care of employees while avoiding additional debt. Delaware Park President William Fasy (l.) explains how.
Delaware’s racinos were back in business as of June 1, at 30 percent floor capacity. The early news was good, with brisk business despite the fact that active slot machines, by order of the state, must be 8 feet apart. The reopening went smoothly by all accounts, thanks to plans that were in place long before any of the three racinos knew exactly when a return to business would occur.
In March, at the very start of the forced 10-week hiatus for Delaware racinos, the owners of the Casino at Delaware Park were planning for the industry’s reopening. In fact, the reopening plan for Delaware Park began even before Governor John Carney ordered the closure of all casinos due to the Covid-19 pandemic.
“We talked to the governor before he even announced that we were going to close,” recalled Delaware Park President William Fasy in an interview with GGB News. “We said, ‘We’re prepared for this. We just want to make sure we understand what you’re going to do.’”
By the time the closure order came for March 16, Delaware Park’s preparation was evident, in a plan to help employees survive an extended shutdown while preserving liquidity and avoiding debt.
“We paid all the employees an extra two weeks of pay, including tips,” Fasy said. “Employees who depended on tips got what they normally would get for the first two weeks, over and above their regular benefits. And then the third week, we made it a choice—you can take some paid time off, be it personal or vacation time, that you have built and accrued.”
During the third week, officials decided to allow employees who had used their paid time off to accrue additional time off more quickly than normal upon return. “By our calculation, that got us to the third week of May,” Fasy said. “And we opened up June 1. So, really, it was a short period of time where they wouldn’t have gotten paid, (but got) unemployment.”
Delaware Park’s plan allowed the property to avoid having to borrow money to maintain liquidity. As the June 1 reopening approached, the casino made one more safety-related decision: “We made everybody, including the slot vendors and the state employees that work to regulate us on the floor, take a Covid test, on us,” Fasy said. “And we turned it around in two days. We had two positives, out of over 600 people.”
It wasn’t cheap—around $100 per employee for the Covid-19 test. With more than $60,000 already spent, the property was preparing to test another 400 people for next phase of Delaware’s reopening. Fasy says it’s a necessity, since Delaware Park is the closest of the state’s racinos to metropolitan centers including Wilmington, Philadelphia and north, and is very close to Interstate-95. “We’re too close to the high demographics to have somebody coming back to work who gets sick,” he said. “We arranged with our pharmaceutical consultant, and it was very smooth.”
To preserve liquidity, one of the first moves by Delaware Park as the shutdown began was to contact vendors on long-term contracts with continuous fees, including participation fees on leased slot machines and satellite fees charged to simulcast races. For the most part, Fasy said, suppliers agreed to waive fees during the shutdown.
“That was one of the very first things we did when we closed,” Fasy said. “We went out and asked a lot of people who have subscription revenue from us, whether that be on computer systems and maintenance, or satellites—items like insurance, where you don’t really have risk (with casinos idle)—and asked them to add the idle time to the end of the contract, so they would still get what we committed to. There were very few that did not want to do this for us.”
Fasy commented that moves like this at the start of the Covid-19 shutdown will go far to preserve the long-term health of the property.
“In our industry, it’s tough if you have a lot of debt right now,” he said. “I’m sure organizations that don’t have the reach to bail (themselves) out are having trouble with their debt service and their covenants with the bank. I’m sure there are going to be some casino companies that get acquired because they can’t handle the situation.”
The opening itself went smoothly, and according to Fasy, the first week back to business was “very strong,” with virtually all available gaming positions occupied from mid-afternoon on each day.
It was the best that could be expected given Delaware’s reopening restrictions, which are stiffer than those in many other jurisdictions. Instead of slot positions being required to allow for 6 feet between active machines as in Nevada and other recently reopened markets, in Delaware, active machines must allow for 8 feet of social distancing in Phase 1 of Delaware’s reopening order. (Fasy says the state applied restaurant guidelines requiring 8 feet between tables to slot machines in the first phase.)
Social distancing of 6 feet is required across the rest of the property, aided by markers adhered to the floor. Phase 2, which began this week, will reduce the distancing between slot machines to 6 feet.
The 8-foot restriction means that as Phase 2 begins, only 700 of Delaware Park’s 2,200 slots are active. Machines between the active games are disabled, the stools removed and stored temporarily in the property’s poker room, which is likely to be the last gaming area to reopen.
State guidelines require that individual gaming machines must be disinfected every 15 minutes to two hours. That means everyone in the slot department is also a slot cleaner for the time being—right up to Terry Smith, the vice president of slot operations, who was busy disinfecting slot machines as GGB News toured the casino last week.
All patrons must stop at a thermal camera at property entrances to gauge temperature, with anyone gauging 100.4 degrees or more denied entry. Additional precautions include an ionic air purifier installed in the HVAC system and a system to sanitize all cash going into the machines with UV lighting. Plexiglas barriers are in place at casino cashier areas, player’s clubs and host stands.
Barring unforeseen Covid-19 spikes, Phase 2 will see the return of table games to Delaware casinos. As in other jurisdictions, seating at tables will be limited to effect the 6-foot social distancing requirement. Additionally, all players and dealers will be required to wear not only masks, but acrylic face shields supplied by the casino.
Live racing also will return with Phase 2. Currently, only simulcasting areas in the racetrack are open, with the 30 percent occupancy requirement. According to Fasy, harness racing is slated to return June 17, with no spectators—a requirement he says could be eased in the near future.
Fasy predicts some of the safety precautions are likely to be in place for the long term. “It’s going to be the new normal,” he said. “You’re definitely going to see the Plexiglas at the cashier locations and other locations for some time. We’re going to purchase some acrylic dividers for slot machines, so people can have their own slot machine area. We’ll use them where all the machines are up against the wall.”
For now, Fasy said the most challenging aspect of restricted operations has been to make sure customers are wearing their masks, with some customers keeping them below their noses or taking them off to drink their beverages. However, what is not challenging is getting them to play.
Customer feedback has been positive, even with the severely restricted slot count. “We’re happy with the game mix,” Fasy said. “There’s a little bit of everything.” The available machines are usually fully utilized, no doubt helped along initially by the fact that of three states adjacent to Delaware, only Pennsylvania has reopened casinos, beginning in the past week. New Jersey and Maryland casinos still await authorization to reopen.
Meanwhile, Fasy says morale among the Delaware Park workforce is high. “The employees have been fantastic,” he said. “There were no complaints (regarding the testing). They seem energetic. In talking about Phase 2 and getting the table-game people back, the feedback from my staff is that they’re excited.”
As of last week, nearly half of Delaware Park’s employees were back at work, with full staffing not predicted until sometime after July 1. In Phase 2, casinos will be permitted to double their capacity to 60 percent of their fire occupancy requirements.
In the meantime, business, such as it is, is booming.
“There’s pent-up demand,” Fasy said. “People want to get out of their houses.”