US gaming lobby pleads with feds to allow loans to small casinos
AGA fights for small casinos' access to federal bailouts
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America’s casino lobby says its smaller gaming operators deserve access to federal funding aimed at mitigating the fallout of suspended business related to the COVID-19 pandemic.
Last Friday, American Gaming Association CEO Bill Miller issued a statement challenging guidelines issued by the Small Business Administration (SBA) regarding the federal government’s Paycheck Protection Program (PPP). Specifically, Miller took issue with the SBA’s view that “small gaming entities and their employees” are ineligible to receive PPP benefits.
Miller said the AGA was “deeply concerned” by the SBA’s decision to stick with its standard prohibition on issuing Economic Injury Disaster Loans to any entity “deriving more than one-third of gross annual revenue from legal gambling activities.”
The AGA notes that the federal bailout specifically states that any business concern shall be eligible for an SBA loan if it meets specific qualifications regarding its number of employees. The AGA warns that unless the SBA’s guidelines are amended, “one-third of the US casino industry” and hundreds of thousands of casino staff and associated businesses will suffer irreparable harm.
The AGA noted that only two of the nation’s 989 commercial and tribal casinos had yet to shut their doors in response to the pandemic. Given the significant tax contributions these casinos make to their states and local communities, “the inclusion of gaming businesses in the PPP is critical” to ensuring the industry can survive until the pandemic subsides.
The gaming industry’s fight for inclusion in government bailouts isn’t limited to US shores. The UK originally denied its betting shops and casinos access to the business rates relief offered to other ‘hospitality’ businesses but eventually relented.
MARYLAND CASINOS HAVE A MARCH TO FORGET
The impact of the US industry shutdown was on full display in recent numbers from Maryland’s casino market. Maryland Lottery & Gaming said the state’s six casino operators generated revenue of just $68.6m in March, nearly 58% less than March 2019’s record-setting figure due to the governor ordering all casinos to close their doors on March 16.
As usual, Caesars Entertainment’s Horseshoe Casino Baltimore took the biggest hit, falling 61.2% year-on-year to just $9.9m, while market-leader MGM National Harbor was down 58.6% to $26m and Live! Casino & Hotel slipped 55.6% to $24.8m. The state’s three smaller venues were all down nearly 60% year-on-year.
The state’s share of March’s casino gaming revenue came to $28.3m, of which $21.2m will go toward the state’s education fund. The state earned $67.4m from its six casinos in March 2019 and $62.9m in February 2020.
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