After being ignored by the Small Business Administration over concerns that small gaming companies were precluded from sharing in $349 billion in forgivable Paycheck Protection Program loans, the American Gaming Association Wednesday took the matter up the chain to the White House.
In a letter to President Donald Trump, AGA CEO Bill Miller said the interim regulatory guidelines issued last week by the SBA to help small companies recover from shutdowns due to the COVID-19 coronavirus pandemic, “discriminates against these mainstream businesses and, more importantly, the hundreds of thousands of employees who rely on gaming for their livelihood.”
The Washington D.C. based trade organization enlisted the help of 14 bipartisan members of Congress from both commercial and tribal gaming states who wrote letters of concern to Trump and SBA Administrator Jovita Carranza.
During the White House press briefing Wednesday updating the coronavirus pandemic, Las Vegas Review-Journal White House reporter Debra Saunders asked Trump about the AGA’s letter.
“We’ll take a look at that. (Nevada is) a great state. We’ll take a look very strongly,” Trump said.
Miller, in a letter last week to Carranza, said the guidelines left out the 350,000 small local business jobs that service the nation’s casino industry. Nearly 1,000 commercial and tribal casinos in 43 states have been shut down by the coronavirus pandemic. It is unclear how long the closures will last.
The program, established under the $2.2 trillion Coronavirus Aid, Review, and Economic Security Act (CARES Act) does not pertain to companies that generate more than one-third of their revenue from gaming, which would disqualify their applications for the forgivable loans.
“Specifically, these interim rules rely on antiquated, discriminatory policy that renders small gaming entities ineligible to receive critical loan assistance designed to help small businesses pay their employees,” Miller wrote in the letter to Trump, who is a former Atlantic City casino owner.
Miller told the President that members of Congress from both parties had expressed their concerns with the guidelines in phone calls to the SBA over the past week.
“The enclosed letters underscore the clear intent behind the legislation to help more, not fewer businesses during their time of need,” Miller said. “The regional diversity of these members also underscores the impact SBA’s unjustified decision will have on gaming workers and businesses in numerous states across the country.”
Nevada’s six-person congressional delegation, collectively and individually, asked the SBA to change the guidelines. In a statement from Democratic Senator Jacky Rosen’s office, the delegation stated that in Nevada, “many of our communities rely substantially on the gaming industry for employment, tax revenue, and economic growth.
“This bipartisan issue deeply affects Nevada and many states throughout the country that depend on the revenue and jobs created by the gaming industry,” the joint statement read. “Given these dire and unprecedented times due to the coronavirus outbreak, we ask that you provide much-needed relief for Nevada small gaming businesses as soon as possible.”
Representative Dina Titus, D-Nev., whose district includes the Las Vegas Strip, said in a letter to Carranza that small businesses “are the backbone” of the travel and tourism industry.
“Unfortunately, the COVID-19 pandemic has decimated their operations and forced them to close their doors,” wrote Titus, who is also the co-Chair of the Congressional Gaming Caucus. “Many of these small businesses already operate leanly, with tight profit margins and just enough people on staff to keep things running. Like any other small business, small gaming and betting establishments are in desperate need of assistance in order to rebound from this crisis.”
South Dakota Republican Senator Mike Rounds, in a letter to Carranza and Treasury Secretary Steve Mnuchin, said the small casino market in Deadwood, provides more than 1,200 jobs while the state’s tribal gaming businesses provide several hundred jobs.
“Leaving these types of small businesses out of important federal recovery efforts would prove crippling to South Dakota,” Rounds wrote.
He said the Paycheck Protection Program was “a totally new program that is separate and distinct” from previous SBA policy relating to Economic Injury Disaster Loans.
“Given the expansive nature of the PPP and the intent for every small business that wanted it to received PPP assistance, it would make no sense to apply the one-third annual revenue from gambling threshold to small businesses,” Round said.
According to the AGA, more than half of the 1.8 million jobs gaming supports are at non-gaming businesses, such as restaurants and local shops, all of which are dramatically affected by a local casino’s closure.
The trade organization said that, in many states, gaming pays among the highest tax rates of any industry, with “$10.7 billion in gaming taxes and tribal revenue share payments that support fundamental and critical programs from infrastructure to education.”
Miller told Trump the gaming industry “is among the sectors most severely impacted by the COVID-19 outbreak, in large part, due to mandated closure of facilities, which has jeopardized the livelihoods of the 1.8 million Americans.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.