Some of America’s smallest gaming operators now qualify for the federal government’s pandemic bailout but the US casino lobby says the offer doesn’t go nearly far enough.
On Tuesday, the federal Small Business Administration (SBA) issued revised guidelines for the Paycheck Protection Program (PPP), which offers small businesses loans of up to $10m, which are forgivable if at least three-quarters of the cash is used to pay staff who would otherwise be affected by COVID-19 shutdowns.
Traditional SBA guidelines prohibit offering Economic Injury Disaster Loans to any business that derives “more than one-third of gross annual revenue from legal gambling activities.” The new guidelines allow a business to have up to one-half of its total revenue from gaming provided that gaming revenue didn’t exceed $1m in 2019.
The SBA believes the revised standard “appropriately balances the longstanding policy reasons for limiting lending to businesses primarily and substantially engaged in gaming activity with the policy aim of making the PPP Loan available to a broad segment of U.S. businesses and their employees.”
But only a business like a bar with a few lonely slots or video poker machines hidden away near the washrooms would fall within those limits. Treasury Secretary Steve Mnuchin made that plain at a press conference on Monday when he mentioned “small taverns and restaurants” as the focus of the change, adding: “I want to be clear: it’s not small casinos.”
American Gaming Association (AGA) CEO Bill Miller issued a statement saying that while the revised rules “represent some progress, they fall woefully short of fully addressing antiquated, discriminatory policies that have, to date, restricted small gaming companies from accessing critical loan support.”
Miller warned that the SBA’s “half-measure” would mean that “small gaming businesses that have closed to comply with government orders will continue to be denied access to this critical lifeline to support their employees.”
Miller said the AGA would continue to work with “a significant group of bipartisan, bicameral members of Congress” seeking help for both commercial and tribal gaming operators and “rejecting the SBA’s dangerous view that gaming employees don’t deserve assistance during this unprecedented crisis.”
The AGA, along with politicians from some casino-friendly states, had lobbied President Donald Trump about including small casinos with under 500 employees in the federal bailout program. Trump, himself a (failed) casino operator, initially seemed receptive, but a squirrel apparently ran by the window and distracted him.
It’s unclear if even of the small gaming operators that now qualify for loan assistance will actually receive anything under the PPP’s current budget, given that the SBA announced Tuesday morning that it had already approved issuing over $247b – around 70% of the total sum available – to over 1m applicants.
