Feature: US Congress Cares
Relief now, recovery...when? The American casino industry copes with the X factor that is Covid-19 by David McKee
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eeling numbers on a slot machine are a staple of casinos. But in mid-March of this year, it was casino-revenue numbers that were reeling from the Coronavirus pandemic, as state after state shut down its casinos, climaxing with Nevada Gov. Steve Sisolak’s mandatoryclosure order on March 17. “It’s been devastating. All of the casinos in the country are shut down, 652,000 employees are unable to go to work”, said an industry lobbyist. “That’s in addition to upwards of 20,000 Americans who work at gaming supply and manufacturing companies who are impacted by this, 250,000 small-business workers whose companies rely upon gaming for their livelihood. So you’re talking about upwards of a million people whose jobs are immediately impacted and ultimately if casinos are closed until MidMay, it’s a $40 billion or $50 billion loss of activity to the American economy.” He continued, “People in Las Vegas appreciate this more than most but where people tend to not understand our business much, there’s some sort of legal gaming happening in 43 states and that’s up to 48 if you include lottery. But we are in communities all across this country, supporting local nonprofits, hiring local.” That same day that Sisolak’s order came down, a story in the Washington Post disclosed that casino companies had huddled with the American Gaming Association and its members had come up with a four-point wish list for Congress. They desired 1) direct cash payments, 2) tax deferments, an idea the AGA had already been promoting, 3) special bankruptcy protections and 4) zero-interest or low-interest loans. Initially it was feared that, given cheap access to capital, companies that had been laying off employees en masse would use the ready money to buy back stock on the cheap or divert it into executive bonuses. As written, the CARES Act precludes that and some companies have already publicly sworn off stock buybacks. MGM Resorts International was ahead of the curve when then-CEO Jim Murren nixed a scheduled, $1.25 billion share repurchase even before the worst of the crisis hit, a move that got Murren fired, it would Volume 16: Issue 139
Casey Clark, Senior Vice President Strategic Communications, American Gaming Association
appear. While some companies have laid off employees by the thousands, others are staying the course. In the time of Covid-19, Sheldon Adelson has emerged as the conscience of the industry. His Las Vegas Sands vowed not to lay off or furlough any of its approximately 10,000 employees and to extend pay and benefits for a month—a deadline extended by a fortnight when Sisolak added two weeks to his quarantine mandate. In a letter to the New York Post, Adelson wrote, “To my fellow corporate executives who are looking at spreadsheets and trying to determine the impact this crisis will have on sales and share prices, let me say our job as business leaders is now as simple as it is challenging. It is to maximize the number of employees and their families that we can help–and help them for as long as possible.” By the end of the month, with families of geese promenading up the middle of the Las Vegas Strip and coyotes roaming the streets of San Francisco, Congress passed the CARES Act (Coronavirus Aid, Relief, and Economic Security Act). Gaming got most of what it wanted...but not everything and the devil would be in some of the details. Still, it was a vast improvement on past legislation like the American Recovery & Reinvestment Act of 2009, which had left the casino industry out in the cold. 31
