Unquenched Optimism

to be quite damaging for industry in general but specifically our industry, the other thing that people have come to recognize is they really want to get out and have something that works like normal. It may well be a different ‘normal.’ The precursor to getting out and having fun is ‘Is this safe?’ As we continue to vaccinate over a million and a half people per day in this country—the first thing I look at every day is what’s the seven-day average in terms of deaths, reported cases and hospitalizations—and now I’m tracking the number of people that are being vaccinated. For our industry, an industry that is a fun and entertainment outlet, and a return to normal life, it is important. Saving rates are historically high for Americans during this time. They’ve been paying their bills down. As the economy opens up and travel continues to become less worrisome for the American public, our industry is poised for a real exciting rebound.

Brick-and-mortar revenues have been mixed but sports betting and i-gaming are way up and continuing to rise. Are we seeing a shift in how we spend our gaming dollars or is this a temporary phenomenon?

It’s difficult to make a comparison. Brick-and-mortar were shut down by governmental leaders in the past year, and sports betting has only recently been legal—since May of 2018—anywhere but Nevada. We continue to see strong uptick by a number of states: 25 states plus the District of Columbia, in terms of those that actually have sports betting. That increase was going to happen whether brick-andmortar casinos were necessarily closed or not, simply because in the entire country with the exception of Nevada nobody could bet legally on sports. So that increase is one that we will continue to see as brickand-mortar continues to reopen. In terms of i-gaming, it’s only in a reasonably small number of states but the pandemic would have been far more devastating to the industry had we not had mobility and the ability to access gaming offerings in your own home. The experiences are completely different, right? I do not think they are a zero-sum dynamic. You’re seeing almost all the operators across the country begin to have an online component and it’s because they recognize a need to offset the illegal market, which is a combination of your corner bookie and offshore, online illegal operators. Having a legal, regulated option to the market is important and it is additive to the omnichannel experience that our members can offer. The addition of mobility is not something that takes the place of being able to go to one of our properties and go to a restaurant, and see a show, enjoy the pool and hit the casino floor.

Is litigation of the Federal Wire Act in the rearview mirror at last?

We now have a new administration. We don’t have a great deal of insight into the Attorney Generaldesignate’s position on that and hope to get clarity when he goes before his confirmation hearings. Like every business in America, our industry looks for clarity and certainty. With the court’s ruling I believe that is issue is largely behind us.

You’ve been generally supportive of President Biden’s $1.9 trillion stimulus proposal. What’s in it for gaming?

The additional stimulus, from our perspective, is getting money in Americans’ hands so they can pay their bills and be able to travel and purchase things. It’s very important, we have—as a gaming industry— for a long time been carved out. From our perspective, it’s very important to remain where we are, which is being treated like any other business in America.

Is there anything that isn’t in there but should be?

We’ve pressed for liability protection. Nevada made some important steps in and around liability. We have to do it in a targeted manner. But part of the challenge of moving the Covid-relief bill through reconciliation, which is probably more archaic that you may or may not want to dive down into, it does limit the number of issues in and around the Covid environment into almost strictly finding-money issues. So there are some pieces that we will not be able to have addressed in this first Covid-relief bill. But I hope we’ll get an opportunity to move with this forward. There’s important measures that need to be addressed and supported to restart business travel, conferences, conventions. Senator Catherine Cortez Masto had an important amendment to the Covid-relief bill and we’ll continue to work towards moving that because it’s bipartisan, it’s something that we need to do as we’re looking not just to stimulate vacation travel but the business-travel segment that is so important to many of our destinations, specifically Las Vegas.

A huge part of your constituency are tribal casinos. What distinctive challenges is Native American gaming facing during this crisis?

One of the things that I felt was very important when I took this job was to make our tribal members feel how important they were to me, and my relationship with the National Indian Gaming Association and Chairman Ernest Stevens has been one that we have worked shoulder to shoulder and side by side to make sure that our collective interests are felt, worked through and then supported from the advocacy perspective. We’ve gotten a lot done in the CARES Act last year, but in many cases the casinos, the gaming elements of the tribe are the principal engine of social support for so many of our tribal friends that it’s important that the administration and the Congress address some of those issues in the coming bill and going forward. I believe there has been strong receptivity around tribal issues in the Covid relief.

In your last press conference you sounded a warning about increased taxation. Are there strong indications that gaming taxes could be increased and, if so, where?

So far, so good. We have to remain vigilant in that regard. Our industry almost always shoulders a higher tax base than any other industry in the states in which we operate, and we want to make sure that political leaders and legislative leaders understand the important role we play in job creation, economic revitalization and taxes paid to the jurisdictions in which we operate, and there is a limit to how high that tax rate goes and we can continue to be the community leaders that we are.

In the past you’ve been accepting of current tax levels and have pointed out that gaming isn’t an industry that asks for financial incentives to come into a community. Are tax levels becoming a burden? Is relief needed?

We’ve seen relief in some states. Because of the outsized role that we play, as it relates to revenues to the states, they are reluctant to hound our industry and that’s important. That’s the right posture for them to take. To the degree that other businesses are getting relief and local stimulus, we obviously think that our industry should receive the same benefit as other businesses. We’re not looking to be treated any differently, either negative or positive.

Gaming expansion ran the table in 2020’s elections. What does this say about public acceptance and the industry’s image?

We’re now in 44 states and the District of Columbia. In every one of those states governmental leaders can look at the impact we make in our communities and say, ‘We are much better off to have the gaming industry in our jurisdiction.’ That is why we achieved successes on ballot referendums and achieved new respect from lawmakers. We do a lot of research and survey work. Fifty percent of Americans have a favorable view of the casino industry and that was five percent up from two years ago. It played a very large role in why, for the first time in the history of the industry, we weren’t discriminated against when the CARES Act was passed. That’s because lawmakers and community leaders and social groups all recognized the important role we play in the communities in which we operate.

In which states do you expect expansion or additional expansion to occur?

On the sports-betting side, there’s four states that are pretty close: Massachusetts, Georgia (which would be a first for that state), Ohio and Kentucky. And then Texas is certainly the largest state in the country that doesn’t really have any major gaming and there has been a renewed focus in the legislative session on sports betting as well as casino gaming, and for the first time ever that state is open to the notion of having integrated resorts as well as sports betting. In New York, Governor Andrew Cuomo, in his State of the State, talked about raising sports betting and he realizes that, in the neighborhood in which he resides, there’s other states that have either moved forward successfully with sports betting or are currently moving that and he doesn’t want to get left behind. Then in California, where we have a very strong tribal constituency, there’s some continued momentum in how best to construct a sports-betting regime that respects the tribal-jurisdictional issues that would be required in any piece of sports-betting legislation.

Casinos were extremely proactive in dealing with Covid-19. What changes do you think are permanent?

Casino operators, whether operating testing sites or distributing vaccinations, have shown we are responsible members of our communities. And then

one of the innovations, maybe the greatest innovation that will come from this, is they moved toward consumer choice as it relates to payments. For a long time this was an industry that primarily was a cashoriented industry. And that still is the preponderance but the pandemic has accelerated the industry’s experimentation with and successful implementation of contactless, mobile, digital payments. I don’t think we’re ever going backwards in that regard. It may well be in 10 years’ time that the design of the casino is completely different. It doesn’t have to be built like a fortress because of all of the cash that is housed within it. It opens up tremendous opportunities to think very creatively in how casinos are designed. That is one of the things that we probably didn’t think of when had to work our way through the pandemic but the issue of cash has always been something that vexed me and we’ve made a great deal of movement toward accepting digital payments in every facet of the industry. And that’s due to the consumer because, frankly, in every other aspect of their lives they’re using digital transactions, from going to Starbucks to every other piece of their lives. Two, it helps with our commitment to anti-money laundering and knowing our customer. There’s issues around bank secrecy, and ensuring that we are continued partners with FinCEN and law enforcement. That only helps us in that regard.

Given the AGA’s proprietary revenue tracking, what’s the runway for recovery in 2021? What does your crystal ball tell you?

We’ve just kind of looked at the numbers for 2020, and January and February were the best months we’ve ever had in the industry’s history. We closed out the year down 31 percent. My view is incredibly optimistic for 2021, particularly the back half of the year.

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