The U.S. casino industry, and NJ casinos, in particular, are seeking regulatory and tax relief from the federal and state governments. The fact is, the coronavirus lockdowns and social distancing requirements have crippled an industry that depends on the tourism and hospitality industries. In turn, nationwide, lost casino revenue has cost states and local governments more than $2 billion in tax revenue. The economic devastation caused while the NJ casinos were shut down for four months is evident in the high unemployment numbers in Atlantic City.
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NJ Casinos Need Help
While 90% of NJ casinos have reopened, they continue to operate at severely restricted levels, allegedly to slow the spread of the coronavirus. Many leaders in the industry believe additional financial aid is necessary for casinos and their employees.
In his State of the Casinos speech at the Global Gaming Expo 2020, held online due to the continuing coronavirus restrictions, American Gaming Association President Bill Miller declared that the industry is making a come back but needs help.
“Gaming has never experienced a disruption like the COVID-19 restrictions,” he said. “Over a two week period in March, every casino in the country was closed by government-mandated shutdowns, impacting every one of the 1.8 million jobs we support.
“Casino workers, their families, as well as the small businesses that depend on the industry, have all been hard hit,” Miller said. ”And our states and local communities are feeling it, also. In addition to COVID’s impact on jobs, businesses, and the well-being of our coworkers, families, and friends, state budgets have been devastated by the pandemic restrictions.”
The first two-months of shutting down the NJ casinos led to more than a $1 billion loss in economic activity. That number included all direct and indirect economic activity associated with the NJ casinos, including not only gaming revenue, but also restaurants, bars, entertainment, and hotel stay, as well as the impact on vendors, suppliers, and workers.
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Casino Shut Downs Around the Country Hurt the Economy
Every day its casinos were shut down, the city of Detroit lost $600,000 in gambling tax revenue. In Maryland, the shutdowns annihilated $209 million in gaming tax revenue and Pennsylvania was hit with $323 million in lost tax revenue, due to the extended shutdowns.
But the hardest hit, is the state of Nevada; it’s estimated that the Silver State has lost more than $12 billion in total revenue due to the shutdowns and continuing coronavirus restrictions. It’s estimated that the 334 casinos in Nevada lost on average $33.3 million in revenue every day that they were closed from March until June. As a result, the state not only ranked number one for the most gaming revenue lost, but also topped the list for the highest rate of unemployment in the country.
In 2019, the U.S. casino industry raked in $43.6 billion, but that number will certainly tumble this year due to the covid-19 government-mandated closures, as well as the lingering restrictions on capacity, the social distancing measures, and the mask mandates. Couple that with the reluctance of some people to travel to the NJ casinos, not only due to fear of the virus, but also, because of the restrictions, the outlook this year looks bleak.
The US Casino Industry Needs Relief
While the casino industry did gain access to federal pandemic relief funds approved by Congress, the industry will insist on inclusion in any future government aid. The NJ casinos, and casinos nationwide, also want liability protection so that if they follow public health guidelines they can’t be sued by people claiming to have contracted the virus on their property.
The casino industry desires tax relief to help save jobs, and to help pay for expenses related to COVID-19, such as handing out masks, hand sanitizers, and all of the plexiglass dividers. Finally, both the casino and hospitality industries want to help to boost tourism and travel.
A US Senate relief bill co-sponsored by Republican Kevin Cramer, of North Dakota, and Democrat Catherine Cortez Masto, of Nevada, and would give the convention and trade show industries a tax credit for the cost of attending or hosting conferences and conventions in the country from 2021 through 2023.
Also, the casinos are pushing for digital payments, to avoid the handling of cash by their employees and customers, as a public health measure
In a webinar sponsored by Stockton University in New Jersey, Jim Ziereis, the vice president of sales for the Caesars Entertainment’s NJ casinos, pointed out that casinos had to adapt very quickly to the coronavirus mandates and restrictions.
“When you walk around the casino floor, you’ll see that nearly every other slot machine is turned off,” he said. “There are also fewer seats at the gaming tables. All that contributes to lost revenue.”
Ziereis also noted the huge number of Americans who continue to lose jobs due to the shutdowns and restrictions are hazardous for the casino industry.
“As we go forward, more and more people are being laid off or furloughed,” he said. “It will be very difficult to sustain a high rate of visitation when people have no money.”
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