Exploring Paycheck Protection Program Benefits for Casinos

The Paycheck Protection Program Opens Doors for Small Gaming Companies

In a significant turn of events, the Small Business Administration (SBA) has updated a previously contentious rule, thereby enabling small gaming enterprises to secure federal loans for payroll amidst the ongoing coronavirus pandemic. This revision comes after notable pressure from industry lobbyists and members of Congress, highlighting the challenges faced by smaller casinos and gaming entities during these unprecedented times.

The Small Business Administration (SBA) revised its Paycheck Protection Program (PPP) eligibility rules in April 2020 to allow small legal gaming businesses to qualify for loans if they have 500 or fewer employees and if legal gaming revenue constitutes less than 50% of their total revenue, thereby expanding access to federal relief for these entities during the COVID-19 pandemic.

The change in policy allows businesses within the legal gaming sector to apply for support under the Paycheck Protection Program (PPP), a move that was announced shortly after President Donald Trump expressed his intention to look into the restrictions that were preventing these small casinos from accessing loans.

New Guidelines for Gaming Businesses

Under the updated interim regulatory guidelines issued by the SBA, a legal gaming company qualifies for a PPP loan if it generated less than $1 million in legal gaming revenue last year, and if this revenue constituted less than 50% of the company’s total revenue. This adjustment aims to balance the longstanding policy of limiting lending to businesses engaged primarily in gaming with the broader goal of the PPP—to support a wide range of U.S. businesses and their employees during the COVID-19 crisis.

It’s important to note, however, that any business generating revenue from illegal gaming activities remains unequivocally ineligible for the PPP. This criterion is consistent with a federal regulation from 1996 that outlines specific business types that are disqualified from receiving federal agency loans.

Reaction from the Gaming Industry

Despite these amendments, there is a sentiment within the gaming industry that the changes do not fully address the longstanding, discriminatory policies that have restricted small gaming companies from accessing loan support available through the Coronavirus Aid, Relief and Economic Security Act (CARES) signed into law earlier this month. Bill Miller, president and CEO of the American Gaming Association (AGA), stated that while the updates represent progress, they fall significantly short of completely rectifying the issues at hand.

This situation underscores the complex relationship between the gaming industry and federal loan programs, highlighting the need for ongoing dialogue and adjustment to ensure equitable access to financial support during economic downturns.

As the situation evolves, it remains to be seen how these changes will impact small gaming businesses and whether further adjustments will be made to accommodate the unique challenges faced by this sector.