Small gambling businesses in the US will now have access to the Paycheck Protection Program (PPP), after amendments were made to the package’s eligibility.
Originally, the PPP stated that small gambling businesses could not benefit from financial support in this respect. This prompted the American Gaming Association (AGA) to demand changes to these rules.
Following a strenuous campaign, the organization’s efforts have now been rewarded.
Which gambling businesses are eligible for PPP support?
All small gambling businesses will be allowed to apply for support, as long as they are not making money from illegal activities. They must also meet the PPP’s other eligibility guidelines.
Set up as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the PPP enables small businesses to apply for a series of loans.
If all employees are kept on the payroll for eight weeks and the cash is spent on rent, utilities, mortgage interest or salaries, these loans are forgiven.
AGA President & CEO Bill Miller was one of the key figureheads in the campaign to make small gambling businesses eligible for PPP support. He shared his thoughts on the outcome, which were as follows.
“In the nearly one month since the CARES Act was enacted to provide economic relief to blunt the impact of the COVID-19 pandemic, the American Gaming Association and our allies have fought tirelessly to correct the Small Business Administration’s antiquated policy that precluded gaming companies from qualifying for loans through the Paycheck Protection Program.
“We are pleased that the new regulatory guidelines released today make small gaming companies eligible for this critical program just as Congress has replenished its funding.”
He continued by expressing his gratitude to President Donald Trump and his administration “for recognizing that commercial and tribal gaming industry employees deserve the same support available to other small businesses”.
The road to full PPP eligibility was a long one for the gambling industry
The PPP was originally signed into law on 27th March, just as the US was beginning to shut down due to COVID-19. When these were passed, little was made available to small gambling businesses.
After this, Miller and the AGA wrote directly to Trump on 6th April. He did this with the support of numerous senators and representatives. The President said that he would “look into this” during one of his daily press conferences.
On 14th April, it was announced that some changes would be made. The Small Business Administration (SBA) made loans available for businesses with gambling revenue that was less than $1 million. Less than half of the business’ overall revenue was allowed to come from wagering activities; the previous demand was lower than one-third.
Miller again commented after this. He said that these changes were “woefully short of fully-addressing antiquated discriminatory policies”, which had “restricted small gaming companies from accessing critical loan support made available through the CARES Act”.
Now, however, gambling businesses with legal revenue will have the same access as other industries.
COVID-19’s impact on the US gaming industry
Land-based casinos are closed for the time being, in a bid to reduce the novel coronavirus’ spread.
Some states with regulated digital gaming have noticed a sharp increase in online wagering.
When New Jersey revealed its on and offline statistics for March 2020, retail casino revenue had dropped by 61.7% year-on-year. However, fortunes for online casinos contrasted – they enjoyed 65.6% higher revenue than in March 2019, making $64.8 million in total.
In the absence of sports betting, other verticals in Pennsylvania also flourished on the web. Operators’ revenue for online slots, table games and poker increased by 24.5% month-on-month to $24.3 million. This helped to cushion the overall monthly revenue decrease of 51%.