AGA Backs Latest Paycheck Protection Program and Other News
The week from April 27 through May 1 has had seen several important developments in the U.S. casino landscape. AGA approved the newest PPP voted by SBA and Caesars set-up a relief fund. TSG and Flutter Entertainment are finalizing their merger on Tuesday, May 5, and Illinois casinos will have to stay shut until further notice, the Associated Press reported.
American Gaming Association Backs Latest Paycheck Protection Program
Following weeks of debate, the American Gaming Association (AGA) has issued a conditional approval for the newest revision of the Paycheck Protection Program (PPP) on Monday, April 27.
America’s largest gaming trade body had protested against various amendments to the PPP in the past, and even addressed a letter to U.S.
President Donald Trump, appealing to POTUS to take a personal interest in the issue and revise the PPP issued by the Small Business Administration (SBA) which, AGA said, discriminated against gaming businesses.
However, the latest revisions of the scheme, which amounts to $349 billion set up under the Coronavirus Aid, Relief and Economic Security (CARES) Act signed on March 27, will offer small and medium businesses generating revenue through gambling a relief.
Initially, the program excluded every business which generated over a third of its revenue through gambling. The measure was immediately blasted by AGA and gaming bosses.
Another amendment issued on April 14, offered to extend support to businesses with revenue up to $1 million, with less than half of the revenue generated through gambling.
Describing the measures as “woeful,” AGA finally gathered enough momentum to see SBA apply the final brushes on April 24 and strike a middle ground that pleased all parties.
Caesars Entertainment Sets up New Assistance Fund to Help Staff in COVID-19
Caesars Entertainment has become the latest company to expand its efforts in supporting its workforce and help cushion the economic impact on the workforce. The company set up a new employees’ assistance fund designed to disburse additional aid to those employees who are the worst affected by the lockdown.
Executives have forgone payment to help fund the assistance fund and all applications will be reviewed by an independent board of directors who will decide whom to aid while the lockdown lasts.
At the same time, Caesars Foundation will continue to support charities which have been helping with the fight against COVID-19, and specifically in communities where the casino giant has real estate and businesses.
Tony Rodio, Caesars chief executive, said that Caesars’ culture has always been based on mutual care and helpful attitude towards the workforce.
With the lockdown in place, estimated 90% of all employees have been furloughed and Caesars has gone into “a mission critical” mode keeping on enough workers to keep the business prepared for re-opening once the shelter-at-place measures are lifted.
Nevada Casino Closures Wipe 40% of Revenue
Since Nevada’s casinos closed on March 17, there have been many suggestions what the economic impact could be.
Finally, the numbers are out and they don’t look overly-reassuring with Nevada suffering a 39.6% revenue drop and sportsbooks bearing the brunt of the economic slow-down.
Overall, revenue dropped to $618.1 million year-over-year. Back in march 2019, the revenue stood at $1.02 billion, putting a halt to the strong $1-billion-a-month growth Nevada has seen for a few consecutive months.
Betting markets were among the most severely affected with revenue there plummeting to by some 76.3% down to $141.2 million, after all major sporting competition in the country have call it quits.
The National Basketball Association, National Hockey League, major League Baseball, and even Major League Soccer have all wrapped up their activities and are currently on pause.
Not only that, but Nevada missed out on March Madness, the largest collegiate sports betting event and an important driver of revenue right after the Super Bowl in February. Naturally, the moribund economy was also driven by poor results in the land-based casino segment with slot machines dropping by 30.6% to $468.7 million.
Over March, Las Vegas visitation also dropped by 58.6% and occupancy plummeted to 39.8%. Nevertheless, Governor Steve Sisolak has finally shown some signs of re-thinking the current complete lockdown and Las Vegas should start experiencing Phase 1 of the gradual re-opening by May 15.
Flutter Entertainment and The Stars Group to Finalize Merger on May 5
In other news, Flutter Entertainment and The Stars Group have confirmed that they will finalize the planned merger between the two companies between on May 5, to create a new gaming giant with combined annual revenue worth $4.7 billion.
Both companies’ shareholders gave their unanimous approval for the measure voting with over 99% in favor of the measure. In addition, the companies have obtained regulatory approval in the United States, the United Kingdom and Australia, paving the way up for the deal.
Peter Jackson, Flutter Entertainment chief executive, said he was “delighted,” with these developments and was looking forward to the finalization of the deal.
The combined efforts of the companies, Jackson said, would allow them to weather any uncertainties ushered in by the rapidly-changing geopolitical and regulatory climate.
To give the new company the best chances of success, Flutter and TSG will allow regional divisions to take charge of strategy and market penetration, with further streamlining of the company’s structure coming later on with four divisions put in place.
Illinois Won’t Catch a Break, the Associated Press Reports
While Nevada is tentatively entertaining the idea of re-starting business as usual, the Illinois Gaming Board has decreed that the state’s casinos must stay closed until further notice. The measure also applies to video gambling terminals and it all comes as part of the state’s broader plan to curb the spread of the coronavirus pandemic.
On Thursday, the Board’s administrator Marcus Fruchter said that the regulator would seek consultations with health authorities before okaying a return to normality in the state. Some 52,918 people have tested positive for COVID-19 in Illinois as of the time of the statement, with the death toll rising to 2,355.