The association that represents casinos throughout America is optimistic that gamblers will return to the tables in 2021, but the organization’s Nevada counterpart, facing the prospect of a tax increase, is curbing its enthusiasm.
In a news release Thursday, American Gaming Association Chief Executive Officer Bill Miller cited vaccine distribution, responsible reopening, and consumer confidence as cause for the industry to be hopeful.
“There’s huge pent-up demand for gaming—and I’m upbeat about the second half of the year in particular,” Miller said. “As vaccines roll out, people will be excited to travel, hungry for entertainment, and desperate to get out and have fun again. That’s an environment where gaming will thrive.”
Nevada Resort Association president Virginia Valentine says she’s also optimistic about the second half of the year, but added “a 44 percent tax increase will only further damage Nevada’s recovery efforts, create permanent jobs losses and further jeopardize capital investment and future economic development.”
A ballot initiative sponsored by the Clark County Education Association to raise the gaming tax is projected to raise $300 million annually for schools. A separate measure to raise the sales tax would generate more than $1 billion, according to the teachers’ union.
If the Nevada Legislature rejects or fails to act on the measures, they’ll go on the 2022 ballot.
“As evidenced by 2020 Nevada Gaming Abstract recently released by the Gaming Control Board, Nevada’s largest industry and employment sector has been devastated by the continuing impacts of the pandemic, and there remains a long road ahead for Nevada’s economic engine and the businesses that depend on it to fully recover, ” Valentine said in a comment to the Current.
The Gaming Abstract shows casino revenue fell by 25 percent — more than $7 billion — in the fiscal year ending July 2020.
“Targeting the resort industry with a 44 percent tax increase will only further damage Nevada’s recovery efforts, create permanent job losses and further jeopardize capital investment and future economic development.”
The Abstract also reported that thanks to MGM’s sale and leaseback of Las Vegas Strip resorts to real estate investment trusts, administrative expenses were slashed, and the industry’s net income in the state in 2020 actually increased.
Valentine said distribution and acceptance of the vaccine are vital to recovery.
“The sooner hospitality employees can be vaccinated, the sooner we can restore our tourism-based economy, welcome back large events and tradeshows, reopen dormant businesses and bring more Nevadans back to work,” she said.
The AGA says its research indicates one in three American adults plan to visit a casino this year.
Miller said he’s focused on securing economic relief at the national level for the gaming industry via “temporary liability protections, investment in travel and tourism, supportive tax policy, and additional tribal relief.”