Many Colorado Casinos Now Eligible For Paycheck Protection Program Relief

Written By Ian St. Clair on 04/29/2020 – Last Updated on May 2, 2020

Colorado, along with the rest of the nation, serves as a prominent financial hub for the gaming industry in present times.

Qualified companies that employ fewer than 500 people can now access a second round of national financing. A total of $310 billion in small business loans is available through the Paycheck Protection Program (PPP).

The cap on gaming earnings for PPP registration has been completely removed.

Just weeks ago, struggling casinos were prohibited from requesting the initial round of loans due to an established rule. This rule prevented companies receiving Small Business Administration funding from reporting more than one-third of their revenue from legitimate gambling. However, it is now a complete reversal, allowing them to apply for loans.

Just a fortnight ago, the Treasury Department increased the cap on gambling earnings.

After facing intense pressure from the entertainment industry, President Donald Trump and his administration declared last Friday that they would fully eliminate the restriction. Consequently, casinos will now be eligible for the Paycheck Protection Program (PPP) despite earning profits from legal gambling activities.

The Washington Post was among the early sources to report that games could be a means to secure small business loans.

Last Friday, the Treasury Department issued a written statement stating that upon careful reconsideration and consultation with the Secretary, the Administrator believes that this approach aligns better with the policy objective of providing PPP loans to a wide range of businesses in the United States.

According to the Treasury Department, businesses that have derived income from illegal games remain ineligible for PPP funds.

The American Gaming Association commended the new regulation standards.

“In a statement, Bill Miller, President and CEO of the American Gaming Association, expressed gratitude towards President Trump and his administration for acknowledging the importance of providing equal support to employees in the commercial and tribal gaming industry, just like other small businesses. He also commended the efforts of members of Congress for consistently advocating for modifications to the guidelines, which will assist small gaming operators and their employees in navigating these difficult times.”

Casinos in Colorado have previously suffered 81 million income losses.

As a result of the ongoing COVID-19 pandemic, Colorado casinos in the gaming towns of Black Hawk, Central City, and Cripple Creek have suffered significant losses of at least $81 million since their closure on March 16. Consequently, numerous casino workers have been furloughed. However, the introduction of updated regulations is expected to provide some relief to these casinos.

The state’s stay-at-home and coronavirus fighting order underwent a change on April 26, transitioning to a safer and more relaxed policy. The updated regulations brought fewer restrictions in certain areas. Nevertheless, it is noteworthy that casinos remain closed, despite the imminent start of legal sports gaming on May 1.

On Monday, Governor Jared Polis acknowledged that the state is yet to find a solution for safely reopening casinos, bars, and pubs. He emphasized that these establishments pose unique challenges due to their inherently cultural nature.

PPP loans in the interim are now available for games with less than 500 participants. Additionally, Native American tribes operating gambling establishments are also eligible for funding assistance.

In an effort to offer further financial support, the casinos in Black Hawk were granted exemption from gambling fees by the city.

Nearly 9,000 folks work for CO games.

According to the most recent estimates from the Colorado Department of Revenue, the gaming industry in the state employed a total of 8,956 individuals in 2018.

The distribution of job statistics is categorized by group as follows:

According to the Treasury Department, the PPP offers financial assistance to small businesses, enabling them to cover payroll costs, including benefits, for a period of up to eight weeks.

Loan consumers have the option to utilize the funds for covering interest payments on their mortgages, rent, and various services.

Consumers have the option to defer mortgage payments for a period of six months. If the company upholds its employee count and income levels by either maintaining or promptly rehiring staff, the loans will be completely forgiven. However, a minimum of three-quarters of the forgiven amount must be repaid.