The American Gaming Association played a crucial part in the passage of the CARES Act, which will provide relief for the gaming industry at this critical moment. On March 30, Bill Miller, president and CEO of the AGA, sat down with GGB Publisher Roger Gros from his home in the Washington D.C. area to discuss how the process evolved and how the industry has reacted. Efforts to include the gaming industry in this assistance package have been largely underplayed, but its inclusion is an important milestone, and recognizes the importance of the industry in the United States.
GGB: Are you satisfied with the way the gaming industry was handled with the CARES Act?
Miller: Yes. It’s a terribly difficult time for the industry. For all intents and purposes, the entire gaming industry across the country is shut down right now. Our estimation is 650,000 direct employees and 350,000 small businesses are part of that ecosystem, whether it’s in Las Vegas or Washington, Pennsylvania or Indian Country. The suppliers and manufacturers are suffering just as badly. So, across the industry, there’s a lot of pain and there are a lot of tough decisions that have to be made by our member companies and their leadership. If you don’t have any revenue, it’s kind of hard to continue to keep people on payroll.
I’m pleased that the gaming industry was included in the CARES Act. As you know, in the past there have been efforts, sometimes successful, to exclude the gaming industry from relief packages. That wasn’t the case here. Collectively, the AGA and our members were able to make a compelling case that this industry should not be singled out negatively. The harm that our industry is facing is just as difficult as anyone else in the travel and tourism sector.
There was a chart published last week that puts the gaming industry right below the airlines in terms of how brutally it would be impacted by the virus. And that’s certainly been the case.
It has. Going up to the Hill, we had great representation and advocacy by the Nevada delegation, but we also had a parade of advocacy by a number of other members of the Senate and House, on both the Republican and Democrat sides, who recognize the importance of our industry in the states that they represent. That’s really important. We’re an industry that is now in 43 states. And because of that, it wasn’t so terrible that we didn’t have a figure like Harry Reid (former Senate Majority Leader and Nevada senator) to rely on. But I have to compliment the great work that the two Nevada senators and the congressional delegation did. And because of our economic and community footprint around the country, we were able to draw on support from people from Pennsylvania, Louisiana, Mississippi, Ohio, Michigan—members willing to step up on our behalf at a time when it was needed.
Your staff did a great job handling the optics on this. As you said, in the past we’ve been left out of some stimulus and aid bills because of anti-gaming rhetoric.
I think our team did exceptionally well. Our GR (government relations) folks were on it. I was making phone calls into the administration and talking to people on the Hill, trying to understand specifically which provisions were most beneficial to different elements within our membership. I think Chris Cykle (AGA senior vice president, government relations) did an exceptional job, helping to prioritize the elements within this relief bill that could be most helpful, and then building our asks around that.
With a membership as diverse as ours—commercial, tribal, suppliers and manufacturers, companies that are domestic, international and regional or Vegas based—trying to coalesce around a limited number of highly beneficial provisions is not always the easiest thing to do. And I would argue that in the past, some of the infighting among people in the industry hurt its ability to speak with one voice.
In this case, both our team internally as well as the collective AGA membership really acted with a unified voice and with aligned priorities. And it really helped us.
What are some aspects of the bill that really aided the industry, given all those different elements of the AGA?
What we pushed for in the early days was making sure that we can do everything possible to keep workers attached to their employers. There were some significant interests among the people on the Hill to focus on unemployment benefits, which, of course, are important also. But our argument—I think our collective argument—was we need to do everything we can to give employers in the gaming space that liquidity to keep their employees attached to them for as long as possible. Also, the loan guarantee and the economic stabilization pieces were really important to help provide that liquidity.
We haven’t seen exactly what the rules are, and how they’re going to be written in terms of how that $4 billion stabilization is going to look in the end. But it’s clearly an opportunity to inject liquidity into some of our companies in the gaming industry. Importantly, there was a gaming carve-out as well, in terms of some of the small business pieces—loans with the ability to have no principal and interest payments for six months is really going to help and target those 350,000 small businesses, and those loans can be forgiven. That’s a really, really big deal.
One of the other things we pushed very hard on was for employee retention and tax credits, going back to our thesis that this is a health crisis that’s shifted into an massive economic crisis. Remember, the economy was in a good place, and our industry was in a very good place. And because we were shut down by the government through no fault of our own, I believe strongly that it captures the tax retention credit, where we can keep employers tied to the workers.
There are some other pieces. Being able to carry back net operating losses five years should be a provision on a going-forward basis. The deductibility on business interest—I think it certainly matters to some of our companies that were limited in the 2017 tax bill to 30 percent. It was increased at 50 percent in this bill. We were for pushing that back to 100 percent, and we weren’t able to prevail on that, but it’s still an important benefit to our members, particularly some of our larger members that have a lot of debt.
When did the AGA first come to grips with the fact that all U.S. casinos would close?
I remember going to Chicago to meet with Rush Street CEO Greg Carlin, probably two Thursdays ago. It was the day the Ohio governor was considering closing the casinos in his state, and the day after the governor of Pennsylvania began to talk about restricting gatherings of 250 people. I remember Greg and I talked about J.B. Pritzker, the governor of Illinois, was also considering this. So I came to the conclusion, probably on that day, that these dominoes were going to fall. One state may hold out longer than another state, but ultimately, when these governors begin to make these decisions around 250 people or 100 people or 50 people, ultimately we’re in the crosshairs of that dynamic. It would be hard for us to remain open under what was increasingly an effort to reduce the number of people congregating in any place.
It seems now that we’ll all definitely be locked down until April 30. Do you think the industry make it another month?
I do. This is a resilient industry. You’re already seeing companies making prudent but very difficult financial decisions that create hardship for their employees and certainly the small businesses that depend on them. But I do think the CARES Act will help. Despite the fact that government acts slowly most of the time, I believe it will act quickly as it relates to creating infusions of liquidity into our businesses that will help sustain them. I’ve only been in this position for 14 months or so, but this is a tough industry, with a lot of tough people.
I’m absolutely convinced that when the health crisis is addressed in a manner that people feel safe again—that means tests are ubiquitous, the treatment options are better, and medical science has caught up to the virus—I have every confidence that we’ll come out of this very strong. This is the American healthcare system, in my opinion the greatest in the world. We have the best global health sciences working on this issue right now.
But it’s going to take time. People will become comfortable when they believe that anybody can go get tested, that the hospitals and health centers are not at capacity or over capacity, that the ventilator shortage has been ameliorated and the treatments of Covid-19 have become better, not just in hospitals but actually at home. That’s when people will start to feel comfortable. And then that’s when we’re going to start to see the green shoots of the industry and the economy begin to appear.
Then the gaming industry will benefit too. People are cooped up in their homes. They want to go out and have fun, but they want to make sure that the health and safety issues are addressed to their satisfaction. And we’re going to spend a lot of time at the AGA, in terms of research, to better understand the needs of consumers in terms of safety and hygiene in our industry, to best position the industry to come back stronger than ever.
How do you think the re-openings will occur? Do you think it’s going to be almost like the closings, that it’s going to be on a state-by-state basis?
That’s the big question, really. I spent a lot of time on the phone with the operators in Macau when China was going through this, and we would ask them, ‘What are you seeing? What are you doing? What does the trend line look like there?’ And they all looked at the government’s actions in terms of necessity. It was certainly financially very draining for them, but they began to open up China, province by province.
I think we’ll see something like that in the U.S. I don’t know about travel restrictions. There are a lot of things to contemplate when you’re trying to design a reopening. It’s easy to shut things down. But opening things back up is much more difficult.
What will be the AGA’s role as we move toward reopening?
We have multiple responsibilities right now. One is to make sure that all of our members understand what was in the Cares Act and how they can participate and benefit from it. We’re going to be a 24/7 customer service center for our members to help them access benefits.
Secondly and more importantly is, when do you begin the process of understanding the American customer and what they need? What confidence do they need before they’re going to go to sporting events again? What will convince them to go to casinos and hotels and restaurants and have a good time? It’s important to understand those things, and sharing that with our members will be a very important exercise, spending time doing that sort of research in advance of the opening back of America.
The cancellation of all sports has been like a double whammy to the industry and its recently legalized sports betting. Do you think bringing sports back first would bolster the morale of Americans, even if teams are playing in a stadium empty of people?
I do, but again, there has to be health and safety first. One of the issues that people have talked about as it relates to this specific topic has been travel. If you’re going to move teams around, are you potentially moving the virus around, which is kind of exactly what we don’t want to do? That is still an open question.
One of the odd things about this period is that illegal machines are still operating in many states, while all legal gaming is shut down. The AGA and AGEM have joined forces to fight illegal gaming, so tell us how you think this crisis is going to impact that campaign.
I certainly hope it impacts it more—even more so than what we had hoped to do pre-crisis. We were very supportive of working with AGEM and helping GLI to get their recent white paper out. When I spoke at NCLGS in San Diego earlier this year about the illegal market, I didn’t know why we call them “gray market” machine. They’re simply illegal machines, and suggesting that they’re gray suggest that they have some white around them—some legal standing. My view is that they’re illegal machines, period.
Remember, these machines don’t have any responsible gambling elements. They are not regulated. While some might say they’re regulated by some local entity, they’re certainly not regulated by the states. We need to shine a spotlight on this illegal activity in the same way that we shine a spotlight on local criminal enterprises, like illegal bookmaking and the illegal offshore market.
How does the AGA come out of this?
We will still have an economic crisis for quite some time. But it’s important for us to show the gaming industry that we’re committed to its success. I’m confident that we’ll come out of this stronger and more resilient. It’s going to be rough going for a while, but our people are warriors.
It doesn’t mean that for the next year or so it’s not going to be difficult from a trade association perspective. We’re going to have to make tough decisions, just like our members. Sometimes the AGA gets criticized because it seems like there are too many members—it’s too broad, and we can’t take positions on some of these niche issues. But hopefully what we’ve shown is that when the industry really needs a strong voice, it has one.
And that’s why you have a group like the AGA—to fight the big fights when they come, to be there to defend and advance the interests of the industry when the big challenges come. And this is a big, big challenge.
