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USA Gambling Industry is in Danger

USA Gambling Industry is in Danger

By    |   Monday, 04 May 2020 07:05 PM

The worldwide coronavirus crisis is causing problems for businesses across all kinds of sectors, but the gambling industry in the United States is being hurt more than most.

Land-based casinos across the country have been forced to shut their doors and the lack of income puts their future at severe risk, especially as it remains unclear when they might be able to welcome customers as normal once more.A picture says a thousand words. Vegas now.

Indeed, the casino industry requested emergency financial help from Congress in order to help them to get through the worst of the pandemic and emerge unscathed at the other end.

Members of the American Gaming Association (AGA) called for the industry to be given support, following in the footsteps of the airline sector, which also asked for government help.

According to a report by the Washington Post, one casino industry representative has described the sector as being at a "near standstill". With the gambling industry in the United States thought to be worth around $260 billion, this could have a major impact on the economy as a result. So what happens next for the casinos industry, as the coronavirus continues to spread worldwide?

Casinos bailout could be controversial

Any government bailout for the casinos industry would likely be controversial. While the sector delivers a significant amount of revenue in taxes, some people believe casinos prey on the vulnerable - despite the fact most people enjoy playing games with minimal risk of addiction.

The Post's report stated that a representative of Wynn Resorts was among those to have called for cash payments to be made from the government to casino companies. But the man who used to run the company until quite recently, Steve Wynn, has donated a large amount of money to President Trump's campaign. Wynn, before resigning over sexual harassment allegations, was also appointed by Trump to the Republican National Committee's finance committee.

This places additional scrutiny on the government's bailout of the casino sector, especially as President Trump is also in business with casino entrepreneur Phil Ruffin, with whom he owns the Trump International Hotel Las Vegas.

The AGA previously said liquidity is needed urgently in order to provide support to workers and businesses in the casino industry, which employs millions of people across the United States.

After President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) last month, the AGA welcomed the move. "We commend Congress and the administration for acting swiftly to provide needed relief," said a statement released by the AGA. "The gaming industry united to achieve a major first step that will help sustain us during the required shutdown and ensure America’s employees can return to their jobs as soon as it's safe."

Not everyone agrees with bailing out the casino industry, though, regardless of the important employment provided by the sector. An editorial published by the Atlantic lambasted the government's decision as a "moral catastrophe" as it says the sector "abuses citizens".

What will be the impact on online casinos?

While land-based casinos are undoubtedly in a lot of danger, the impact on online casinos is harder to quantify. After all, some casino customers who cannot visit their usual land-based facility might be tempted to go online to play their favourite games such as roulette instead.

But with so many people enduring a precarious financial situation, funds for gambling could be severely limited too. FlashCasino's Angie Harper comments: "Online casinos will be hurt much less than land casinos but it’s unclear what the long-term consequences will be." She is certainly right on that point, with many in the industry growing impatient to see what will happen next.

The iDevelopment & Economic Association (iDEA), which is an industry trade group, has called for changes to the law to be introduced in order to allow online casinos to open more easily. Online betting is still only permitted in some US states including New Jersey, Delaware, West Virginia, Rhode Island, Arkansas, Pennsylvania and, naturally, Nevada.

Under the plan from iDEA, state governors would be given emergency powers in order to open the doors to companies such as online casinos. The theory is that this would help to fill the expected gaping hole in finances as a result of the pandemic.

What happens next for the gambling sector?

With coronavirus continuing to spread quickly across the United States and the death toll rising alarmingly rapidly too, it is all-but impossible to predict what is going to happen next.

But it is inevitable that the gambling sector, like many of the country's other industries, may never look the same again following the outbreak's impact.

Online casinos could help to fill the void in the short-term, but even companies operating through the internet are facing a future that looks to be uncertain in even a best-case scenario.

As well as help that is on the way from the government, billionaire Warren Buffett has signalled he could provide support for failing businesses, which may include online casino companies.

Bailouts might just be the only way casino companies can stay alive through the crisis.

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The worldwide coronavirus crisis is causing problems for businesses across all kinds of sectors, but the gambling industry in the United States is being hurt more than most.
casinos, gaming, lasvegas
854
2020-05-04
Monday, 04 May 2020 07:05 PM
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