Across the United States and on an international level, gambling operators are struggling. With the spread of Covid-19, also known as the coronavirus, at an all-time high, casinos were forced to close and remain shutdown today. For many operators, the loss of income is large, and cities are affected due to the gaming facilities offering payments that help programs in the region. In Los Angeles, cardrooms and the cities associated with them are struggling with no revenues for quite some time. These operators and regions are asking the state of California and federal government for assistance.
Major Hits
There are several cardrooms in California that are hurting due to the shutdown. The Gardens Casino in Hawaiian Gardens has been hit quite hard, after the venue was closed due to how much the city receives from the property. Almost 70% of the general fund for Hawaiian Gardens is derived from the cardroom via club fees and tax revenues.
The city has now said they will be forced to offset the losses for the year via reserve funds as well as layoffs. They will also have to cut back or eliminate altogether the youth and senior programs as well as transportation, police services, improvements to infrastructure and nonprofit partnerships.
Ernie Hernandez is the city manager for Hawaiian Gardens who has called concern an understatement. According to Hernandez, the real problem will be the quality of life in the region due to the fund loss.
Seeking Assistance
Late last week, the California Gaming Association sent a letter the congressional leaders in the state, calling the situation a dire one. Most of the casinos in the state have less than 500 workers. It appears they would be eligible for the Paycheck Protection Program that is offered by the federal government, but they will not be able to take out loans available due to participating in the gambling industry.
According to the rules of the program, businesses that derive 33% or more of their revenues from legal gambling are not eligible. President of the California Gaming Association, Kyle Kirkland, commented that without funding from the PPP, the gaming operators of the state will be forced to layoff employees permanently and some of the providers may not be able to reopen.
The Gardens Casino is hopeful they will be able to find help for their 2,000 employees. The general counsel for the facility is working to see the Small Business Administration provide some form of relief. The counsel is trying to fix the long-standing rule of the Small Business Administration that does not allow loan options for gambling businesses.
According to the attorney, they are hopeful that the rules of the stimulus package will be lessened so they can take part. Many of the employees of the property are minimum wage and rely on the tips they earn from patrons for their income.
Hawaiian Gardens officials are also trying to push for help. Mayor Jesse Alvarado sent a letter to Governor Gavin Newsom that stated the closure of the cardroom has a ripple effect on the region. The facility plays a vital role in the city’s ability to fight crime and tackle gang issues.
The city has yet to figure out how many employees will have to be let go but they have already issues an advance notice to city workers so they can be prepared if and when the time comes for layoffs.