It took a crisis of epic proportions, but gaming’s inclusion in last week’s Covid-19 relief package indicates that the industry has finally achieved full citizenship in the national business state. For most of its history, gaming has been viewed as something of a pariah or an untouchable – except, of course, by the tax collectors. Even as various gaming options have been legalized, it seemed to be done with distaste and distrust of the prospective gaming operators. Anyone wishing to open a casino had to be subjected to the strictest of background checks, the underlying assumption seemingly being that all gamblers are at heart criminals with mobster friends and associates. Of course, those attitudes have begun to change as gaming has spread nationally. But in many states, casino operators still are not allowed to run for office; in some, they aren’t even allowed to contribute money to political campaigns. Thus, being included in a piece of national business relief legislation is a significant step forward for the industry.
Gaming succeeded in being included for several reasons; the Congressional Gaming Caucus, for starters, which is composed of eleven representatives from eight gaming states. A panel of travel and leisure experts that included a gaming company CEO met with the president and Congressional leaders ahead of the relief bill’s passage, and the American Gaming Association released a series of statements on the importance of gaming both nationally and by state, which included the number of gaming employees, the tax contributions made by the industry, and the industry’s wider national financial impact. The truth behind the AGA’s press releases played a significant role. All the major gaming states recognize the importance of gaming to their economy, especially now, in the light of lost jobs, tax revenue and economic output.
In no state is gaming more important than in Nevada. It is far too important to the state’s economy for its interests to be totally ignored. Gaming is easily the largest industry in the state; it employs more people, and pays more tax, than any other single source. It comprises 38 percent of the state’s total tax revenue. Tourism employs 450,000 people in Nevada. The Nevada Resorts Association estimates Nevada will lose $1 billion in tax revenue if casinos are closed for 90 days. And gaming, of course, is the lion’s share of the economy in Las Vegas; Wikipedia lists Las Vegas as having a population of 2.6 million people. The entire state of Nevada has a total of 2.9 million residents. Clearly, if gaming is the engine that drives Las Vegas, then Las Vegas is the engine that drives Nevada. Gaming is rarely left out of any debate in Nevada.
But even in Nevada, gaming made an important move toward full citizenship in the wake of the coronavirus crisis. A week after closing the casinos, Nevada Governor Steve Sisolak appointed former MGM CEO Jim Murren to the state’s COVID-19 Response, Relief & Recovery Task Force. Sisolak has made some bold steps in the face of the COVID-19 crisis. He ordered the casinos and all other gaming outlets in the state to close on March 17. He was not the first state governor to close casinos in response to the virus, but it was a much bigger decision in Nevada. Closing casinos could not have been an easy decision to make, and it carries considerable political risk.
Sisolak went further than that, also calling for all non-essential businesses to close and for people to stay home except when required, and to then practice safe social distancing. Up to this point, Sisolak was following the same basic plan that New York, Illinois, California and several other states had implemented. But Sisolak stepped out ahead of the pack and started to plan for recovery, even though Nevada is still trying to stabilize. The governor values expertise. Recently, Sisolak held a televised news conference at which only three people were present: the governor, his medical advisor Dr. Shadaba Asad, and a sign language interpreter. The governor read questions sent in by concerned citizens about the disease, the proper way to protect oneself, and other issues of import, and then stepped aside to allow Dr. Asad to answer them. It was a remarkable moment.
The governor is doing what good leaders do: using his state’s resource of expertise to deal with a complicated issue. His medical advisor is helping him set sound policies, and, in time, his taskforce will help establish a framework for recovery. Sisolak said that the taskforce was Murren’s idea, but regardless of its derivation, it’s certainly a good one. And who better to lead the effort than the former head of a multibillion-dollar public company? MGM has dozens of casinos nationwide and over 70,000 employees. It is an enterprise that requires sophisticated leadership. Gaming is a complex, complicated industry. Operating successfully requires long-term planning covering legal, financial, regulatory and political issues, along with operational issues that encompass hundreds of separate departments.
Nevada’s recovery will be every bit as complicated. The crisis will not just come to an end with casinos reopening, employees returning to work, and tourists rushing in to pull the handles on slot machines. It will happen in stages. Nevada’s casino industry is not likely to be fully recovered for at least a year, if not longer. Opening a casino is not easy; opening over 400 at the same time is going be more like planning for D-Day than a standard casino opening. The process will not be instantaneous and bringing back employees will also be a slow staged process. Not every business will be as slow and complicated to restart as the casino business will be, but they will all be difficult.
The COVID-19 crisis brought the gaming industry to the decision-making table. Having gaming there is going to help other industries and businesses in their recovery effort. Restarting the economy is going to be painful and slow. It will require everyone working together to get us back on track. Wishful thinking will not get it done instantly or make the problems go away. This time, at least, gaming has a seat at the table.
