Nevada’s leading gaming industry trade organization said the recovery time from a 30-to-90-day shutdown of all tourism activities due to the COVID-19 coronavirus pandemic could take up to a year-and-a-half with an economic impact reaching almost $39 billion.

In a letter Friday to the state’s congressional delegation, the Nevada Resort Association made its case for the gaming industry to be included in an $850 billion to $1 trillion federal economic stimulus package being considered on Capitol Hill.

The delegation, along with the Washington D.C.-based American Gaming Association, has been lobbying for the casino industry’s involvement in the recovery efforts. MGM Resorts International CEO Jim Murren was part of a group of tourism and hospitality business leaders who met with the president at the White House last week.

Resort Association President Virginia Valentine outlined for the six-person delegation in the letter that no other state is overly reliant on tourism like Nevada.

“Nevada depends more on tourism than Alaska does on oil; Wyoming does on coal mining; or, New York City does on the financial sector,” Valentine wrote. “Las Vegas, the state’s largest economic center, is more dependent on tourism than Detroit is on auto manufacturing; Seattle is on aerospace; or, Nashville is on music and entertainment.”

Nevada is the nation’s largest gaming state, producing $12 billion in casino revenue in 2019. The Las Vegas Strip produced $6.87 billion in gaming, more the 50% of the state’s overall total.

During the fiscal year, which ended last July, Nevada casinos produced $24.5 billion in total gaming and non-gaming revenues.

‘40% of the state’s general fund’

According to an economic assessment on the coronavirus shutdown completed by Las Vegas-based financial advisor Applied Analysis, Nevada’s economy is not as diverse as other states that are also considered tourism destinations. Some 40% of Nevada’s general fund comes from taxes on gaming and tourism, and more than 450,000 jobs in the state – one out of every three – is supported by tourism.

“The economic implications of this crisis appear unprecedented, far-reaching and have the very real potential to cripple the Nevada economy,” Applied Analysis wrote in the report.

“Based on current information and over two decades of industry-specific expertise, we believe that the industry is at risk of losing $39 billion over the next 12 to 18 months. As a result, 320,000 employees relying on $1.3 billion in wages and salary payments each month are at immediate risk, numbers nearly twice that reported during the peak of the Great Recession.”

Valentine, whose organization represents that vast majority of the state’s gaming industry, said tourism in Nevada pays $20 billion in wages and salaries annually, $1.8 billion in industry-specific fees and taxes, and has an annual economic output of $75 billion, 45% of the state’s aggregate output.

“Each year, we welcome nearly 57 million visitors from around the world,” Valentine said. “As the state’s No. 1 industry, we are the largest employer, the largest taxpayer and the economic foundation the state thrives upon.”

Nevada response

Nevada casinos began closing last weekend in an effort to halt the pandemic’s spread. MGM Resorts and Wynn Resorts announced plans to shutter more than a dozen Strip resorts.

By Tuesday afternoon, the Cosmopolitan of Las Vegas and Las Vegas Sands Corp. announced they were ceasing operations. A few hours later, Nevada Governor Steve Sisolak ordered a 30-shutdown of all casinos statewide, following similar actions by more than a dozen other state governors and state gaming regulatory agencies.

Most casino companies said they will pay employees through the closures. Several gaming companies – including Caesars Entertainment, MGM Resorts, Boyd Gaming, Penn National, Twin River Worldwide, and Golden Entertainment – have drawn down billions of dollars in credit lines to help fund operations during the crisis.

“Should companies’ ability to maintain payroll and health care coverage diminish, hundreds of thousands of employees and billions in wages and salaries will be immediately at risk as will the very core of Nevada’s economy and its fiscal system,” Applied Analysis wrote.

According to the assessment, the coronavirus shutdown has the potential to eliminate 320,000 Nevada jobs that pay wages of $1.3 billion per month. The losses are being temporarily mitigated by companies continuing to pay idle employees, however, Applied Analysis called that move “a condition which is unsustainable.”

Meanwhile, cancellations in the convention and meeting sector have already approached losses of $2 billion in March and April, “and subsequent events are generating losses multiple times this in the coming weeks.”

Washington response

The AGA said Saturday 92% off all commercial and tribal casinos in the U.S. are closed, leaving an estimated 642,000 casino gaming employees nationwide out of work, the bulk of whom are in Nevada.

Last week, AGA CEO Bill Miller called Nevada “the epicenter of the resilient American gaming industry,” following the shutdown.

“The federal government must act swiftly to bring relief to our friends, neighbors, and colleagues in Nevada and all across America whose livelihoods have been severely impacted by these hard but necessary actions,” Miller said.

Valentine called the economic situation “unprecedented,” and it would have “catastrophic financial ramifications” for individuals, families, businesses and state and local budgets.

“With each passing day Nevada’s tourism-based economy is shuttered, the more difficult it is for Nevada to recover and for the state’s largest employers to continue assisting their workers during these uncertain times,” Valentine said.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.