Two U.S. senators unveiled bipartisan legislation Thursday that offers tax credits and other incentives to boost the struggling convention and tradeshow business while offering relief and recovery measures to the hospitality, travel, and tourism industries.
Gaming and casino industry representatives applauded the legislation introduced by Sen. Catherine Cortez Masto, D-Nevada, and Sen. Kevin Cramer, R-North Dakota, which provides recovery incentives for middle-class families to jumpstart travel once concerns over COVID-19 have diminished.
Nevada Resort Association President Virginia Valentine said the legislation could prevent permanent job losses and halt further damage “to the battered gaming industry and its workforce.”
The Las Vegas Strip has been particularly crushed by the coronavirus pandemic, which shut down all gaming in the state for 78 days beginning on March 18. Through August, Strip gaming revenues are down 45.8%, a figure which includes the declines of 99% that the market weathered due to the COVID-19 shutdowns in April and May.
Roughly two-thirds of the overall revenues produced by Strip resorts come from non-gaming avenues – hotel rooms, dining, entertainment, retail, and other attractions – areas that are heavily influenced by airline capacity and conventions.
Airline volume into Las Vegas’ McCarran International Airport is down 56% through August. Meanwhile, the Strip has seen five straight months of zero convention attendance, as all major trade shows have been canceled and pushed into next year.
The measure would create a tax credit for the cost of attending or hosting a convention, business meeting, or trade show between 2021 and 2023.
“The coronavirus pandemic has devastated economies and industries across the country, and Nevada’s hospitality, travel, and tourism sectors have been especially hard hit,” Cortez Masto said in a statement. “These industries are the economic engine of our state and our communities, and the incredible challenges they are now facing due to COVID-19 demand our attention – and action – in Congress.”
Nearly 1,000 commercial and tribal casinos in 43 states closed throughout March when governors, regulators, and tribal governments ordered the shutdown in an effort to slow the pandemic. Roughly 90% of the properties have since reopened at least partially.
American Gaming Association CEO Bill Miller said the COVID-19 closures significantly affected gaming employees and their communities
“While gaming’s responsible reopening is well underway, the sustained economic damage has jeopardized our ability to sustain jobs and drive much-needed tax revenue that will be essential to our nation’s economic recovery,” Miller said.
Miller, the head of the Washington D.C.-based trade organization since January 2019, said the legislation “will enable the gaming industry to retain employees and jumpstart nongaming elements of our business, like meetings and conventions, which account for the majority of our revenue in markets like the Las Vegas Strip.”
Cortez Masto and Cramer both sit on the Senate Banking Committee. Cortez Masto also sits on the Senate Finance Committee, which oversees the nation’s tax laws.
“While the economy is on its way to recovery, several businesses and workers are still hurting and in need of assistance,” Cramer said. “Our bill injects help into some of the hardest-hit industries and encourages them to hire and retain employees.”
The bill supports the restaurant industry by establishing a tax credit for restaurants or food service businesses covering any cost associated with reopening or increasing service at an establishment forced to either close down or reduce operations due to the COVID-19 pandemic.
The bill allows the locations to recover costs for any renovation, remediation, testing, or labor cost needed to prevent the spread of COVID-19.
Another tax credit would be created to encourage middle-class travel. The bill also would restore changes to the deductibility of entertainment expenses repealed by the 2017 Tax Cuts and Jobs Act.
In addition to the AGA and the Resort Association, the U.S. Travel Association and the American Hotel and Lodging Association support the measure.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
