WASHINGTON — The Trump administration eliminated a rule that denied small casinos access to $350 billion in funds allotted for small businesses shuttered by the coronavirus outbreak, just in time for an additional $310 billion in Paycheck Protection Program funds embedded in a bill signed by Trump on Friday.
As a result, small casinos and other gaming-related businesses with fewer than 500 employees will be eligible for PPP loans — a huge victory for the Nevada delegation, which objected when a decades-old Small Business Administration rule was applied to $350 billion in PPP loans to help all small businesses crippled by the pandemic.
Specifically, the rule denied PPP loans to small casinos and other businesses with fewer than 500 employees that made more than a third of their revenue from gambling.
When the Review-Journal asked President Donald Trump about the rule during an April 8 briefing, the president said he would look into the situation.
A week later, the administration changed the rule to allow casinos and other gambling businesses to qualify for the PPP loans if they earned half or less of their revenue from gambling, with a cap of $1 million.
It was a change that did not mollify lawmakers from Nevada, who continued to lobby for the rule to go.
When the Review-Journal asked Trump about the modest rule change during Sunday’s briefing, the president said that his administration was “continuing to look at the rule,” which is a “a big topic, got a lot of people involved.”
Friday with no fanfare, the SBA posted the new rule, which stipulates, “A business that is otherwise eligible for a PPP Loan is not rendered ineligible due to its receipt of legal gaming revenues.”
“It’s just been such a full-speed hike the whole time that I’m just relieved that we were able to get the right thing done,” Rep. Mark Amodei, the lone Republican in the Nevada delegation, told the Review-Journal.
When lawmakers were negotiating on the CARES Act to help businesses shuttered by the coronavirus, large casinos were intent on not being treated differently than other businesses, Amodei added. No one expected “this surprise thing from the SBA.”
“Small gaming has been doing fine without small-business loans for its entire existence,” said Amodei, but with Nevada Gov. Steve Sisolak ordering their shutdown, it was essential that taverns and small casinos be treated like any other business under the $2.2 trillion CARES Act.
Sens. Jacky Rosen and Catherine Cortez-Masto, D-Nev., led the delegation in a robust campaign to persuade the administration and congressional leaders to overrule the SBA action, which they argued violated the intent of the CARES Act.
“I promised Nevadans that we would get this fixed and today we made good on that promise. The Trump Admin’s attempt to prevent small gaming businesses from accessing grants and loans was foolish from the start. The employees at these small businesses can finally get some relief,” tweeted Rep. Dina Titus, the dean of the Nevada delegation.
The American Gaming Association applauded the move.
“I’m grateful to President Trump and his administration for recognizing that commercial and tribal gaming industry employees deserve the same support available to other small businesses, and for the significant, sustained efforts of members of Congress to amplify the need for changes to the guidelines to get small gaming operators and their employees through this challenging time,” AGA President Bill Miller said in a statement.
According to SBA, some 8,674 Nevada businesses have received roughly $2 billion from the first tranche of PPP loans.
Under the PPP program, the SBA will forgive loans “if all employees are kept on the payroll for 8 weeks and the money is used for payroll, rent, mortgage interest, or utilities.”
Amodei anticipated that some 50,000 jobs could be in play. His advice to Nevada businesses interested in PPP loans: “With what’s in the pipeline, that money’s going to be competitive so you need to be there right now.”