The economic stimulus bill, the constantly shifting behemoth that dominated national politics and national headlines for the past month, is finally in the books. Much already has been written – in these pages and others – about the victories for the gaming industry that appear in the bill. Provisions allowing companies to defer tax payments on income from the repurchase of debt and to deduct up to 50 percent of the cost of new equipment purchases or upgrades in the first year of service, are real wins – both for casino operators and equipment manufacturers.
Together, these provisions will add up to billions in savings for our companies, allowing the industry to better deliver on its promises to its employees, customers, shareholders and the communities where we operate. There still is much to be done before we emerge from this recession, but the stimulus should be hailed as a productive step forward.
The AGA and a coalition of industry representatives worked closely with members of Congress to ensure that the language in the stimulus bill was as inclusive of the industry as possible. Efforts to extend the cancellation of debt income provisions to cover more than just cash-for-debt transactions were particularly vigorous, and the Nevada congressional delegation played a major role in making sure the final language was most helpful to the industry.
Despite these victories, there were troubling incidents that occurred in the midst of the stimulus negotiations that signal there is still much work to be done to ensure members of Congress and the Administration understand the value of the gaming entertainment industry to the overall economic health of communities across the country.
A case in point was the noted exclusion of the gaming industry from the appropriations section of the stimulus bill. Both the House and Senate included the carve-out in their versions of the legislation, lumping casinos with aquariums, zoos, stadiums, museums and other venues deemed not worthy of receiving direct stimulus dollars. The language was eerily reminiscent of the exclusion of the industry from certain aspects of the Gulf Opportunity (GO) Zone legislation crafted in the wake of Hurricane Katrina. And while it could be said that we are keeping better company today – back then, the industry was lumped with massage and tattoo parlors and liquor stores – the fact that such an exclusion exists at all is troubling.
Even more troubling was the fact that several Senators from gaming states voted for the carve-out. Perhaps they understood that the gaming industry was not pursuing any specific appropriations funds in the package and figured the language would do no harm. In truth, it does not keep the industry from receiving benefits it otherwise would have. But the exclusion is far from harmless. It bolsters the perception that the industry somehow does not deserve the same benefits that other industries are privy to, despite the fact that gaming provides significant tax revenues and capital investment and directly employs more people than the U.S. automobile industry, software manufacturers or wireless phone carriers.
More evidence of the perception problem that still plagues the gaming industry was revealed in the final week of the stimulus negotiations, when President Obama admonished businesses for scheduling meetings in Las Vegas. The President’s comments set off a wave of cancellations, further depressing what already has been a dismal start to the year for the nation’s flagship gaming market.
In reality, more than 22,000 business events took place in Las Vegas last year, accounting for $8.5 billion in spending and directly sustaining more than 43,000 jobs. We all know Nevada is currently grappling with the nation’s highest foreclosure rate and a 9.1 percent unemployment rate – a substantial decline in business travel would put thousands more out of work.
And Vegas isn’t the only gaming jurisdiction that benefits from business travel. In Atlantic City, N.J., from January to November last year, 351,000 people attended meetings or conferences at the local convention center. They spent 134,000 nights in nearby hotel rooms and spent $167 million. Tunica, Miss. – a one-stoplight town before gambling was legalized – hosted nearly 4,000 meetings and conventions in 2007.
Even without the demonization of business travel, all evidence was pointing to an alarming decrease in corporate travel in 2009. Meeting Professionals International, a trade group, projects a 12 percent drop in conference attendance this year and a 9 percent decrease in off-site meetings and other corporate events.
There is no question that businesses should exercise spending restraint right now. In particular, companies that receive federal bailout funds should spend prudently. But making business travel for meetings and conventions the symbol of corporate misspending is putting at risk jobs and tax revenues that can stimulate the economy.
According to the U.S. Travel Association, of which the AGA is an active member, without the jobs generated by meetings, events and incentive travel, the current unemployment rate of 7.6 percent could rise to 8.2 percent and cost the average American household an additional $136 in taxes annually.
Clearly, these incidents reveal there is still much work to be done in Washington to change perceptions in Washington – both of the value of business travel and of the gaming industry as a whole. Exclusion of the gaming industry from future economic and business stimulus legislation cannot become a fait accompli. The AGA will be at the forefront of this effort, conducting targeted member education and outreach on Capital Hill and with senior administration officials. We also will continue to strengthen our partnerships with the broader travel and tourism industry, working together to promote and protect our common interests. For while the stimulus certainly is a step forward, there still is a long road ahead.