Nevada Stands to Win Big in $1.9T American Rescue Plan. Can It Help the Casinos?

Posted on: March 4, 2021, 11:45h. 

Last updated on: March 15, 2021, 08:43h.

Steve Bittenbender Read More
Expertise: Legislation, Sports Betting, Horse Racing.

The US Senate is expected to vote on the American Rescue Plan, a $1.9 trillion COVID-19 relief bill, by this weekend. Should it pass, Nevada stands to be a big winner. But what about the state’s struggling gaming industry?

Rescue Act
Pedestrians wearing masks walk along a less-crowded Las Vegas Strip during the COVID-19 pandemic. A new spending bill before Congress would give Nevada funding it may choose to use to revive its tourist economy. (Image: Daniel Slim/Getty)

The spending package includes $350 billion in direct aid to state, local, and county governments. Thanks to a formula that incorporates states’ unemployment rates in the allotment process, Nevada’s governments are currently projected to receive slightly more than $4 billion. That’s pending any possible adjustment the Senate may make to the bill.

According to a congressional analysis, Nevada stands to get $884 million more in funding than if the allocation was made simply by population. Only four states are expected to get a bigger increase than Nevada.

The legislation (HR 1319) gives governments four ways to use that funding, but some of those have latitude. Officials can use the funds to respond to the pandemic, cover its costs, or replace lost or diminished revenues. In addition, they can also allocate money to “address the negative economic impacts of such emergency.”

That’s where help for Nevada’s gaming industry may come into play. The bill, as currently written, would let Nevada and its municipalities use some of those funds to promote or spur visitors to flock to the its casinos and other attractions. More visitors not only would mean increased tax revenue, but it would also lead to more jobs.

Nevada Gets “Fair Share” in Rescue Plan

One of the lawmakers who was instrumental in getting the House to factor unemployment into state and local aid allocations was US Rep. Dina Titus, D-Nevada.

In a statement to Casino.org this week, she said the state has had one of the highest unemployment rates in the country. Yet state aid allocations in previous COVID relief bills did not account for that – or the impact that unemployment has on local economies.

The bill will provide Nevada and Clark County the flexibility we need to accelerate vaccine distribution, keep frontline workers on the payroll, and help get our economy back on track,” Titus said. “Under the American Rescue Plan, Nevada is finally getting its fair share.”

A main reason why Nevada’s unemployment rate became one of the nation’s highest were the furloughs and layoffs that occurred in the state’s gaming industry last year after Gov. Steve Sisolak shut down casinos and other businesses for months. Even as casinos began reopening in June, operations were and still continue to be limited.

Titus, whose district covers Las Vegas, also serves as the cochair for the Congressional Gaming Caucus and the Congressional Travel and Tourism Caucus. Besides working to get unemployment factored into the state and local allocations, she also got other funding set aside for communities dependent on tourism.

Another provision in the act sets aside $3 billion in “economic adjustment” aid. That funding will help communities across the country deal with various impacts from the pandemic. That provision includes $450 million in monies dedicated to localities enduring job losses because of reduced travel and tourism.

Projections as of Feb. 25. Figures rounded.

Gaming Industry Slumping Under COVID

As noted previously, one way state and local governments can use the direct aid is by replacing lost revenue. Nevada lost a significant amount of tax revenue last year due to COVID’s impact on the gaming and hospitality industries.

According to the Nevada Gaming Control Board’s Gaming Abstract, the state received $892.3 million in gaming taxes and license fees for the 2019 fiscal year. In 2020, it was nearly $200 million less. With the shutdown lasting 78 days, the state received just $694 million in taxes and fees.

The prospects for the 2021 fiscal year aren’t any more enticing. McCarran International Airport reported that passenger traffic in December 2020 was down more than 60 percent from the year prior. Hotel occupancy rates for that month were just 45.4 percent for the weekend and 25 percent for midweek.

Wait and See, For Now

Of the $4 billion projected to come to Nevada, about $3 billion is slated to go to the state. Five communities deemed metropolitan cities would share $285 million. The allocation for the counties is projected to be $597 million, while other smaller cities stand to receive $151 million.

Most of the metro and county funding would go to the Las Vegas area. The city itself is projected to get $131 million. Clark County, which has jurisdiction over the Las Vegas Strip, is scheduled to receive $440 million. Additional funding would also go to Henderson ($37 million) and North Las Vegas ($47 million).

Officials in Nevada’s metropolis are taking a wait-and-see approach for now, at least until the Rescue Plan becomes law.

“At this time, the city of Las Vegas continues to assess the full amount of eligible funding we are likely to receive from the federal government,” said David Riggleman, communications director for the city of Las Vegas, in a statement to Casino.org. “Once we have a more definitive view, the City Council will have the opportunity to make the final decisions on how those monies should be disseminated. Those final decisions are yet to be made.”

Clark County Senior Public Information Officer Stacey Welling told Casino.org that it’s too early to determine how county leaders will allocate the funding, since the bill is still making its way through Congress.

“We expect the final legislation may impose restrictions on how the funding is spent by local governments,” Welling said.