At the beginning of this week, the United States Small Business Administration (SBA) began taking loan applications from lenders as part of the Paycheck Protection Program’s (PPP) second phase. The relief program was approved by the federal government due to the coronavirus and was designed to help small businesses pay their employees while the economy is shut down. Over $300 billion was made available in the beginning, yet gaming venues were not able to participate.
With the new funding, a rule clarification was made to assist companies in the gaming industry, but the change came a little late for the Lakeside Inn and Casino in Nevada and it wouldn’t have worked anyway. A rejection notice was sent to the venue two weeks ago and the owners had to decide on what to do. They will now be forced to close.
Lack of Assistance:
The original SBA rules prohibited the Nevada property from filing a loan application because the company earned over one-third of its revenue from gaming. The SBA decided to follow an almost 25-year-old policy when creating the program, even though the loans were supposed to go to small businesses.
The rule change by the SBA allows some gaming companies to receive funding, but the Lakeside venue still fell short of qualifying. The SBA moved the rules to state that companies can make no more than $1 million in gaming revenues from 2019 and no more than 50% of income can come from gaming. The small casinos do not fall into that category.
For Lakeside to stay in business they needed to receive money this month. As the owner searched for help, it was revealed that it would most likely be at least next month before assistance could be provided.
The owner, Stacy Noyes, stated that the property will be sold. The area of the venue is one that focuses heavily on tourism so even if the casino could have stayed afloat a little bit longer, it would have most likely been forced to shut down due to lack of tourism due to the coronavirus.