A handful of companies in the casino and racing industry, led by the New York Racing Association, were among a lengthy list of recipients that received approval for loans of at least $5 million through the federal government’s Paycheck Protection Program (PPP), according to data released by the U.S. Small Business Administration.
In total, companies in the gaming space represented a small sliver of the near 700,000 businesses granted approval for loans under the SBA’s $660 billion program.
The New York Racing Association (NYRA), a not-for-profit corporation that operates the three largest thoroughbred racetracks in the Empire State, received approval for a loan in the range of $5 million to $10 million, the maximum loan amount allowed under the program.
Two other prominent companies — Sandia Resort & Casino in Albuquerque, N.M.; and Majestic Star Casino, LLC in Gary, Ind. — had loans approved in the category. It is unclear if any of the companies sought loans for the maximum allowable sum of $10 million based on the data released by the SBA.
A third, Oyo Hotels Inc., appeared to apply for a PPP loan, according to the SBA database, but decided to withdraw their application, company representatives said.
Business Receiving $5-$10 Million In PPP
|Majestic Star Casino||Gary, IN||Centier Bank|
|Sandia Casino||Albuquerque, NM||BOKF, NA|
|New York Racing Association, Inc.||Ozone Park, NY||TD Bank, NA|
Sandia Casino, the largest tribal casino in New Mexico, has remained closed since mid-March. With an expansive casino floor of approximately 140,000 square feet, a spa, and an 18-hole championship golf course ranked as one of the Top 100 resort courses in the nation by Golfweek Magazine, the resort is viewed as a preferred destination for locals and tourists alike. While the golf club reopened last month, the casino itself remained shuttered for the Fourth of July holiday.
Although the casino recently announced a series of enhancements scheduled for the fourth quarter of 2020, Sandia has not yet set a target date for reopening. At the height of the COVID-19 pandemic, every tribal casino across the state shut its doors for a considerable period during the spring. Casino gaming is a robust business in New Mexico, providing the state’s 14 tribes with about $820 million in annual revenue, the Associated Press reported.
A group of nearly three dozen other casino and racing businesses nationwide gained approval for loans in the range of $2 million to $5 million under the program. As tribal casinos in the state of Washington negotiate with the state gaming commission on the prospect of receiving sportsbook licensure, the Tulalip Tribes of Washington is one of four tribes that have met with state officials in attempts to enter the Washington sports betting market. The Tulalip Resort Casino in Marysville, Wash., could use a portion of its loan to jumpstart sportsbook operations in the casino outside Seattle.
Another Seattle-area tribal group, the Puyallup Tribe of Indians, has either furloughed or laid off approximately 85% of its employees at two local casinos, according to the Associated Press. The job cuts underscore the economic distress that casinos in Washington, and the nation as a whole, have encountered during the pandemic.
Businesses Receiving $2-$5 Million In PPP
|Sky Ute Casino Resort||Ignacio, CO||Native American Bank, NA|
|Grand Falls Casino Resort, LLC||Larchwood, IA||Wells Fargo Bank, NA|
|Casino Queen Inc.||East St. Louis, IL||Citizens Bank, NA|
|Ojibwa Casinos||Baraga, MI||Superior National Bank & Trust Company|
|4 Bears Casino & Lodge||New Town, ND||Cornerstone Bank|
|Dakota Magic Casino||Hankinson, ND||Great Plains Bank|
|Prairie Knights Casino||Fort Yates, ND||Starion Bank|
|Sky Dancer Resort and Casino||Belcourt, ND||Turtle Mountain State Bank|
|Golden Gate Casino, LLC||Las Vegas, NV||Western Alliance Bank|
|Plaza Hotel & Casino, LLC||Las Vegas, NV||Western Alliance Bank|
|Tuscany Hotel & Casino, LLC||Las Vegas, NV||Meadows Bank|
|Commanche Nation Casino||Lawton, OK||Arvest Bank|
|Tulalip Resort Casino||Marysville, WA||Washington Trust Bank|
|South Florida Racing Association, LLC||Hialeah, FL||Wells Fargo Bank, NA|
|Del Mar Thoroughbred Club||Del Mar, CA||Bank of America, NA|
A litany of casinos from both Nevada and North Dakota dominated the category, with at least four from each state. The Golden Gate Casino and the Plaza Hotel & Casino, both located in Downtown Las Vegas, are among the casino resorts that sought assistance. The Nevada casino industry suffered a setback on Thursday night when Gov. Steve Sisolak announced the imminent closure of bars in certain counties, as of 11:59 p.m. July 10.
Right now, our HHS teams are confirming the criteria that would designate a county in Nevada as a hotspot. Tomorrow, I will be releasing that criteria and the names of the counties that will be required to close bars tomorrow at 11:59pm, per this directive.
— Governor Sisolak (@GovSisolak) July 10, 2020
Oyo Hotels is the parent company of the Oyo Hotel & Casino, located just off the Las Vegas Strip. Formerly known as the Hooters Casino Hotel, the Vegas property rebranded as the Oyo in September 2019.
OYO was erroneously listed as a company that received a PPP Loan in the US. We did not receive a PPP Loan. We decided as a company to withdraw our application as we did not want to divert critical funding from small and local businesses, like our hotel partners.
— OYO USA (@oyoamerica) July 13, 2020
Racing industry receives a boost
In many respects, the U.S. thoroughbred racing industry has managed to survive despite the widespread disruptions to live racing throughout the nation. During the month of June, wagering on U.S. races eclipsed $998.4 million, according to figures from Equibase, a year-over-year increase of 0.76% from June 2019. The slight bump came despite significant declines in U.S. race days, purse sizes, and the total number of races, as the majority of tracks hold racing without fans in the stands.
When Tiz the Law captured the Belmont Stakes on June 20, it marked the first time in more than 150 years that the prestigious Triple Crown race was held without spectators. By comparison, an announced crowd of 90,327 packed the stands for the 2018 rendition when Justify became the 13th horse in U.S. thoroughbred history to win the Triple Crown.
There are no indications that Saratoga Race Course will allow fans to enter the gates when the historic track opens its 2020 summer meet on July 16. In 2019, paid attendance at Saratoga topped 1.05 million, representing the fifth straight year gate attendance at the track cleared the 1 million barrier.
Saratoga charged $7 for general and grandstand admission last season on most race days, as well as $10 for clubhouse admission.
“While this will be anything but a traditional Saratoga season, we hope to provide a semblance of normalcy for both the local community as well as racing fans across the country,” NYRA President and CEO Dave O’Rourke said in a statement.
Finishing touches pic.twitter.com/YZi41O5m7y
— Mark Struffolino (@MarkStruffolino) July 10, 2020
Other racing entities opted to tap the loan program for financial assistance. Another East Coast organization, the South Florida Racing Association LLC, received approval for a loan in the $2 million to $5 million category. In California, the Del Mar Thoroughbred Club also qualified for a loan in the range of $2 million to $5 million. The 2020 Del Mar summer meet, which begins on Friday, is highlighted by the $1 million Pacific Classic on Aug. 22.
A host of top trainers also received loan approval (see below) for funding their respective barns.
- Todd A. Pletcher Racing Stables, Inc.: $1 million to $2 million
- Bob Baffert Racing Inc.: $350,000
- Doug O’Neill Racing Stables Inc.: $350,000
- John W. Sadler Racing Inc.: $350,000
- Art Sherman Racing Stable Inc.: $150,000
- Claude R. McGaughey III Racing Stable Inc.: $150,000
Originated by third-party lenders, the loans carry a fixed interest rate of 1% for a two- or five-year term. A portion of the loans, or even the full amount, could be forgiven if the proceeds are used for employee pay, utilities, rent, and interest on mortgage payments, among others.
The SBA, in conjunction with the U.S. Treasury Department, determined that the designation of a low interest rate was necessary to allow businesses to meet “eligible payroll costs” and other expenses brought about by the COVID-19 economic crisis.
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