Rounds seeking paycheck protection for tribal, Deadwood casino employees

April 4, 2020

 

 PIERRE—South Dakota U.S. Senator Mike Rounds today urged the Small Business Administration (SBA) and Treasury Department to allow gaming operations to participate in the newly-created Paycheck Protection Program (PPP). The PPP was part of the recently-passed CARES Act, which seeks to provide immediate, direct relief to all businesses and families impacted by the effects of COVID-19.

Currently, the SBA is not accepting PPP applications from gaming facilities, such as tribally-owned casinos and gaming operations in Deadwood, despite no specific statute in the CARES Act preventing them from doing so.

“As you move forward with the implementation of the CARES Act, it is imperative that every type of small business have the opportunity to seek funding under the newly-created Paycheck Protection Program (PPP),” wrote Rounds in the letter. “To that end, as your agencies implement the PPP, the Small Business Administration (SBA) and Department of the Treasury (Treasury) should affirm that businesses that receive income from legal gaming operations are eligible to apply for PPP loans, regardless of how much of their income can be attributed to gaming activity.”

“Leaving these types of small businesses out of important federal recovery efforts would prove to be crippling for South Dakota.”

 

 Full Text of the Letter:

 

The Honorable Jovita Carranza

Administrator

U.S. Small Business Administration

409 3rd Street, SW

Washington, DC 20416

 

The Honorable Steven Mnuchin

Secretary of the Treasury

U.S. Department of the Treasury

1500 Pennsylvania Avenue, NW

Washington, DC 20220

 

Dear Administrator Carranza and Secretary Mnuchin:

Thank you for your tireless and dedicated work to assist America’s small businesses during the COVID-19 pandemic. These are extraordinary times for our country and our economy. Small businesses represent 99 percent of all private businesses and nearly 60 percent of the workforce in South Dakota. Providing relief for each and every one of these businesses will be critical in the weeks and months ahead.

As you move forward with the implementation of the CARES Act, it is imperative that every type of small business have the opportunity to seek funding under the newly-created Paycheck Protection Program (PPP). To that end, as your agencies implement the PPP, the Small Business Administration (SBA) and Department of the Treasury (Treasury) should affirm that businesses that receive income from legal gaming operations are eligible to apply for PPP loans, regardless of how much of their income can be attributed to gaming activity.

Small businesses in the gaming industry create over 350,000 jobs in our country across 43 states. In my state, over 1,200 jobs can be directly attributed to the gaming industry in Deadwood, South Dakota, alone, with hundreds of additional jobs being created through tribal gaming enterprises. Leaving these types of small businesses out of important federal recovery efforts would prove to be crippling for South Dakota.

I understand that existing SBA policy as it relates to Economic Injury Disaster Loans (EIDL) under 13 C.F.R. § 123.301 prohibits any business that derives more than one-third of its gross annual revenue from legal gambling activities from applying for EIDL loans. However, the PPP is a totally new program that is separate and distinct from EIDL lending. Given the expansive nature of the PPP and the intent for every small business that wanted it to receive PPP assistance, it would make no sense to apply the one-third annual revenue from gambling threshold to small businesses under the PPP.

Furthermore, the intent of Congress to leave no small business out of the PPP is apparent in numerous parts of the bill. The legislation clearly states in Section 1102 under the heading “Increased Eligibility” that, “During the covered period, in addition to small business concerns, any business concern, nonprofit organization, veterans organization, or Tribal business concern described in section 31(b)(2)(C) shall be eligible to receive a covered loan” provided that the business employs not more than 500 workers. The legislation also allows tribal gaming concerns to receive assistance.

I commend your efforts to develop a critical program like the Paycheck Protection Program in as short of a timeframe as you have. As the SBA and Treasury begin to execute on your vital mission to provide relief for our nation’s small businesses, it is imperative that every small business – including those in the gaming industry – be eligible for assistance under the Paycheck Protection Program.