Small Casinos Can Now Get PPP Funds. The Race Is On

Situated on the southern shores of Devil’s Lake in North Dakota, Spirit Lake Casino and Resort employs over 350 people, 85 percent of whom are Native. The resort, owned by the Spirit Lake Nation, boasts a full-service marina. (Photo Courtesy Spirit Lake Casino Marketing) 

On Friday, the Trump Administration scrapped the rule preventing casinos from receiving loans under the Paycheck Protection Plan (PPP), a move that could bring huge benefits to Native communities that rely on gaming as a source of income. This change in the Small Business Administration (SBA) rules comes on the same day that Trump is signing into law the latest legislation addressing the COVID-19 crisis. The new round of available PPP dollars comes to $310 billion. Casinos were shut out of the previous package, which contained $350 billion in PPP loans, and which ran out in two weeks.

To qualify for a PPP loan through the SBA, a casino must (like any other business designated as “small”) meet the requirement of having 500 or fewer employees.

Getting a PPP loan has not been the smoothest process, and now casinos will be rushing to file their applications to get their share before the funds dry up again. Their competition will include some number of businesses that tried to get a PPP loan in the last go-round but were denied because of flaws in their application, and those who completed the application but didn’t get loans because the money ran out.

In other words, while there is a new round of funding, some unknown portion of that is effectively already spoken for.

But is it all gone? Possibly. Before the House voted to approve the bill on Thursday, Nick Simpson, a spokesman for the Consumer Bankers Association, told the Associated Press that “The majority if not all of the funding Congress is considering right now is already exhausted.” 

“SBA in their third interim final rule includes Tribal gaming,” Sean McCabe of McCabe CPA Group LLC and McCabe Consulting, remarked on Facebook Friday morning. “That money is going to go quick!!!” 

Even if there is much less money available, casinos, as well as small businesses who missed out on the first PPP package, should apply. If they don’t get funding this round, they will be in a better position should there be another one, as loans are awarded on a first-come, first-served basis. 

At least, that was the plan. The PPP has been criticized for favoring larger small businesses, and leaving the true mom-and-pop operations out in the cold. One explanation is that larger operations are better at filling out forms and working with lending institutions, and thus were fastest out of the gates. But critics have also charged that lenders have intentionally fast-tracked (or “front-loaded”) larger small businesses because there’s a bigger fee to collect, and to nurture relationships that may pay off later.

For casinos, well versed in filling out government forms, applying for the loans should be straightforward. In an acknowledgement that the truly small businesses did not get the fairest of shakes, this round of PPP funding has set aside $60 billion of the $310 billion total for community-based lenders, smaller banks and credit unions to assist smaller businesses.

Small businesses or small casinos, if they haven’t already, should contact a participating lender immediately.