Grand Falls Casino makes its money on people who either don’t understand or care about math. You might think Grand Falls Casino management has caught its customers’ mathematical infacility: the Larchwood entertainment complex is paying nearly 500 employees nearly $22 million for six weeks of zero work:
“We closed at 5:00 p.m. on March 16, we did that voluntarily and then the governor closed casinos a few hours later on March 17,” Grand Falls General Manager Sharon Haselhoff said.
…“That first communication we did with our employees was to let them know that we were going to pay them through the end of March. Then the next communication was that we would pay them through April 14, then over the weekend we let them know that we would pay them through the end of April,” Haselhoff said.
…At Grand Falls Casino the total payroll price tag for these three pay periods of closures is roughly $2.2 million. Their owners, Elite Casino Resorts, are also paying all of the employees at their two other locations in Riverside and Davenport, Iowa as well [Bridget Bennett, “Grand Falls Casino Continues Full Pay for All Employees,” KELO-TV, 2020.04.06].
Deadwood casinos must not be saving up the kinds of funds their Iowa competitors can:
Mike Rodman, executive director of the Deadwood Gaming Association, said many of the 1,200 people in Deadwood who work in the gambling industry are out of work, and much of the industry’s $900,000 weekly payroll is going unpaid [Seth Tupper, “Deadwood Casinos Deemed Ineligible for Emergency Payroll Loans,” SDPB, 2020.04.06].
Grand Falls and other casinos cannot qualify for Payroll Protection loans from the CARES/coronavirus relief act: as SDPB reports, Small Business Administration rules prevent loans to “businesses that make more than a third of their revenue from gambling.” Senator Marion Michael Rounds says he’s trying to get the SBA to reïnterpret that rule, but Grand Falls has no guarantee it will see federal aid to support or pay back the community spirit it is demonstrating toward the laborers who make its wealth possible.
Apparently lacking similar decency and cash reserves are the hotels and resorts owned by a man elected to the White House because of his alleged business acumen. The Trump Organization has laid off hundreds of workers and skipped rent payments and is trying to delay its loan payments to Deutsche Bank (even as he tries to inflate the stock price of a company in his portfolio that produces a drug that may or may not fight coronavirus).
Before we start shaming the Deadwood Gaming operators for not being able to pay all staff during the suspension of business we should compare the revenues of the two markets in question.
At Grand Falls there are 718 slot machines reporting revenue in February 2020, each earning $242 per day in win. In all of Deadwood there are 2,761 slot machines reporting revenue in February, each of those earning $87 per day. As you can see there is a very large disparity in revenue between Iowa gaming establishments and Deadwood Casinos. There will be casinos in Deadwood that probably wont survive this calamity, let alone pay for furloughed workers.
https://irgc.iowa.gov/sites/default/files/documents/2020/03/february2020.pdf
https://dor.sd.gov/media/ckmdgvtn/february-2020-stats.pdf
Deadwood slots earn $66,451/day more than Grand Falls, using TimA’s numbers. Certainly the Deadwood Gaming owners, and Lawrence County, should be able to do far more than what they are doing to assist the gaming workers through this pandemic transition.
It’s a darn shame that casinos in the Black Hills, a vacation destination area, a place that should be able to draw far more traveling high-rollers for a lengthy and lucrative (for the casinos) stay, can’t make the kind of money that allows them to support their workers as much casinos operating in boring old Iowa. Sounds like someone’s business model is not operating on all cylinders.
The population of the surrounding areas is a difference maker when looking at casino revenues. When Grand Falls has the Sioux Falls metro and surrounding areas to draw from its a competitive advantage. Yes, the Black Hills is a tourist destination that does draw gamblers from all over, but a consistent local population will always be better for producing consistent revenue.
Gaming revenue in Deadwood is just a speck compared to surrounding jurisdictions. It has nothing to do with a bad business model.
One fact from that KELO story about Grand Falls stuck out to me: “I think the big difference is you know we’re a local company and we have local representation on our board of directors.” This community is making decisions to help the community and is able to do so because it has empowered that philosophy through board or director representation. We need FAR more of this stakeholder capitalism instead of the obscene profit-only shareholder capitalism.
Elizabeth Warren has spoken to the power of putting workers on corporate boards to shift the perspective more toward stakeholder from shareholder. Would businesses be putting workers on the streets during a pandemic if the workers were part of making that decision?
Could South Dakota eventually build a casino at I 29 and I 90, employ lots of people and keep the money here.Unless we go into a depression.I remember that was a good idea in the election.But hear the sucking sound going east out of Sioux Falls.Whivh Gov did not want that.