Commercial Casinos Energy Policy Act Tax Opportunity

The Casino Environment

Before the recent economic downturn, commercial casinos collected at least $30 billion in revenues each year from 2005 through 2008.1 During this period, US casino owners built new facilities and expanded the size of their existing facilities. As a result of the economic downturn, new US commercial casino construction has come to a screeching halt and casino operators are now focused on existing facility cost reduction.

The Section 179(D) Tax Provisions

Increasingly, casino operators are taking advantage of the EPAct IRC section 179(D) commercial building energy efficiency tax provisions, which have been extended through 2013. EPAct tax deductions are available for qualifying energy reductions in lighting, HVAC(heating, ventilation, and air conditioning), and building envelope. (Building envelope consists of the building’s foundation, walls, roof, windows, and doors, all of which control the flow of energy between the interior and exterior of the building.)

The Nature of Casino Properties

Commercial casinos often encompass hotel resorts, which offer attractive packages of services for their corporate and family customers. Casinos are particularly suited to EPAct because of their large gaming floors, hotel occupancy rooms, meeting halls, and parking garages. Each of these features typically consumes large square footage and the EPAct benefit has a potential for up to 60 cents per square foot for each of the three measures described above. Some of the smallest commercial casinos are about 50,000 square feet while most American casinos are typically over 100,000 square feet. One of the largest ones, MGM Grand on the Las Vegas strip is almost 2 million square feet. Hotels themselves are the most favored of Section 179 building category. (See “Hotels and Motels Most Favored Energy Policy Act Tax Properties”)

It is common to think of commercial casinos as located in two states Nevada and New Jersey. While it is true that these two states have the largest commercial casino revenues, there are 12 states with commercial casinos in the United States, the other commercial casino states are: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pennsylvania, and South Dakota. Members of the American Gaming Association have publicized some of their commitments to energy reduction. Reporting casinos include Boyd Gaming Corporation, Harrah’s Entertainment, Inc., and MGM Mirage. They have projects which include significant energy savings via cogeneration, ERV(energy recovery ventilation), more efficient HVAC units, replacing incandescent lights with energy efficient lightings, windows with energy efficient day lighting systems, solar thermal storage and numerous other energy saving initiatives.

The underlying rule set to qualify for the Section 179D lighting tax deduction makes casinos and particularly casino hotels the most favored property category for the tax incentive. The rule set requires at least a 25% watts-per-square foot reduction as compared to the 2001 ASHRAE (American Society of Heating Refrigeration and Air Conditioning Engineers) building energy code standard. Full tax deduction is achieved with a 40% watts-per-square foot reduction compared to the ASHRAE 2001 standard. The ASHRAE 2004 hotel/motel building code standard requires 40% wattage reduction, which means that any hotel or motel lighting installation that meets that building code requirement will automatically qualify for the maximum EPAct tax deduction.

Occupancy Rooms

For most other building categories, the Section 179D tax provisions require compliance with the bi-level switching requirement. The comparison is always based on wired rather than plug-in lighting. Casino hotel occupancy rooms have a major advantage in that they often use plug-in lighting, and because these rooms function as hotel and motel spaces, they are specifically excluded from the tax bi-level switching requirement. Since occupant rooms are usually one of the larger spaces in hotel casinos, casinos are typically able to use energy efficient lighting to generate large EPAct tax deductions for the facility.

Back of the House Spaces

Casinos often have large kitchen, storage, and laundry (so called back of the house) spaces that have historically used T-12 fluorescent lighting. This lighting is so energy inefficient compared to today’s lighting products that it will be illegal to manufacture in the United States after July 1, 2010.4 Once manufacturing of these prior generation lighting products ceases, the cost of replacing these inefficient bulbs will increase. Simply stated, casinos should consider acting now to replace these lighting fixtures to save both energy and lamp replacement costs. The EPAct lighting tax incentive can be used to address the opportunities related to these legally mandated product changes

Ball Rooms, Banquet Rooms and Restaurants

These areas of casinos have historically used designer type lighting that is energy inefficient and often very expensive to maintain and replace. In particular, replacing bulbs and lamps in high ceilings is very costly since expensive mobile hydraulic platform equipment must be rented or purchased to handle the replacements. New lighting products and, in particular, light emitting diode (LED) products, use a fraction of the energy and have a much longer useful life and are now being substituted. The combination of large energy cost reduction, operating cost reductions, utility rebates and EPAct tax deductions can greatly improve the economic payback from these more costly lighting upgrades.

Parking Garages

Many casinos have large adjoining parking garages that can save substantial energy costs and generate large tax deductions by upgrading to energy efficient fixtures. In Notice 2008-40 issued March 7th, 2008, the IRS announced that parking garages are a property class that is specifically entitled to use the EPAct tax deductions. Also, parking garages are excluded from the tax bi-level switching requirement. Please see the September, 2008 International Parking Institute article devoted to parking garages EPAct lighting deduction tax opportunities.5

Slot Machines and Gaming Floors

One of the biggest energy users on hotel gaming floors is slot machines. Although these were early adapters of fluorescent technology, even these energy efficient bulbs normally have to be changed 3 times a year because of 24/7 operating hours. Due to the high labor maintenance costs, casino owners are now transitioning to LED technology in their slot machines. LED’s, while they have higher up front costs, have high energy efficiency and much longer life cycle, offering significant savings in labor and maintenance costs.

HVAC

Casinos because of their typical 24 hour occupancy can achieve significant energy cost savings from energy efficient HVAC systems. In particular, Nevada’s hot climate further makes energy efficient HVAC a very worthwhile investment. Fortunately. Nevada with the highest revenues from casinos has America’s second highest capacity for energy efficiency through renewable geothermal energy.6 Certain categories of very efficient HVAC investments will often qualify for the HVAC EPAct tax incentive including geothermal and thermal storage.

LEED Casinos

We expect to see more casinos obtain LEED status. (See LEED Building Tax Opportunities Article7). In 2008, The Palazzo, Las Vegas Casino became the largest LEED certified building and one of the first certified LEED casinos in the US.8 Casinos and hotels find that certain categories of frequent travelers are very interested in staying in facilities that have clearly demonstrated they are focused on the environment and sustainable design. To become LEED certified, a casino must have a building energy simulation model created by a qualified engineer. Modeling is also required for the EPAct, HVAC and Building Envelope tax deductions. Qualified tax experts that know how to make the adjustments to convert LEED computer models to EPAct tax deduction models can evaluate LEED models and determine whether large tax deductions are probable. For example, a 500,000 square foot LEED casino that qualifies for the maximum EPAct tax deduction will receive an immediate tax deduction of $900,000 =(500,000*$1.80). Casino owners who understand the magnitude of these benefits can use the tax savings to help justify the costs related to achieving LEED status.

Conclusion

Casinos because of their large subspaces are a favored building category under the EPAct commercial building tax deduction legislation. Property owners who understand these opportunities can act during the current economic downturn to improve their facilities, reduce operating costs and potentially become LEED certified facilities.

 

Live Dealer Casinos – A Fad Or the Future?

There have been online casinos around for a long time, with each of them offering various versions of roulette, blackjack, baccarat, and poker with random number generators. With the evolution of new technologies, casinos now have the ability to offer games with real dealers in a live casino environment. This new ability has all of us looking at online casinos and wondering if the new live dealer casinos are fads or the future of online casinos.

There are a lot of advantages to playing roulette or blackjack in a live dealer casino. One of the most important advantages is the social networking that can be made through chatting with the dealers or the other players. This kind of interaction can’t be found while playing RNG games, and will only be found either playing in a brick and mortar casino or in an online live dealer casino. It is always nice to join a game and have the dealer greet you by name, or to be able to converse with the other players at the table.

Another great advantage to the live dealer casinos is the ability to see the game as it is being played real time. You can watch as the cards are being shuffled and dealt when playing live blackjack, or watch as the roulette wheel spins and the number comes up when playing live roulette. Real people are dealing the cards or spinning the roulette wheel, real people that you can see and hear. When you have the ability to watch these actions, it means that you can be sure that the final result is authentic. I don’t know about you, but I find it comforting to watch to roulette ball as it drops into the number wheel, and then hear the croupier call out the number, as it is happening.

Some casinos, such as LuckyLive Casino or DublinBet Casino, have cameras set up in real brick and mortar casinos, like the FitzWilliam Club in Dublin, Ireland. The dealers at these casinos work for the casinos and are filmed live as they are working. You will see other players at the roulette table or sitting at the blackjack table, and you can hear the noise of the live casino in the background. This feed is then streamed into your computer through software, such as Distance Gaming Software. The images that you see on your computer are real time, with virtually no lag time whatsoever.

There are some casinos, such as Celtic Casino or Europa Casino, that film the games from a studio with live dealers in a casino setting. Since this is all filmed in a studio, there won’t be any of the background noise that you will find at other live dealer casinos. Although the dealers are in a studio environment, you can rest easy that all of the dealers are thoroughly trained to the standards of the dealers who work in Las Vegas or Monte Carlo. They are all professional, courteous, and extremely competent casino dealers.

Whether you decide to play in a live dealer casino that is filmed from a real brick and mortar casino or from a studio, you will find the same level of professionalism that you will find at any casino around the world. The graphics are excellent and the technology just keeps getting better. You will find casinos that do not require any download, and some live dealer casinos offer instant flash casinos which can be played almost immediately. One thing that all of the live dealer casinos can offer is the realistic experience of playing at a live casino without leaving the comfort of your own home. So, grab a beverage of your choice and play some live roulette or live blackjack in one of the new live dealer casinos. You won’t be disappointed. Good luck to you!

 

6 Tips to Help You Choose the Best Online Casino

Online casinos are quite popular these days. Although online gambling provides a lot of opportunities for gamblers across the globe, there can be some disadvantage to it. For example, many of these platforms are scams. If you want to be on the safe side, we suggest that you consider the tips given below. With these tips on your mind, it will be a lot easier for you to choose the best place.1. Country Availability Before you choose an online casino, you may want to find out if they accept players from your country. The reason is that some countries have strict restrictions on gambling practices. Therefore, you may want to find out about the country availability. If your country or state does not allow online gambling, you simply cannot gamble online.2. Check the License Information Another important thing to consider is to find out if the online casino is licensed. Casinos that are registered can be trustworthy as they are regulated by the concerned authorities. So, they won’t engage in illegal practices. You can check their licensing certificates on their websites.3. Run a Background Check Apart from checking the licensing information, you may want to do your research to find out about the practices of the place. For example, you may want to find out about their bonus policies, and the games they offer. You may want to be aware of fake online casinos. These platforms provide unlicensed games and don’t allow winners to take out more than 10% of the amount won. Therefore, you may want to read online reviews while running a background check.4. Deposit and Withdrawal Fees Before placing your bet on a web-based casino, we suggest that you take into account their withdrawal and deposit fees. You may want to reconsider your decision if their withdrawal fees are too high. Apart from this, you may also want to consider the time they take to release the amount withdrawn.5. Mobile Friendly Website Today, almost everyone has a smartphone, and most users play their favorite games online. According to statistics, around 60% of buyers order their desired products online. Therefore, you may want to make sure that the casino you are going to choose has an app that supports smartphones. Even if they don’t have a mobile supported app, they should have a website that is mobile-friendly.6. User-Friendly Layout Reputable online casinos always keep their website updated. They add new graphics, layouts, and user-friendly colors, and other options. If the one you are going to choose does not maintain their website, you may want to keep looking for a better one.ConclusionLong story short, we suggest that you consider the 6 tips given in this article if you want to choose the best online casino. With these tips on your mind, it will be a lot easier for you to make the best choice.