Arizona, New Mexico casinos facing economic turmoil might not be able to pay employees
Casinos operated by the Navajo Nation are facing a major cash shortage
Arizona’s casinos of the tribal nations are beginning to struggle with keeping enough cash to support an industry that has been essentially closed since March 17 due to the coronavirus pandemic. At least 1,000 people currently work for the Navajo Nation’s gambling enterprise, which has three casinos in northwestern NM and one east of Flagstaff, AZ. Despite the ongoing crisis brought by the pandemic, Navajo employees have been receiving their salaries during these past months. However, the enterprise has announced to its employees to start preparing for the possibility of not receiving any more paychecks while they are on administrative leave.
The final decision hasn’t been made yet and Navajo Nation Gaming Enterprise interim CEO Brian Parrish the company will decide on possible layoffs within the next week. Parrish added that the business is running low on cash reserves, so the risk of losing sustainability is now real. For now, Navajo has submitted a proposal to tribal leaders to negotiate a share of the federal virus relief money that fell in hands of the tribal government; however, tribal lawmakers are unlikely to make a quick decision on how to use those funds. It makes sense that the money should go toward paying salaries, at least a portion of it, as payroll expenses represent nearly 70% of the fixed costs that this company carries.
The enterprise has been receiving money from the federal Paycheck Protection Program, which covered employees for at least half of the 19 weeks in which casinos have been closed. The company did not provide details on how much money it received so far for this purpose, but, according to the US Treasury Department, it might have been somewhere between $4.7 million to $11 million coming from at least four loans.