The On line casino Setting

Earlier than the latest financial downturn, industrial casinos collected no less than $30 billion in revenues every year from 2005 by 2008.1 Throughout this era, US on line casino homeowners constructed new amenities and expanded the dimensions of their current amenities. Because of the financial downturn, new US industrial on line casino development has come to a screeching halt and on line casino operators at the moment are centered on current facility value discount.

The Part 179(D) Tax Provisions

More and more, on line casino operators are benefiting from the EPAct IRC part 179(D) industrial constructing power effectivity tax provisions, which have been prolonged by 2013. EPAct tax deductions can be found for qualifying power reductions in lighting, HVAC(heating, air flow, and air con), and constructing envelope. (Constructing envelope consists of the constructing’s basis, partitions, roof, home windows, and doorways, all of which management the movement of power between the inside and exterior of the constructing.)

The Nature of On line casino Properties

Industrial casinos typically embody lodge resorts, which provide enticing packages of services for his or her company and family clients. Casinos are notably suited to EPAct due to their giant gaming flooring, lodge occupancy rooms, assembly halls, and parking garages. Every of those options usually consumes giant sq. footage and the EPAct profit has a possible for as much as 60 cents per sq. foot for every of the three measures described above. A few of the smallest industrial casinos are about 50,000 sq. ft whereas most American casinos are usually over 100,000 sq. ft. One of many largest ones, MGM Grand on the Las Vegas strip is sort of 2 million sq. ft. Lodges themselves are probably the most favored of Part 179 constructing class. (See “Lodges and Motels Most Favored Power Coverage Act Tax Properties”)

It’s common to consider industrial casinos as positioned in two states Nevada and New Jersey. Whereas it’s true that these two states have the most important industrial on line casino revenues, there are 12 states with industrial casinos in the USA, the opposite industrial on line casino states are: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pennsylvania, and South Dakota. Members of the American Gaming Affiliation have publicized a few of their commitments to power discount. Reporting casinos embody Boyd Gaming Company, Harrah’s Leisure, Inc., and MGM Mirage. They’ve initiatives which embody vital power financial savings through cogeneration, ERV(power restoration air flow), extra environment friendly HVAC models, changing incandescent lights with power environment friendly lightings, home windows with power environment friendly day lighting programs, photo voltaic thermal storage and quite a few different power saving initiatives.

The underlying rule set to qualify for the Part 179D lighting tax deduction makes casinos and notably on line casino motels probably the most favored property class for the tax incentive. The rule set requires no less than a 25% watts-per-square foot discount as in comparison with the 2001 ASHRAE (American Society of Heating Refrigeration and Air Conditioning Engineers) constructing power code customary. Full tax deduction is achieved with a 40% watts-per-square foot discount in comparison with the ASHRAE 2001 customary. The ASHRAE 2004 lodge/motel constructing code customary requires 40% wattage discount, which signifies that any lodge or motel lighting set up that meets that constructing code requirement will routinely qualify for the utmost EPAct tax deduction.

Occupancy Rooms

For many different constructing classes, the Part 179D tax provisions require compliance with the bi-level switching requirement. The comparability is at all times primarily based on wired moderately than plug-in lighting. On line casino lodge occupancy rooms have a significant benefit in that they typically use plug-in lighting, and since these rooms operate as lodge and motel areas, they’re particularly excluded from the tax bi-level switching requirement. Since occupant rooms are often one of many bigger areas in lodge casinos, casinos are usually in a position to make use of power environment friendly lighting to generate giant EPAct tax deductions for the ability.

Back of the House Areas

Casinos typically have giant kitchen, storage, and laundry (so referred to as again of the house) areas which have traditionally used T-12 fluorescent lighting. This lighting is so power inefficient in comparison with at this time’s lighting products that it will likely be unlawful to fabricate in the USA after July 1, 2010.four As soon as manufacturing of those prior technology lighting products ceases, the price of changing these inefficient bulbs will enhance. Merely acknowledged, casinos ought to take into account appearing now to interchange these lights to save lots of each power and lamp alternative prices. The EPAct lighting tax incentive can be utilized to deal with the alternatives associated to those legally mandated product adjustments

Ball Rooms, Banquet Rooms and Eating places

These areas of casinos have traditionally used designer sort lighting that’s power inefficient and infrequently very costly to keep up and exchange. Specifically, changing bulbs and lamps in excessive ceilings could be very pricey since costly mobile hydraulic platform gear should be rented or bought to deal with the replacements. New lighting products and, particularly, light emitting diode (LED) products, use a fraction of the power and have a for much longer helpful life and at the moment are being substituted. The mix of huge power value discount, working value reductions, utility rebates and EPAct tax deductions can significantly enhance the financial payback from these extra pricey lighting upgrades

Parking Garages

Many casinos have giant adjoining parking garages that may save substantial power prices and generate giant tax deductions by upgrading to power environment friendly fixtures. In Discover 2008-40 issued March seventh, 2008, the IRS introduced that parking garages are a property class that’s particularly entitled to make use of the EPAct tax deductions. Additionally, parking garages are excluded from the tax bi-level switching requirement. Please see the September, 2008 Worldwide Parking Institute article dedicated to parking garages EPAct lighting deduction tax alternatives.5

Slot Machines and Gaming Flooring

One of many largest power customers on lodge gaming flooring is slot machines. Though these have been early adapters of fluorescent expertise, even these power environment friendly bulbs usually must be modified three instances a 12 months due to 24/7 working hours. Because of the excessive labor upkeep prices, on line casino homeowners at the moment are transitioning to LED expertise of their slot machines. LED’s, whereas they’ve greater up entrance prices, have excessive power effectivity and for much longer life cycle, providing vital financial savings in labor and upkeep prices.


Casinos due to their typical 24 hour occupancy can obtain vital power value financial savings from power environment friendly HVAC programs. Specifically, Nevada’s sizzling local weather additional makes power environment friendly HVAC a really worthwhile funding. Happily. Nevada with the very best revenues from casinos has America’s second highest capability for power effectivity by renewable geothermal power.6 Sure classes of very environment friendly HVAC investments will typically qualify for the HVAC EPAct tax incentive together with geothermal and thermal storage.

LEED Casinos

We anticipate to see extra casinos receive LEED standing. (See LEED Constructing Tax Alternatives Article7). In 2008, The Palazzo, Las Vegas On line casino grew to become the most important LEED licensed constructing and one of many first licensed LEED casinos within the US.eight Casinos and motels discover that sure classes of frequent vacationers are very occupied with staying in amenities which have clearly demonstrated they’re centered on the atmosphere and sustainable design. To grow to be LEED licensed, a on line casino will need to have a constructing power simulation model created by a certified engineer. Modeling can also be required for the EPAct, HVAC and Constructing Envelope tax deductions. Certified tax consultants that know learn how to make the changes to transform LEED pc fashions to EPAct tax deduction fashions can consider LEED fashions and decide whether or not giant tax deductions are possible. For instance, a 500,000 sq. foot LEED on line casino that qualifies for the utmost EPAct tax deduction will obtain a right away tax deduction of $900,000 =(500,000*$1.80). On line casino homeowners who perceive the magnitude of those advantages can use the tax financial savings to assist justify the prices associated to reaching LEED standing.


Casinos due to their giant subspaces are a popular constructing class beneath the EPAct industrial constructing tax deduction laws. Property homeowners who perceive these alternatives can act throughout the present financial downturn to enhance their amenities, cut back working prices and doubtlessly grow to be LEED licensed amenities.