Professional Casino Energy Plan Action Tax Opportunity

The Casino Environment

Before the recent financial downturn, business casinos collected at the very least $thirty billion in revenues every single year from 2005 by means of 2008.1 In the course of this period of time, US casino house owners developed new amenities and expanded the measurement of their existing services. As a result of the economic downturn, new US industrial on line casino development has appear to a screeching halt and casino operators are now focused on existing facility cost reduction.

The Segment 179(D) Tax Provisions

Ever more, casino operators are having advantage of the EPAct IRC segment 179(D) industrial constructing vitality performance tax provisions, which have been extended through 2013. EPAct tax deductions are accessible for qualifying energy reductions in lighting, HVAC(heating, air flow, and air conditioning), and building envelope. (Constructing envelope consists of the building’s foundation, walls, roof, windows, and doors, all of which manage the flow of vitality among the inside and exterior of the building.)

The Mother nature of On line casino Homes

Commercial casinos often encompass hotel resorts, which offer you attractive offers of providers for their company and loved ones clients. Casinos are especially suited to EPAct because of their large gaming flooring, resort occupancy rooms, conference halls, and parking garages. Each and every of these characteristics normally consumes massive square footage and the EPAct advantage has a possible for up to 60 cents for every square foot for each and every of the 3 actions described earlier mentioned. Some of the smallest professional casinos are about fifty,000 square feet while most American casinos are normally above one hundred,000 square toes. One particular of the largest kinds, MGM Grand on the Las Vegas strip is nearly 2 million sq. ft. Hotels themselves are the most favored of Segment 179 building group. (See “Resorts and Motels Most Favored Vitality Plan Act Tax Properties”)

It is common to think of industrial casinos as positioned in two states Nevada and New Jersey. While it is accurate that these two states have the greatest industrial on line casino revenues, there are twelve states with professional casinos in the United States, the other industrial on line casino states are: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pennsylvania, and South Dakota. Customers of the American Gaming Affiliation have publicized some of their commitments to strength reduction. Reporting casinos incorporate Boyd Gaming Company, Harrah’s Leisure, Inc., and MGM Mirage. They have tasks which incorporate important energy personal savings via cogeneration, ERV(vitality recovery air flow), far more productive HVAC models, changing incandescent lights with strength successful lightings, windows with strength effective working day lights techniques, solar thermal storage and several other power conserving initiatives.

The fundamental rule set to qualify for the Segment 179D lighting tax deduction can make casinos and especially on line casino hotels the most favored residence group for the tax incentive. The rule established demands at least a twenty five% watts-for every-square foot reduction as in comparison to the 2001 ASHRAE (American Modern society of Heating Refrigeration and Air Conditioning Engineers) developing strength code common. Entire tax deduction is reached with a 40% watts-for each-sq. foot reduction when compared to the ASHRAE 2001 standard. The ASHRAE 2004 resort/motel creating code standard needs 40% wattage reduction, which indicates that any lodge or motel lights set up that meets that building code requirement will immediately qualify for the highest EPAct tax deduction.

Occupancy Rooms

For most other building types, the Section 179D tax provisions demand compliance with the bi-level switching necessity. The comparison is always primarily based on wired relatively than plug-in lights. Casino resort occupancy rooms have a major edge in that they often use plug-in lighting, and due to the fact these rooms operate as hotel and motel spaces, they are particularly excluded from the tax bi-amount switching prerequisite. Because occupant rooms are generally one particular of the more substantial spaces in hotel casinos, casinos are generally capable to use energy successful lights to generate large EPAct tax deductions for the facility.

Back again of the Home Spaces

Casinos typically have huge kitchen area, storage, and laundry (so called again of the house) areas that have traditionally used T-twelve fluorescent lights. This lights is so power inefficient in comparison to present-day lighting merchandise that it will be illegal to manufacture in the United States after July one, 2010.4 As soon as production of these prior generation lighting goods ceases, the value of replacing these inefficient bulbs will improve. Merely mentioned, casinos must consider acting now to substitute these lighting fixtures to preserve equally strength and lamp replacement costs. The EPAct lights tax incentive can be employed to handle the opportunities relevant to these legally mandated solution alterations

Ball Rooms, Banquet Rooms and Dining places

These locations of casinos have historically utilized designer sort lighting that is energy inefficient and often extremely pricey to keep and change. In particular, replacing bulbs and lamps in substantial ceilings is quite costly considering that costly mobile hydraulic system products need to be rented or purchased to manage the replacements. New lighting merchandise and, in specific, gentle emitting diode (LED) merchandise, use a portion of the power and have a considerably more time beneficial existence and are now currently being substituted. The combination of massive energy price reduction, running expense reductions, utility rebates and EPAct tax deductions can tremendously increase the financial payback from these a lot more costly lights upgrades.

Parking Garages

Numerous casinos have big adjoining parking garages that can conserve substantial power fees and create huge tax deductions by upgrading to strength efficient fixtures. In Notice 2008-40 issued March 7th, 2008, the IRS declared that parking garages are a residence course that is specifically entitled to use the EPAct tax deductions. Also, parking garages are excluded from the tax bi-amount switching prerequisite. Please see the September, 2008 Intercontinental Parking Institute write-up devoted to parking garages EPAct lights deduction tax chances.5

Slot Machines and Gaming Flooring

1 of the most significant power consumers on hotel gaming flooring is slot equipment. Though sexy gaming had been early adapters of fluorescent technology, even these power efficient bulbs usually have to be changed three occasions a year due to the fact of 24/seven working hours. Owing to the high labor servicing expenses, casino homeowners are now transitioning to LED technologies in their slot devices. LED’s, whilst they have higher up front costs, have large power efficiency and a lot longer lifestyle cycle, providing considerable financial savings in labor and routine maintenance charges.


Casinos because of their common 24 hour occupancy can attain considerable power value savings from strength productive HVAC programs. In distinct, Nevada’s sizzling local climate further helps make strength efficient HVAC a really worthwhile expense. Fortunately. Nevada with the maximum revenues from casinos has America’s second greatest ability for energy performance via renewable geothermal strength.six Particular categories of really efficient HVAC investments will frequently qualify for the HVAC EPAct tax incentive like geothermal and thermal storage.

LEED Casinos

We count on to see more casinos receive LEED standing. (See LEED Developing Tax Options Article7). In 2008, The Palazzo, Las Vegas On line casino turned the greatest LEED licensed developing and one particular of the very first licensed LEED casinos in the US.8 Casinos and hotels uncover that certain types of regular tourists are very interested in keeping in amenities that have evidently demonstrated they are focused on the surroundings and sustainable layout. To become LEED accredited, a casino need to have a creating power simulation model designed by a certified engineer. Modeling is also required for the EPAct, HVAC and Building Envelope tax deductions. Experienced tax experts that know how to make the changes to change LEED pc designs to EPAct tax deduction designs can consider LEED types and figure out no matter whether huge tax deductions are possible. For case in point, a five hundred,000 sq. foot LEED on line casino that qualifies for the greatest EPAct tax deduction will get an quick tax deduction of $900,000 =(five hundred,000*$1.eighty). On line casino owners who recognize the magnitude of these advantages can use the tax savings to support justify the costs relevant to attaining LEED status.


Casinos simply because of their large subspaces are a favored creating group beneath the EPAct business developing tax deduction laws. Home proprietors who comprehend these chances can act for the duration of the present economic downturn to increase their facilities, reduce working charges and perhaps grow to be LEED certified amenities.