The Casino Environment

Before the current economic downturn, professional casinos gathered at the very least $thirty billion in revenues every calendar year from 2005 via 2008.1 In the course of this time period, US on line casino homeowners constructed new services and expanded the size of their present services. As a result of the economic downturn, new US professional on line casino building has appear to a screeching halt and casino operators are now targeted on present facility value reduction.

The Part 179(D) Tax Provisions

More and more, casino operators are using benefit of the EPAct IRC section 179(D) business constructing power efficiency tax provisions, which have been extended by means of 2013. EPAct tax deductions are accessible for qualifying energy reductions in lighting, HVAC(heating, ventilation, and air conditioning), and creating envelope. (Constructing envelope consists of the building’s basis, walls, roof, home windows, and doors, all of which manage the movement of vitality between the interior and exterior of the developing.)

The Character of Casino Properties

Commercial casinos typically encompass resort resorts, which supply eye-catching deals of providers for their corporate and loved ones consumers. Casinos are specifically suited to EPAct due to the fact of their large gaming floors, hotel occupancy rooms, conference halls, and parking garages. Each and every of these attributes generally consumes massive sq. footage and the EPAct reward has a prospective for up to sixty cents for each square foot for every single of the a few actions explained earlier mentioned. Some of the smallest business casinos are about 50,000 square feet while most American casinos are generally more than a hundred,000 sq. toes. One particular of the largest ones, MGM Grand on the Las Vegas strip is nearly two million square ft. Lodges themselves are the most favored of Segment 179 creating group. (See “Hotels and Motels Most Favored Power Coverage Act Tax Homes”)

It is frequent to believe of business casinos as situated in two states Nevada and New Jersey. Whilst it is correct that these two states have the biggest business casino revenues, there are 12 states with commercial casinos in the United States, the other commercial on line casino states are: Colorado, Illinois, Indiana, Iowa, Louisiana, Michigan, Mississippi, Missouri, Pennsylvania, and South Dakota. Users of the American Gaming Association have publicized some of their commitments to vitality reduction. Reporting casinos consist of Boyd Gaming Company, Harrah’s Entertainment, Inc., and MGM Mirage. They have projects which consist of important vitality savings by way of cogeneration, ERV(energy recovery air flow), much more effective HVAC units, replacing incandescent lights with power productive lightings, home windows with vitality efficient day lighting techniques, photo voltaic thermal storage and several other strength saving initiatives.

The underlying rule established to qualify for the Section 179D lighting tax deduction helps make casinos and specifically casino hotels the most favored home classification for the tax incentive. The rule established calls for at minimum a twenty five% watts-per-square foot reduction as in comparison to the 2001 ASHRAE (American Society of Heating Refrigeration and Air Conditioning Engineers) constructing vitality code common. Complete tax deduction is achieved with a forty% watts-per-sq. foot reduction when compared to the ASHRAE 2001 common. The ASHRAE 2004 resort/motel constructing code standard requires forty% wattage reduction, which means that any lodge or motel lighting installation that meets that developing code necessity will instantly qualify for the highest EPAct tax deduction.

Occupancy Rooms

For most other creating classes, the Area 179D tax provisions need compliance with the bi-degree switching necessity. The comparison is always based mostly on wired fairly than plug-in lights. Casino resort occupancy rooms have a key gain in that they usually use plug-in lighting, and due to the fact these rooms purpose as hotel and motel spaces, they are exclusively excluded from the tax bi-degree switching need. Considering that occupant rooms are usually one particular of the greater spaces in lodge casinos, casinos are normally ready to use power efficient lighting to generate large EPAct tax deductions for the facility.

Again of the Home Areas

Casinos typically have massive kitchen, storage, and laundry (so named back again of the residence) areas that have historically employed T-twelve fluorescent lighting. This lighting is so energy inefficient when compared to present day lighting products that it will be illegal to manufacture in the United States after July one, 2010.4 When production of these prior generation lighting items ceases, the value of changing these inefficient bulbs will increase. Basically said, casinos must think about performing now to exchange these lights fixtures to help save each vitality and lamp substitution costs. The EPAct lights tax incentive can be used to tackle the chances related to these legally mandated merchandise adjustments

Ball Rooms, Banquet Rooms and Dining establishments

These regions of casinos have historically utilized designer variety lights that is power inefficient and usually very pricey to preserve and exchange. In certain, replacing bulbs and lamps in large ceilings is quite expensive since expensive cell hydraulic system tools have to be rented or acquired to manage the replacements. New lighting items and, in distinct, light-weight emitting diode (LED) products, use a fraction of the strength and have a a lot for a longer time valuable existence and are now becoming substituted. The blend of massive energy cost reduction, operating price reductions, utility rebates and EPAct tax deductions can tremendously improve the economic payback from these more costly lighting upgrades.

Parking Garages

Many casinos have big adjoining parking garages that can save significant energy expenses and generate big tax deductions by upgrading to strength productive fixtures. In Discover 2008-40 issued March seventh, 2008, the IRS announced that parking garages are a home course that is particularly entitled to use the EPAct tax deductions. Also, parking garages are excluded from the tax bi-degree switching requirement. Remember to see the September, 2008 Worldwide Parking Institute report devoted to parking garages EPAct lighting deduction tax options.five

Slot Machines and Gaming Floors

1 of the most significant vitality users on hotel gaming floors is slot devices. Although slotxo ended up early adapters of fluorescent technology, even these strength productive bulbs usually have to be modified 3 instances a 12 months simply because of 24/7 running several hours. Thanks to the large labor servicing costs, casino homeowners are now transitioning to LED engineering in their slot machines. LED’s, even though they have greater up entrance fees, have substantial power efficiency and much more time daily life cycle, providing substantial savings in labor and routine maintenance charges.


Casinos due to the fact of their normal 24 hour occupancy can achieve substantial power value personal savings from power successful HVAC programs. In particular, Nevada’s scorching weather more can make energy efficient HVAC a very worthwhile expenditure. The good news is. Nevada with the highest revenues from casinos has America’s second highest capability for vitality effectiveness through renewable geothermal power.six Certain groups of quite efficient HVAC investments will often qualify for the HVAC EPAct tax incentive like geothermal and thermal storage.

LEED Casinos

We count on to see more casinos obtain LEED position. (See LEED Creating Tax Chances Article7). In 2008, The Palazzo, Las Vegas Casino turned the largest LEED accredited building and a single of the very first licensed LEED casinos in the US.8 Casinos and resorts discover that specific types of repeated vacationers are really intrigued in staying in services that have obviously shown they are concentrated on the surroundings and sustainable layout. To turn into LEED certified, a on line casino have to have a building vitality simulation design produced by a competent engineer. Modeling is also needed for the EPAct, HVAC and Constructing Envelope tax deductions. Experienced tax specialists that know how to make the changes to change LEED personal computer designs to EPAct tax deduction designs can evaluate LEED versions and establish whether large tax deductions are possible. For illustration, a five hundred,000 square foot LEED on line casino that qualifies for the greatest EPAct tax deduction will get an quick tax deduction of $900,000 =(500,000*$one.eighty). On line casino proprietors who recognize the magnitude of these advantages can use the tax cost savings to aid justify the charges relevant to obtaining LEED position.


Casinos because of their massive subspaces are a favored constructing group beneath the EPAct industrial building tax deduction legislation. Property house owners who realize these chances can act throughout the recent financial downturn to enhance their facilities, reduce running fees and perhaps grow to be LEED certified facilities.


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