US ‘Child Care Cliff’ Could Devastate Casinos’ Workforces

Gambling companies operating in the regulated space in the United States are facing a legitimate threat to the health of their workforces. They can either let the “child care cliff” tear holes in their labor supplies or they can turn the oncoming threat into a rare opportunity.

Companies in other industries have already demonstrated how casinos can set themselves apart, invest in their own futures and improve their bottom lines by taking action connected to child care benefits. Time is of the essence for gaming licensees to act on this chance.

The drop off the cliff is now just days away. It isn’t too late for casinos to mitigate the potential impact to their businesses, though.

Child care cliff has serious implications for US economy

For those unfamiliar with the term, the child care cliff refers to the looming end of enhanced US government subsidies for child care expenses. In 2021, Congress invested billions in improved child care subsidies. Those programs end on Sept. 30, 2023.

The most authoritative research on the potential impact of this change comes from The Century Foundation. The Century Foundation says that after Sept. 30:

• More than three million children currently receiving some form of care will lose access to that care;
• 232,000 people currently working in child care will lose their jobs;
• More than 70,000 programs currently providing care to children will close.

That’s all besides the larger economic cost of a widespread loss of child care. The Century Foundation also states that “the loss in tax and business revenue will likely cost states $10.6 billion in economic activity per year.”

The ripple effect is not complicated. If casinos somehow believe their businesses and workforces won’t be affected, there is some oceanfront property in Iowa that is available for them to purchase.

Why the child care cliff will impact US casinos

The US casino industry is likely not in an enviable position to ride out this crisis unbothered. While data on what percentage of the gambling industry’s workforce parents represent are scant, there’s no reason to believe it’s wildly different from national statistics.

In the latest US Census, the estimate of adults living with their own children under the age of 18 sat at 40%. It’s possible that for gambling industry workers, that percentage could be higher. Thus, it’s likely that the anticipated cuts in child care access will have an impact on casinos.

Even if casinos are somehow able to insulate their own workforces from this crisis, there’s the impact on their customers. Missing work to provide care for children translates to lost wages. Lost wages result in less expendable income.

Among the first cuts people make in response to a drop in expendable income is to their entertainment budgets. It’s a snowball effect that threaten both the bottom line and workforce of casinos in the US.

Yet, as some of those businesses have already shown, casinos and other gambling companies don’t have to just idly brace for the worst. They can take action to mitigate the damage. Moreover, they can actually turn the child care cliff into a golden opportunity.

Corporations taking the lead

Companies across many industries are taking matters into their own hands when it comes to providing for workers’ child care needs. In May, Just Capital profiled three prominent corporations it ranked highly in terms of child care benefits they provide to workers.

The companies, Eli Lilly, Intuit and US Bancorp all provide workers with:

• A minimum of 16 weeks of paid parental leave for primary caregivers plus at least 10 weeks of paid leave for secondary caregivers;
• At least eight days of paid sick leave;
• Backup dependent care;
• Flexibilities in schedules to allow for child care needs;
• Subsidies for child care expenses.

New York’s Early Care & Learning Council also highlighted how the SAS Institute tackles the issue. That organization offers on-site child care and access to two nearby Bright Horizons Centers as well.

Larger corporations aren’t the only ones taking action, either. In March, Erik Gunn of the Wisconsin Examiner profiled how a food packer with 9,000 employees rolled out a child care subsidization benefit.

As data from that council and other research show, these investments are not a heavy burden that corporations are carrying out of a sense of altruism or obligation. In reality, they are cost-saving measures.

Child care benefits help companies improve profit margins

Research from both the Early Care & Learning Council and The Marshall Plan for Moms has laid out in hard numbers why child care benefits are a sound investment for companies.

• Businesses with 250 employees or more can save $75,000 per year in lost work time by subsidizing care for employees’ sick children;
• With each dollar invested in child care, communities save between $4 and $17 in future costs like special education.

Much of that benefit comes from companies’ ability to attract and retain workers. Further data show that impact.

• 83% of workers with children aged five or younger state that child care benefits would either be a very important or somewhat important factor in deciding whether to stay at their current jobs;
• 69% of women with children of the same ages shared that help with child care would make them more likely to take a job.

The cost savings associated with retaining workers is significant, as Business News Daily estimates the average cost of hiring and training a new employee runs around $4,000. Moreover, being attractive to employees represents a cost savings in terms of having to devote fewer resources to recruitment.

These have already been issues for gambling companies leading up to the child care cliff. The circumstances make obvious why it is be a make-or-break moment for them.

Casinos have an immediate choice to make

In April, Rush Street Gaming CEO Tim Drehkoff told Heather Fletcher of Bonus.com that “casinos have 400,000 fewer workers than the industry employed before the pandemic.” He minced no words about the state of labor in the industry, plainly stating, “in our world right now, we definitely have a labor shortage.”

The child care cliff threatens to exacerbate those issues, potentially carving into already lean workforce numbers even further. To a certain extent, though, that’s only if casinos and other gaming companies allow it to. Some have taken steps in the right direction already.

• Bally’s contracted with Upwards to provide employees access to in-home caregivers in 2022;
• In 2020, MGM Resorts added child care discounts to employee benefits;
• Station Casinos and the Venetian in Las Vegas opened on-site employee child care centers in 2000.

With potentially millions of parents soon to be seeking out such benefits, the time for casinos to improve upon these offerings and tout the benefits they already have has come. It isn’t a question of whether they can afford to. The quandary is whether they can afford not to.