Posted: October 16, 2023, 08:24h. 

Last updated: October 16, 2023, 08:24h.

New Federal Legislation Could Impact Casino and Hospitality Industries

Financial analysts predict that proposed federal legislation could have significant implications for the casino and hospitality industries. The bill aims to reform credit card checkout processes, potentially disrupting the dominance of Visa and Mastercard in credit card swipe fees paid by merchants to big banks.

US Sen. Dick Durbin (D-Illinois) introduced the Credit Card Competition Act of 2023, which closely resembles a previous bill that failed to pass. If enacted, the bill would require large banks to offer at least two interchange routes on their credit cards, allowing merchants to select the option with lower fees. The goal is to increase competition and discourage fee increases by Visa and Mastercard, which are believed to contribute to inflation and rising prices.

The potential impact of the Credit Card Competition Act has drawn opposition from Visa, Mastercard, and some financial analysts. Critics argue that the bill may not benefit consumers as anticipated, as it relies on merchants passing on transaction savings to customers. Comparisons are made to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which halved debit card transaction fees but led to the elimination of rewards programs.

Gaming and hospitality analysts are particularly concerned that if the Durbin bill is enacted, credit card rewards programs, often used by visitors to major gaming destinations like Las Vegas and Atlantic City, could be affected. This sentiment is shared by industry professionals like Josh Saltzman, vice president of global government affairs at Airlines for America, who highlighted the importance of credit card rewards for travelers.

However, not all experts share this concern. Some analysts believe that while the bill may reduce revenue from interchange fees for issuers, credit card rewards programs may still be sustained through annual fees. Nevada’s lieutenant governor, Stavros Anthony, even suggests that the Credit Card Competition Act could benefit tourism in the state by reducing credit card swipe fees and offering economic relief.