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What pre-pandemic job trends suggest about the post-pandemic future of the capital region

While the long-term economic impacts of the COVID-19 pandemic are still uncertain, the sharp increase in remote work has raised some fundamental questions about the geography of jobs and the demand for both housing and commercial real estate. If professio

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3 years ago

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By Jaclene Begley, Leah Brooks, Brian J. McCabe, Jenny Schuetz, Stan Veuger

While the long-term economic impacts of the COVID-19 pandemic are still uncertain, the sharp increase in remote work has raised some fundamental questions about the geography of jobs and the demand for both housing and commercial real estate.

If professional workers who drive the demand for premium-location office space remain working from home, it could have profound impacts on downtown business districts. Dense clusters of office jobs have traditionally brought in customers for nearby businesses like coffee shops, restaurants, and dry cleaners. If remote work (or a hybrid model) persists, it could have ripple effects throughout regional labor markets and commercial real estate, as well as altering where workers choose to live.

In our forthcoming report, we examine the geography of jobs in the Washington, D.C. region prior to COVID-19, with an eye toward understanding how the pandemic could change employment and commercial real estate throughout the region. Below, we highlight a few of our key findings.

Downtown Washington, D.C. had the largest concentration of jobs prior to COVID-19

The capital region’s jobs were highly concentrated near its central business district (CBD), which we approximate as the area within 5 kilometers of the White House. This area encompasses most of central Washington, D.C. and some close-in parts of Arlington, Va., including Rosslyn and the Pentagon. The inner core had an employment density of more than 9,000 jobs per square kilometer (Figure 1)—more than four times the density of further-flung neighborhoods. The District is home to 20% of the region’s jobs, but only 10% of the region’s workforce. 

Downtown Washington, D.C. offers location advantages to both employers and workers. The region’s hub-and-spoke rail system was designed to channel commuters from suburban residential areas into the CBD. Because downtown is roughly in the geographic center of the region, it is reasonably accessible from all directions. Job-rich areas attract still more jobs, offering new firms access to existing businesses, customers, and amenities.

Offsetting these employment centralization and density advantages is the fact that downtown office and retail rents are higher than in other parts of the region. Similarly, streets, sidewalks, and public transit can become congested, especially during peak commuting times.

The capital region has several large suburban job clusters outside downtown, which track closely to major highways. The largest suburban job centers include Tysons Corner and Reston in Fairfax, Va., and the northwest corridor along I-270 in Montgomery County, Md., between Bethesda and Gaithersburg.

White-collar industries drive the capital region’s economy

Although the Washington, D.C. region is famous as the seat of the federal government, the government is not the region’s largest industry. Rather, the largest share of workers is employed in professional and business services, a category that includes law, finance, consulting, and a variety of other fields. (Notably, this also includes companies that contract for government agencies.)

The capital region employs more workers in both professional services and government than the U.S. as a whole (shown by the red lines in Figure 2). These industries tend to employ more college-educated workers, pay relatively high salaries, and—salient during the past year—can more easily be performed remotely.

2

Not all parts of the region have a similar employment mix. Figure 3 shows the industry composition for three large job clusters: Farragut North in downtown Washington, D.C.; Tysons Corner, Va.; and Rockville, Md.

Farragut North has roughly equal numbers of workers in the region’s two dominant industries (professional services and government), but also a substantial number of jobs in leisure and hospitality. The area includes many restaurants, bars, coffee shops, and hotels, which serve office workers, tourists, and business travelers. Rockville has the most balanced industry mix, while Tysons Corner is the most specialized, with a clear dominance of professional services and very few government jobs. Industry mix has implications for commercial real estate demand, especially if remote work continues as a longer-term trend.

Fig3

COVID-19 has decimated leisure and hospitality jobs

The COVID-19 pandemic caused job losses in all sectors of the capital region’s economy, but these losses were not equally distributed. The leisure and hospitality industry—which previously formed about 10% of the region’s employment—saw the largest job losses, reflecting both new regulations and consumer preferences. State and local public health agencies placed restrictions on restaurants and bars, while risk-averse consumers have avoided congregating in shared indoor spaces like movie theaters.

During the first few months of the pandemic, leisure and hospitality jobs fell to nearly half of their January 2020 levels. By the end of 2020, jobs had recovered somewhat, but were still well below pre-pandemic levels. A key question for economic recovery is when enough consumers will resume in-person gatherings—which will likely correlate with more widespread rollout of vaccines and subsequent updates to public health guidelines.

4

Low-wage workers live farther from job clusters

Job losses during the pandemic have hit low-wage workers the hardest, especially those employed in service sectors that cannot be performed remotely (e.g., food service). Low-wage workers were already at a disadvantage in housing markets because they cannot compete with higher-income households for desirable locations. Neighborhoods close to major job centers and with good public transportation tend to have more expensive housing—pushing many low-income workers to seek cheaper rents in inconvenient locations.

Figure 5 shows that low-wage workers (those earning less than $3,333 per month) are more concentrated on the eastern side of the District, the inner ring of Prince George’s County, Md., and the farther western exurbs. Commuting from these areas to dense job clusters such as Farragut North, Tysons Corner, and Rockville requires more time and money from workers. Proposed cuts to public transportation will create the most hardship for workers who cannot afford to own cars and those who work irregular or off-peak hours, when transit service is less frequent. 

Fig5

Our work habits will affect the future of cities, neighborhoods, and workers

The past year has brought enormous uncertainty to workers, businesses, and policymakers about the future of work. Will highly educated professionals revolt if asked to return to daily commutes and rigid schedules? Can employers save money by reducing their office space and related expenses such as insurance, utilities, and supplies? Should local governments alter land use planning to accommodate “15-minute cities” that incorporate more commercial space in residential areas? Are downtowns as we know them finished? Will people flee urban areas altogether for more space in far-flung rural areas—or are people itching to return to face-to-face contact?

While it’s still too early to have much data on people’s long-term preferences, our research suggests three areas to watch.

First, in-person industries such as leisure and hospitality will take time to recover. Continuing uncertainty over when enough people will have been vaccinated to reach herd immunity makes it difficult to predict when consumers will want to fully re-engage with previous activities. And some workers in this sector may have moved on, geographically or into different jobs.

Second, don’t count downtowns out yet. The fundamental reason that draws businesses to CBDs and large employment subcenters still exists: Firms and workers are more productive when they locate close together, especially in “knowledge industries.” It’s hard to imagine congressional representatives and lobbyists choosing to hobnob indefinitely over Zoom instead of resuming in-person power lunches.

Third, cultural institutions and amenities will still attract residents and tourists to the capital region. Even if a substantial share of highly educated professionals adopts a hybrid telework/in-office schedule, people will still want places to socialize and recreate outside their homes. Attractively maintained outdoor spaces such as the District’s waterfront parks and the C&O Canal trail have been enormously popular during the pandemic. The Smithsonian museums aren’t likely to move off the National Mall anytime soon. Local governments that want to retain residents who may have wider job options would do well to continue investing in high-quality public services and amenities that improve daily quality of life.

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Student loan borrowers may finally get answers to loan forgiveness issues

A major student loan service company has been invited to face Congress over its alleged servicing failures.

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6 hours ago

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March 19, 2024

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U.S. Sen. Elizabeth Warren (D-MA) wants answers from one of the top student loan service companies in the country for allegedly botching its student loan forgiveness process involving the federal Public Service Loan Forgiveness program, leaving borrowers confused and without answers.

The senator sent a letter to Mohela CEO Scott Giles on March 18 inviting him to testify before Congress at a hearing on April 10 titled “MOHELA’s Performance as a Student Loan Servicer.” During the hearing, Giles will have to answer for why his company allegedly failed to send billing statements to student loan borrowers in a timely manner and miscalculated monthly payments for borrowers when it was time for them to repay their loans in September last year.

Related: Here's who qualifies for Biden's student loan debt relief starting next month

Also, in the letter, Warren highlighted a report that claimed that Mohela failed to perform basic servicing functions for borrowers eligible for PSLF, which led to over 800,000 public service workers facing delays in receiving student debt relief. The report also accuses the company of using a “‘call deflection’ scheme” to keep customers away from speaking to a customer service representative and instead redirecting them to parts of their website.

“Your company has contributed to student loan borrowers’ difficulties by mishandling borrowers’ return to repayment following the COVID-19 pandemic-related pause on payments, interest, and collections and by impeding public servants’ access to PSLF relief,” wrote Warren in the letter.

The move from Warren comes after the U.S. Department of Education withheld $7.2 million in payments to its servicer Mohela in October as punishment because it failed to issue timely billing statements to 2.5 million borrowers which resulted in 800,000 borrowers becoming delinquent on their loans. The department ordered Mohela to put those affected by the issues into forbearance until the mess was resolved.

U.S. President Joe Biden is joined by Education Secretary Miguel Cardona (L) as he announces new actions to protect borrowers after the Supreme Court struck down his student loan forgiveness plan in the Roosevelt Room at the White House on June 30, 2023 in Washington, DC. 

Chip Somodevilla/Getty Images

Mohela is also currently facing two class-action lawsuits, one filed in December last year and another in January this year, for its alleged “failure to timely process and render decisions for student loan borrowers enrolled in the Public Service Loan Forgiveness program.”

In response to recent criticism surrounding its alleged issues and failures regarding the PSLF program, Mohela claimed in a statement to the Missouri Independent that it “does not have authority to process loan forgiveness until authorization is provided by FSA, which can take months to occur.”

The company also claimed that there are “false accusations” inside of the bombshell report, which was released in February, that details the company’s servicing failures.

“It is unfortunate and irresponsible that information is being spun to create a false narrative in an attempt to mislead the public. False accusations are being disingenuously branded as an investigative report,” said Mohela. 

Related: Amazon just made a major announcement that will bring you big savings — and we have all the details

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International

Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Federal police in Brazil have indicted former President Jair…

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7 hours ago

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March 19, 2024

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Bolsonaro Indicted By Brazilian Police For Falsifying Covid-19 Vaccine Records

Federal police in Brazil have indicted former President Jair Bolsonaro for falsifying his Covid-19 vaccine card in order to travel to the United States and elsewhere during the pandemic.

Federal prosecutors will review the indictment and decide whether to pursue the case - which would be the first time the former president has faced criminal charges.

According to the indictment, Bolsonaro ordered a top deputy to obtain falsified Covid-19 vaccine records of himself and his 13-year-old daughter in late 2022, right before he flew to Florida for a three-month stay following his election loss.

Brazilian police are also waiting to hear back from the US DOJ on whether Bolsonaro used said cards to enter the United States, which would open him up to further criminal charges, the NY Times reports.

Bolsonaro has repeatedly claimed not to have received the Covid-19 vaccine, but denies any involvement in a plan to falsify his vaccination records. A previous investigation by Brazil's comptroller general concluded that Bolsonaro's vaccination records were false.

The records show that Bolsonaro, a COVID-19 skeptic who publicly opposed the vaccine, received a dose of the immunizer in a public healthcare center in Sao Paulo in July 2021. [ZH: hilarious, Reuters calling the vaccine an 'immunizer.']

The investigation concluded, however, that the former president had left the city the previous day and didn't leave Brasilia until three days later, according to a statement.

The nurse listed in the records as having applied the vaccine on Bolsonaro denied doing so and was no longer working at the center. The listed vaccine lot was also not available on that date, the comptroller general's office said. -Reuters

"It's a selective investigation. I'm calm, I don't owe anything," Bolsonaro told Reuters. "The world knows that I didn't take the vaccine."

During the pandemic, Bolsonaro panned the vaccine - and instead insisted on alternative treatments such as Ivermectin, which has antiviral properties against Covid-19. For this, he was investigated by Brazil's congress, which recommended that the former president be charged with "crimes against humanity," among other things, for his actions during the pandemic.

In May, Brazilian police raided Bolsonaro's home, confiscating his cell phone and arresting one of his closest aides and two of his security cards in connection to the vaccine record investigation.

Brazil's electoral court ruled that Bolsonaro can't run for public office until 2030 after he suggested that the country's voting system was rigged. For that, he has to sit out the 2026 election.

Tyler Durden Tue, 03/19/2024 - 11:00

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International

This gambling tech stock is future-proofing the world’s casinos

Supported by the universal thrill of a quick payout and the need for leisure, gambling stocks make a compelling case for long-term returns.
The post This…

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Supported by the universal human thrill of a quick payout, and the need for leisure and entertainment to bring enjoyment to adult life, casinos will remain essential spaces for people to dream and play for the foreseeable future, making gambling stocks a prospective space to look for long-term returns.

According to Research and Markets, the global casino industry was valued at US$157.5 billion in 2022, and it will grow to US$224.1 billion by 2030 at a compound annual growth rate of 4.5 per cent. This trend includes:

Approximately 100 million gamblers in the United States, who generated US$66.5 billion in revenue in 2023, a 10 per cent gain from 2022, which itself was a record year A little fewer than 20 million gamblers in Canada, who generated about C$15 billion in revenue in 2023 A global addressable market of thousands of casinos, and more than 4.2 billion people who gamble at least once every year, according to a 2016 study by Casino.org

The main challenge with attracting these billions through casino doors is they sway heavily toward middle age. The mean age of U.S. casino visitors has hovered around 50 for the past decade, with a similar trend across the world, forcing casinos to attract younger, tech-savvy customers, many with less gambling experience, to continue growing profits for their stakeholders over the long term.

Investors seeking exposure to a leadership position in building the bridge between casinos and the next generation of gamblers should evaluate Jackpot Digital (TSXV:JJ). The Vancouver-based company is a manufacturer of dealerless electronic table games that deliver immersive experiences tailored to the digital age, while earning casinos attractive returns on investment.

The gambling technology stock benefits from no direct competition in the dealerless poker space, with orders spanning North America, Europe, Asia, Africa and the Caribbean, a long-established presence with major cruise ship brands, such as Carnival, Princess Cruises and Holland America, and a growing land-based presence with orders or ongoing installations across 12 U.S. states. Its highlight partnership to date is a master services agreement with Penn Entertainment, the country’s largest regional gaming operator with 43 properties across 20 states.

Jackpot Digital’s differentiated technology and well-rounded management team are at the heart of its success in landing several blue-chip casino gaming companies as customers.

Jackpot Blitz

The gambling technology stock’s flagship product, Jackpot Blitz, is a dealerless poker table featuring three of the world’s most popular variations – Texas Hold’ em, Omaha, and Five-Card-Omaha – brought to life through slick 4k graphics on a 75-inch touchscreen, and offered in three formats – pot-limit, no-limit and fixed-limit – designed to attract a diversity of revenue from casual to experienced players.

Spokesperson and NFL championship-winning coach Jimmy Johnson explains the benefits of the Jackpot Blitz. Source: Jackpot Digital.

The table also comes equipped with house-banked mini-games, including blackjack, baccarat and video poker, as well as side bets on the main poker game, such as Bet the Flop, all of which keep players engaged and entertained between, and even during, poker hands. The stunning Jackpot Blitz machine also offers multi-venue “Bad Beat” jackpot functionality, allowing casinos to offer a “Poker Powerball” with massive Jackpots, further enhancing the attractiveness of Jackpot Blitz to new players.

It’s by striking a balance between the needs of the modern gambler, and efficiency and profitability that in-person operators couldn’t hope to match – unless they ordered the machine for themselves – that Jackpot Digital has earned itself the top spot in dealerless poker.

Player benefits

When a veteran or novice gambler takes a seat at the Jackpot Blitz, his or her experience begins with an easy-to-use interface, laid out in a modern and stylish design, programmed to respond to hand gestures that bring real casino play into the digital age, including card bending and chip jingling.

Source: Jackpot Digital.

The table’s intuitive controls, combined with instant payouts and its dealerless nature, translate into faster game play, which maximizes playing time and player excitement, while minimizing human error and the intimidation new gamblers might feel about approaching an analog poker table. The gambling technology stock’s in-house development team is also constantly working on new games to keep content fresh, with a special focus on bringing international games and regional versions of poker to casino audiences in Asia, South America and the Indian subcontinent.

As hands are laid down and pots pile up, players can also track game stats in real time, which inform future strategy and enhance the thrill of the moment with an added element of competition.

Operator benefits

From an operator’s perspective, a floor of automated gaming tables can meaningfully and instantly reduce casino staff expenditures and management pain points, while avoiding wage inflation, labour shortages and supply costs.

The Blitz is no slouch on revenue either, dealing more hands per hour, resulting in higher revenue and higher profitability, which is further enhanced by onboard side bets and mini-games that can be played while players are engaged in a poker hand.

The Jackpot Blitz’s economics are attractive to operators thanks to its ability to accommodate non-stop play, while monetizing downtime through side games and bets. While a human dealer must spend time shuffling, interacting with players, and consulting with colleagues, the Jackpot Blitz can accept wagers 100 per cent of the time, making sure gamblers get the action they came for and operators see a return on their investment.

Source: Jackpot Digital.

Beyond gaming revenue, casinos are further incentivized to onboard the Jackpot Blitz because of its fully customizable advertising functions, including logos, card backs, chips and felt colors, all of which bolster casino culture and enable the pursuit of revenue from third-party advertising partners.

The Blitz ties its value proposition together by generating automatic reports – including demographics and consumer behaviour through a rewards card system – and plugging directly into most back-end management systems, saving casinos the hassle of manual tracking, while also minimizing tampering, money-laundering and theft through the use of isolated servers.

Whether it’s streamlining the player experience or putting automation at the service of operators’ bottom lines, Jackpot Digital’s flagship product is positioned to create value, and plenty of it.

Jackpot Digital’s path to profitability

After existing as an exclusively cruise-ship-based operation since 2015, Jackpot Digital suffered a steep decline in revenue during the COVID pandemic, falling from C$2.18 million in 2019 to C$0.42 million in 2021.

Management quickly pivoted in the face of uncertainty, redesigning the Blitz to execute on a land-based expansion strategy – backed by Gaming Labs International certification in fall 2023 – which is bringing about a successful turnaround after the re-emergence of the casino business. Revenue more than tripled to C$1.43 million in 2022, and reached C$1.57 million through three quarters of 2023, with the company expecting to ramp up significant recurring revenue after it installs several dozen machines currently in its backlog.

The Jackpot Blitz electronic gaming table in action. Source: Jackpot Digital.

The first installation of land-ready Jackpot Blitz machines is now completed at the Jackson Rancheria Casino in California, as the company announced today. The three-machine installation marks a new era of growth for the company, having announced 25 Blitz deals since November 2021 (slide 12), with many more across Canada and the United States in the works, in addition to a strong pipeline in Asia and Europe.

“Jackpot Digital could be a profitable company right now if it only focused on care and maintenance of the revenues it currently generates. But that’s not why we’re here,” Mathieu McDonald, Vice President of Corporate Development at Jackpot Digital, said in a recent interview with Stockhouse. “We intend to scale up to many multiples of the tables we have out right now, with the potential for up to 2,000 tables over the next three to five years.”

According to McDonald, the company is fielding three to five inquiries per week about the Blitz from casinos around the world that recognize the machines’ first-mover advantage in dealerless poker and potential expansion into other games in need of automation.

Jackpot Digital’s ambitious plan of action is supported by a management team of proven gambling, finance, advertising and legal professionals, many of which have been serving Jackpot stakeholders for more than two decades.

A long-tenured management team

The management team behind Jackpot Digital is led by Jake Kalpakian, who has served as president and chief executive officer since 1999, including under the gambling technology stock’s former incarnation as Las Vegas From Home.com Entertainment Inc. Kalpakian brings more than 30 years of experience managing small-cap publicly listed companies, granting him a steady hand when it comes to maneuvering through the volatility of the economic cycle.

Kalpakian’s efforts are supported by three directors whose well-rounded expertise positions Jackpot Digital for long-term sustainable growth:

Gregory T. McFarlane, a director at Jackpot Digital since 1999, previously ran an independent advertising firm and holds a degree in mathematics from the University of Toronto. McFarlane is also a co-founder of the popular Control Your Cash personal finance website. Chief financial officer Neil Spellman, a director at the company since 2002, boasts an almost two-decade track record as vice president at Wall Street firm Smith Barney, where he developed a multi-industry understanding of the journey to profitability. Finally, Alan Artunian, a director since 2017, currently serves as CEO of Nice Guy Holdings, a corporate and legal consulting company advising clients across a diversity of sectors.

Guided by a strategic management team, and benefiting from a macro-trend toward casino automation, Jackpot Digital is on course to ride a wave of millions of gamblers looking for an elegant, tech-informed alternative to traditional in-person play.

A multi-bagger opportunity

The Jackpot Digital opportunity sets up savvy investors who recognize the soundness of the company’s value proposition. The tremendous risk/reward value of Jackpot Digital gives investors the opportunity to ride the macro-trend toward casino automation, as deals for the Blitz keep pouring in, the company adds games to its portfolio, and the global casino industry adds hundreds of billions in revenue through this decade.

Join the discussion: Find out what everybody’s saying about this gambling technology stock on the Jackpot Digital Bullboard.

This is sponsored content issued on behalf of Jackpot Digital, please see full disclaimer here.

The post This gambling tech stock is future-proofing the world’s casinos appeared first on The Market Online Canada.

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