Donald Trump's Gambling Crystal Ball

By Ben Hamill - December 29 2016

  How will President-Elect Trump deal with the gambling industry and why that matters.  

It's a given that everyone will be looking toward the new US Administration to further their unique set of interests. The gambling industry in the US was seriously affected by the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006. That law did not make gambling in the US illegal; it made it illegal for banks or credit card companies to transfer money for the purpose of online gambling. If this seems like hair splitting, it may very well be. Many casinos and game developers simply pulled out of the US market.

An Unclear Law

Ironically, the UIGEA was an addition to a much larger law that had nothing at all to do with gambling. Ironically as well, is that every US State has several legal gambling operations going! These include, depending on the State, horse racing, dog racing, land-based casinos, jai alai, and lotteries. Four States allow sports betting. Some feel that fantasy sports, even when money exchanges hands, is a game of skill rather than outright gambling. The famous Powerball lottery is run across several State lines and has generated payouts in the hundreds of millions of dollars for a single drawing. So, the gambling industry is waiting with baited breath and in full nail-biting mode to see what Donald Trump will do as President to help or hurt private gambling operations that wish to serve the American gambler.

Role of the President

There is also a bit of a misunderstanding here. Donald Trump will not make laws. Laws are made in the US version of Parliament, called Congress. The President pits laws into effect. But the American public increasingly looks to the President to set the tone for all legislation during his (or someday her) term in office. It also makes no difference whatsoever what you thought about Donald Trump in the many months before the election, or what you think of him now. Today he is soon to be the President of the United States with all the power that that office provides. 

A Giant Question Mark

The reason industry people are concerned is because it is entirely unclear how Donald Trump will view gambling. The American Gaming Association (AGA) sent Mr. Trump a letter detailing the facts about the gambling industry in the US. The industry employs almost 2,000,000 people. It generates close to forty billion dollars in tax revenue each year. The letter covers wide range of gambling interests and aspects of gambling. It details the challenge imposed by illegal gambling operations; how gambling affects tourism and travel both within the US and from outside the US; immigration; taxes; Tribal gambling policy; sports betting; infrastructure; and money laundering. This latter is said to have been a major reason that the UIGEA was considered necessary in 2006.

Volatility Indicates Doubt

There are many gambling enterprises that trade on stock exchanges. As we might expect, the stocks of these companies indicate volatility and uncertainty. Some casino stocks are part of much larger conglomerates so their stock performance in the past six weeks is a function of the companies' broader viability. But those companies that are entirely or primarily gambling businesses have seen rises of ten or more percent and drops of ten or more percent!

Showing Confidence

Geoff Freeman, President and CEO of the AGA said, "We look forward to working with the Trump administration on a range of critical issues from sports betting and illegal gambling to tax reform and immigration." Mr. Freeman's high hopes may be much easier said than done. Mr. Trump swore to reform immigration policy in the US; the AGA may want a more liberal immigration policy to lower labour costs. The UIEGA defined some aspects of illegal gambling; at its worse illegal gambling supports organized crime and human trafficking; no civilized person could oppose rigorous enforcement of the law to combat these stains on society. But the AGA surely wants their operations to be defined ass wholly legal; that they felt the need to write to Mr. Trump indicates that they fear that he might not share their views. Gambling establishments may want tax reform that favours them. In short, the industry is on tenterhooks not really knowing how Mr. Trump will view gambling in all its aspects.


Donald Trump used to own or be involved in several Atlantic City gambling properties; he will become the first US President to have ever been so directly involved in the gambling business. According to lobbyist Kirk Blaylock, Trump "comes to the table with a good, solid understanding of how the industry works and what the challenges are." What no one knows at this time is in which direction Trump's knowledge of the industry will take him. As a former fellow operator of a land-based casino, he might side with the brick and mortar casino owners who make a lot of money and presently have a very large chunk of the American gambling dollar, and may do little or nothing to rewrite the UIGEA. On the other hand, as a gambling entrepreneur, he might value the business acumen of online casino operators and work to furthering the reach of online casinos. Confusing the matter even more, and causing gambling managers to "gnaw their fingernails down to the cuticles" is the rise and fall of New Jersey Governor Chris Christie. Christie is a strong supporter of land-based and online casino gambling. At one time, he was thought to be a shoe-in to have a major position in the Trump administration. That has not happened and industry watchers wonder how much of Christie's apparent fall in Trumpian favour may affect Trump's approach to gambling.

Trump Can No Longer Prevaricate

Finally, Trump said in an interview in September, two months before the election, and at a time when he might have been leery of taking too strong a position either way, that "I have a lot of friends on both sides of this issue." This, of course, means that he was sitting on the fence then; what he thinks now is anyone's guess. In 2015 Trump indicated that he was okay with fantasy sports betting and sports betting generally but his rationale, "because it's happening anyway", is not sophisticated enough for a President. Further clouding the matter is that Donald Trump generally is in favour of States making their own rules on many issues, as was foreseen by the US Constitution. This basic fact has fallen into great disrepair in the last 80 years. Hillary Clinton was seen as a potential President far more amenable to government fiat in the gambling sphere as elsewhere. Mr. Trump will surely feel a great deal of pressure to "do something" about gambling generally. Whether he will ultimately defer to individual States or try to implement a national gambling policy is the great present unknown and the basic source of the troubled anticipation gambling interests feel as the new administration comes into power.