Trump - Good or Bad for Online Gambling?

By Ben Hamill - November 22 2016

Online Gambling

Now that Donald Trump has been elected President of the United States, many US citizens are questioning whether he will work toward ending the illegality of online gambling in most US states. Those who wax optimistic say that Trump owned Las Vegas casinos and has expressed his approval of gambling in general. However, supporting land-based casinos is a far cry from supporting online gambling. The two are in direct competition with each other and if the playing field were completely level, online gambling would far exceed land-based gambling. Legalized online gambling in the US is certainly a complex issue so I'll start with some electoral technicalities.

Elected, but not Yet

Donald Trump was "elected" on November 6 but he was not exactly elected. Without getting into too many details, a group of men and women will meet in December. They are called the electors and they will "elect" the President. It is highly unlikely that they will not elect Donald Trump to be the next President of the US. Donald Trump will be sworn in as President on January 20 in Washington DC. Then he can begin to assume the power of the presidency.

President Makes No Laws

In the US system, the President is not the head of the legislature. In the US the President runs the Executive Branch of government. So, Donald Trump alone has no specific power to change the law about online casino gambling. He needs to work with Congress to change the law.

It takes a long time for most laws to wind their way from committee to a vote in the first body of Congress. The second body must also pass a similar law and then a special committee is appointed to iron out the differences between those two laws, creating a final law that is "sent to the President" for his approval. If the President approves of the law he signs it and it becomes law. If he disagrees with it he vetoes it and it is "sent back" to the Congress.

Donald Trump's Agenda

Mr. Trump made many policy statements during the long campaign for the presidency. He made hundreds of speeches and used Twitter perhaps more than any candidate before him, sending thousands of Twitter messages. It is possible that he never once mentioned online casino gambling as a big issue for him. So, to get online casino gambling to be legal in the US someone will have to get the President's attention on the matter. Then there is no way now of knowing what Donald Trump‘s opinion is about online casino gambling.

States Have Authority, Too

The legalization of online gambling in the US is clouded further by the very make-up of the US. The US is made up of 50 independent States. It might not seem so anymore but each state has broad legislative and executive power as expressly described in the US Constitution. So, legalized online gambling in the US might become law in some states without a major change in national law.

The Exact Law is Uncertain

It gets even more complicated. In 2002 a US court ruled that an existing US law made it illegal to information about sports betting across communication lines but also specifically said that the law did not speak directly to the legalization of online gambling. Nevertheless, the Justice Department in the US has long considered that the law does in fact prohibit online casino gambling. Here is one area in which Mr. Trump can exercise executive authority: he can order the Justice Department to cease to impart its own interpretation to the ruling of the US court from 2002.

Were Trump to do so, it would not create legalized online gambling in the US immediately because it would still be governed by state law. As a national matter the law is still murky because of another infamous law that was passed in 2006 called the Unlawful Internet Gambling Enforcement Act, or UIGEA. The UIGEA was a small attachment to a larger bill on a completely unrelated matter. When President George Bush signed the parent law it is entirely possible that he was unaware of the implications the law held for online casino gambling in the US.

The UIGEA specifically prohibits banks from sending money to online gambling sites. The intention was to effectively eliminate most deposits and withdrawals to and from online gambling sites and so it did. The law did not make it illegal for banks to transfer money to land-based gambling venues, or casinos. It has long been felt that the land-based casino operators got Congress to pass a law favorable to them at the expense of online casinos and their customers.

In addition, executives of foreign online gambling sites had previously been detained whilst they were in the US on unrelated matters. So, many gambling company executives became frightened by the possibility of being arrested whilst in the US and simply pulled out of the US market! That's where we stand today!

Every gambling site did not pull out of the US market. PokerStars, Bodog, and Full Tilt Poker were notable sites that continued to do business with US customers. But the vast majority did pull out.

Former Senator from Massachusetts Barney Frank tried to change the law in 2010 but gathered few supporters in Congress.

So, President Trump's attention will likely be elsewhere for all or most of the first four years of his Presidency. That he will be 73 years old when he can run for re-election in 2020 means that he may not seek a second term. It is quite probable, then, that no substantive change in the law will be forthcoming in the next four years unless a member of Congress leads the way.