Gambling in Post-Trump Era: Predictions
Are the Democrats going to monitor our money by governing gambling if Trump finally does get impeached?
A closer look at the congressional history of leading members of the Democratic Party indicates that the casino industry would veer towards being very strictly regulated if Trump were removed from office. Mr. Trump, who owned four casinos in Atlantic City, is a powerful ally of gambling operators — something which can’t really be said about his Democratic opponents.
Thus, as the nation anticipated the 2016 presidential voting results, gambling operators probably couldn’t help but conclude that Trump’s presidency would be favorable for them.
And they weren’t wrong about that at all!
However, what will happen next to gambling because the rhetoric of Trump’s Democratic rivals is unclear and indeed hotly disputed.
The predictions do look pretty gloomy if we take into consideration the stances of leading Democrats.
For instance, Senator Chuck Schumer wants to federalize the sports betting market. Senator Elizabeth Warren wonders if online gambling is secure enough, but she isn’t taking into consideration the fact that online gamblers certainly can’t fall victim to mass shootings; unlike the 2017 Las Vegas shooting with its many fatalities! And on top of that — former Vice President Joe Biden has remained silent on the question of online gambling, which means he is either against it or possibly has a hidden agenda of some kind.
So, where would we be headed without Trump in the Oval Office?
Trump and Gambling: A Love Story
Back in the year 2011, the Wire Act of 1961 was still in force; this law banned the transmission of interstate betting information. Meanwhile, the pressured gambling operators were seeking to expand into online realms.
The casino industry firmly pushed to pass federal internet gambling legislation that year, receiving support from a prominent businessman who was later to become president of the USA — Donald Trump.
In that uncertain environment, where the question of whether or not to permit internet gambling was hanging in the air, Donald Trump decided to weigh in on the issue in an interview with Forbes, thus cementing his status as a fervent supporter of online gaming. He said that the U.S. was “missing out” while other countries were reaping the benefits of digital gaming, adding that it was “inevitable” that the U.S. would join in on the fun.
And he wasn’t wrong about that one…
That same year, Obama’s Department of Justice disclosed a legal opinion, ruling that the Wire Act of 1961 was only limited to online sports betting — which paved the way for a new era in U.S. gambling history, which meant relying on the internet in order to increase revenue. So Mr. Trump and businessmen alike breathed a sigh of relief.
But Trump wasn’t always siding with proponents of online gambling. In fact, he was against it while he was operating his eponymous land-based casinos in New Jersey.
Trump and Online Gambling: He Loves Me… He Loves Me Not
The current president of the United States was a prominent figure in the New Jersey gaming scene of the 1980s and 1990s, managing as many as four casino resorts in Atlantic City alone. His audacious personality and luxurious properties drew casino aficionados to Atlantic City as it fought to become the gambling capital of the U.S.
It was during this time that Mr. Trump was one of the main opponents of internet gaming as this new phenomenon could have exerted a negative impact on the revenue of his land-based operations. And as an ambitious entrepreneur, Trump wasn’t really in the business of losing money!
Yet that’s exactly what his casino ventures in Atlantic City brought him…
A big recession hit the town in the 1990s, forcing Trump to declare Chapter 11 bankruptcy in 1991. He also made three additional trips to bankruptcy court — in 1992, 2004, and 2009.
By 2011, Donald Trump had already distanced himself from his casinos what with all their high-interest debts and declining revenue; he also agreed to reduce his stock ownership in Trump Entertainment Resorts. The Trump Plaza and Trump Taj Mahal were still operational at least. However, it was only a matter of time before these properties were to close as well. And this is exactly what they did in 2014 and 2016.
Despite failing in the casino industry of Atlantic City, Mr. Trump was looking ahead — this time, towards the rise of the internet era, becoming a proponent of online gambling. Thus, it came as no surprise when Trump revealed he was going to establish a joint venture for internet gambling together with the Avenue Capital Group, managed by billionaire Marc Lasry, in 2011.
The partners created Poker Ventures LLC, obtaining a vendor license to operate in New Jersey. And although the company has been established, it still remains inactive.
Years later, while announcing his candidacy, Trump became a leading presidential candidate, who owned an online gambling company, thereby encouraging gaming operators to conclude that a Trump presidency would be favorable for them.
Therefore, almost nobody expected the next step of the Trump Administration.
New Interpretation Aimed at One Man
In January 2019, the DOJ issued a new interpretation of the Wire Act, rescinding the Obama-era ruling. The new opinion states that the Wire Act should be applied to all forms of gambling that rely on interstate wire communication. As such, it includes online lotteries and online gambling.
The news about the interpretation was met with shock and disbelief in the gaming community. Yet industry experts and analysts didn’t seem as surprised by the ruling, quickly pointing fingers at one man — Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson — a fierce opponent of online gambling!
For years, Adelson dedicated his time and money to rescind the 2011 opinion, employing the same reasoning Trump did when he operated casinos — digital gaming would decrease revenue in his venues. This rationale led him to fund the Coalition to Stop Internet Gambling.
On top of that, Adelson is a GOP donor, giving over $100 million to support Republican candidates for president, including Donald Trump. With this in mind, experts say that the new ruling was “written for an audience of one” — Sheldon Adelson — perhaps as the GOP’s way of saying “thank you” to the businessman for years he spent supporting them.
As he still owns the online gambling company Poker Ventures, it’s easy to conclude that Donald Trump the businessman would never have supported the new DOJ ruling. However, Donald Trump the president has to think of the 2020 election, which will probably go better if he has Adelson’s financial support.
Despite this new ruling, the online gaming industry is thriving under Trump, as evidenced by the constant increase in revenue, which, by the way, didn’t happen under the Democrat’s Obama presidency.
Trump vs. Obama Era: Effect on Gambling Revenue
The clearest sign of Trump’s positive effect on the gambling industry is visible from the gross gaming revenue (GGR) of the two states fighting to be deemed the U.S. gambling capital — Nevada and New Jersey. Under his presidency, the figures are either considerably increasing or remaining at the same level (Table 1 and 2).
|Nevada Gross Gaming Revenue||2017||2018||2019(January-September)|
Table 1: Nevada Gross Gaming Revenue Under Trump’s Presidency. Source: The Nevada Gaming Control Board
|New Jersey Gross Gaming Revenue||2017||2018||2019(January-September)|
Table 2: New Jersey Gross Gaming Revenue Under Trump’s Presidency. Source: The Division of Gaming Enforcement
In contrast, Obama’s second term in office marked a dramatic decrease in New Jersey’s casino GGR. To point a fact, the state produced $2.9 billion in gambling GGR in 2013, but the next year, that figure was reduced by a whopping $500 million (Table 3). In 2014, Nevada also suffered a $200 million loss in GGR of its land-based casinos (Table 4).
|Nevada Gross Gaming Revenue||2013||2014||2015||2016|
Table 3: Nevada Gross Gaming Revenue Under Obama’s Presidency. Source: The Nevada Gaming Control Board
|New Jersey Gross Gaming Revenue||2013||2014||2015||2016|
Table 4: New Jersey Gross Gaming Revenue Under Obama’s Presidency. Source: The Division of Gaming Enforcement
The above figures point to the obvious fact — online gambling is thriving under Trump’s presidency. However, what will happen next to gambling, given that the rhetoric of Trump’s democratic rivals is quite controversial and unclear?
Democrats and Gambling: Control Is Key
Although the DOJ changed the Obama-era ruling of the Wire Act, President Donald Trump is still the best ally of the gambling industry. Unfortunately, the same cannot be said about his Democratic competitors: Senators Chuck Schumer, Elizabeth Warren, as well as former Vice President Joe Biden. Quite possibly, their aim is to control the market to the detriment of gamblers.
Senator Chuck Schumer
The story of the Democratic Party’s negative attitude towards gambling begins with Senator Chuck Schumer. Schumer was anything but excited when the Supreme Court rescinded the Professional and Amateur Sports Protection Act of 1992 last year. He acted swiftly, creating the Sports Wagering Market Integrity Act in August 2018.
If approved, the Sports Wagering Market Integrity Act would pressure the states to abide by the regulations, with the government monitoring all transactions and imposing high taxes.
According to Barclays, the U.S. legal sports betting market could produce a $10 billion net revenue per year. So it’s no wonder that Senator Schumer is interested in federalizing the sports betting market. What’s more, the Sports Wagering Market Integrity Act suggests to restrict the types of bets, forcing U.S. gamblers to bet only the way that the government would order.
“The integrity of sports is too precious to not protect as best we can,” says Schumer, masterly blurring the line between the actual sports and betting on them.
Senator Elizabeth Warren
The New York Times gives Senator Warren a 21% chance of winning the presidential election. If she does, Warren will become the first female president in the White House. But what would online gambling go through under Warren’s presidency? It seems likely it wouldn’t thrive as it’s previously done with Trump.
Over the years, Warren has made her opinion on digital gaming clear — she’s not a fan of it, going as far as saying that it makes her “uneasy” because it could undercut all the protection the state provides. Land-based gambling, however, doesn’t make her worried as she calls it a “very different thing from online.”
Warren should be aware that every form of gambling carries with itself a certain risk, but at least online players can’t find themselves in a situation like the 2017 Las Vegas shooting victims did. That, Mrs. Warren, should make you more uneasy than internet gambling.
Former Vice President Joe Biden
And as if that wasn’t enough, the leading candidate of the Democratic Party, Joe Biden, has kept quiet on the issue of gambling. Yet his congressional voting history depicts a man who is not really fond of online gambling.
The former Vice President seems to be against encryption and pro-FBI, which indicates he would also strive to control the market if he became president. For example, Biden supported a bill that would ban residents from recording songs from satellite and internet radio, encouraging the Justice Department to take legal actions against file sharers.
Additionally, Biden sponsored two bills — the Violent Crime Control Act and the Comprehensive Counter-Terrorism Act — both of which seemed to be aimed at banning encryption. Control seems to be Biden’s middle name.
A lot can be said about President Trump’s executive orders and his time in the White House; some support him, while others are fiercely against him. Regardless of which side you’re leaning on, you should acknowledge that his time in the office has been beneficial for gambling, even marking an increase in the gross gaming revenue.
That growth might be attributed to the booming economy or Trump’s past involvement in the gambling industry of Atlantic City. Whatever the real reason, gaming operators are probably looking favorably on his presidency.
But there are telltale signs that show they won’t do the same if a Democratic candidate takes office in 2020.
Out of all of them, there are two leading candidates in the race whose presidency might impose restrictions on gambling — Elizabeth Warren and Joe Biden. The former has clearly shown her disdain for online gaming, while the latter has wisely kept mum on the question, prompting voters to wonder what he has up his sleeve.
Well, if Trump does get impeached and either of the two become president, we will see what the future has in store for internet gambling under Warren or Biden.
For now, it might be wiser to live in the moment and enjoy all the good things that Trump’s presidency has brought to gambling.