Trump card: What Donald's presidency means for the sector
A man whose name has previously been on the front of casinos is about to enter the White House Oval Office, but what does it mean for online gambling?
The clearest statement Donald Trump ever issued on online gambling came in October 2011, when he was quoted in Forbes magazine saying: “This has to happen because many other countries are doing it and like usual the US is just missing out.”
The former casino mogul was said to be planning a joint online casino venture with the billionaire hedge fund manager Marc Lasry, which of course never came to pass thanks to the lack of online gambling regulation.
Now of course, the shoe is on the other foot, and The Donald may have the chance to push online gaming regulation through, but may not be the one to take advantage of it.
Trump’s influence starts with his power to appoint his cabinet and key among those choices is the selection of an Attorney General, who would theoretically have the power to override the 2011 Department of Justice decision that gave states the right to choose whether to allow online gambling.
Trump plumped for Jeff Sessions, a strict social conservative who has a history of anti-online gambling, coming out in 1997 as a supporter of the Internet Gambling Prohibition Act, but who has more recently been silent on the issue.
Indeed, he has declined to co-sponsor versions of the Restoration of America’s Wire Act (RAWA), and according to Washington gaming lobbyist Dan Mauer, Sessions is a relatively neutral AG candidate for the egaming sector.
“Sessions is a staunch conservative but it’s not like this is Lindsey Graham, who is on record as opposing online gambling and has introduced legislation to ban it.
“Sessions wrote our most recent rewrite of bankruptcy law and that’s where he’s lived rather than being active on gaming laws. And let’s remember that Donald Trump is the president. If Donald Trump doesn’t want him to revisit the DOJ decision, then he’s not going to.
Mauer adds that the DOJ decision is also “rock solid” and unlikely to be easily reinterpreted in favor of an egaming ban.
“Of course it’s only opinion, but there’s a lot of logic in there and it’s well thought out and I know a lot of lawyers would say that’s probably the correct interpretation. Does Sessions scare me? No because he works for a former casino owner and hasn’t really talked much about online gaming.”
RAWA revival
So states’ rights to decide appear to be safe, but what about the federal landscape. A Trump SuperPAC is said to have received a $25m donation from Sheldon Adelson during the election campaign, while Adelson and Steve Wynn are said to be on the committee planning Trump’s inauguration.
Both men of course own land-based casinos and are opposed to the expansion of online gaming. Adelson in particular is known for backing RAWA, so could these casino moguls hold some sway with the president?
“Anybody who tells you they know where Donald Trump stands on gaming is lying to you,” says Mauer. “But I tend to think he’s closer to support than the RAWA/Sheldon Adelson coalition.
“In fact, one good thing about Trump is that he’s not really beholden to anyone since he didn’t raise that much money and he’s a total political outsider.”
The Republican majorities in the House and Senate indicate that an anti-online gaming bill could be passed if senior Republican figures wanted to, but a RAWA-type bill introduced by Arkansas Senator Tom Cotton before the election went nowhere.
Indeed, Mauer suggests that Trump’s grand policy plans and unconventional background could actually go the other way and create an avenue for positive federal egaming legislation.
Omnibus approach
Trump’s tax plan alone is expected to cost around $2.6trn over the first decade, according to his own campaign, while the costs of a grand infrastructure plan (not to mention ‘The Wall’) could also run into the trillions.
“He’s going to be looking all over for money and taxing online gaming and DFS at a federal level could be an option,” says Mauer. “I’m not saying it’s likely but it certainly could be on the table.”
And the avenue for that federal option could already be in play, via Congressman Frank Pallone who said before the election he wanted a “wholescale review” of the “patchwork” federal laws affecting gambling, including the Wire Act, PASPA and UIGEA.
Pallone added that he was planning to introduce new legislation to regulate “all types of gambling”, including sports betting, DFS and online gaming.
And while Pallone, the ranking Democrat in the House Energy and Commerce Committee, was said to be hoping for some more Democrat seats at the election to help advance his cause, the Republicans might ask him to draft pro-gambling laws as part of their hunt for cash.
“That’s something that could get some traction later on in the year,” says Mauer. “It might be smart to frame that legislation around DFS at the top because that’s the elephant in the room, but if they can start with DFS and wrap in online gaming, I could see something being done there.
“Trump’s going to want to move a lot of things and make his mark and [gambling] is an industry where he has more experience than any other president ever, so I wouldn’t put it past him to take Pallone up on his offer.”
Other players
One wildcard in the picture is New Jersey Governor Chris Christie. At the time of writing Christie was reported to be in consideration for the secretary of energy or secretary of homeland security role.
While neither of these positions would have a direct influence on online gambling matters, the presence of such a fervent sports betting and online gambling supporter would undoubtedly be a positive influence in the Trump cabinet.
The final character to be aware of, according to Mauer, is Trump’s vice-president Mike Pence, who could be a uniquely powerful vice-president given his relative knowledge of Washington and politics.
Unfortunately Pence is known to be anti-online gambling, having vetoed a bill to allow online horse wagering when Governor of Indiana, and publicly supported the Wire Act.
“It seems like Trump is going to outsource a lot of his policy-making to Pence and he doesn’t have any love for online gaming,” says Mauer. “He’ll take his direction from the president but unless Trump feels strongly one way or the other, Pence may get to impose his will and that is certainly one person we will be keeping a close eye on.”
The upshot then, is that there is little certainty for the future. States’ rights would seem likely to stay intact given the 2011 DOJ ruling, so markets in New Jersey, Delaware and Nevada appear safe. On a federal level it is considerably more up in the air. Could Trump’s hunt for new funds lead him to tap into online gambling? Or could anti-gambling voices like Adelson and Pence revive RAWA-type legislation? Ultimately the only person that knows the answer to that is Donald Trump.