Why Donald Trump Is Great For The Gambling Industry
Published on 19/01/18
Gambling within the US has a long and complicated history. It’s perfectly legal at federal level, but that doesn’t stop individual states having the final say on what and what isn’t legal within their borders. Power is handed down to local governments in order to enable them to come to their own conclusions on gambling. Some states such as Nevada, which relies heavily on income from casinos, are relaxed about gambling, others meanwhile have much stricter rules in place and enforce total bans. There are plenty of states which opt for the middle ground, with licensed venues such as racetracks, as well as state lotteries and casino resorts. All of these, however, come with heavy regulations attached.
In his first year as President, Donald Trump has made a point of cutting regulations wherever possible. Believing many to be unnecessary and that they stand in the way of progress, Trump’s war on regulations could mean good news for gambling.
A quick look at the UK shows that legalised gambling not only works, but contributes billions to the economy every year. In comparison, the US is still some way behind, but with Trump in the White House, there have been encouraging signs for the gambling industry.
Tax Laws Overhaul
As recently as December, Trump approved substantial tax cuts to businesses and individuals, which crucially included the gambling industry. As part of the ‘Tax Cuts and Jobs Act’, corporate tax was heavily slashed. That means from this year, corporations within the US will only be liable to pay a 21% statutory tax rate, a significant decrease on the former rate of 35%.
It represented the first overhaul of this scale to U.S. tax laws in over 30 years and the American Gaming Association quickly praised the change, stating that it meant ‘significant wins’ for the gambling industry. Under the new laws, any individual who itemises deductions in their tax returns will be permitted to deduct gambling losses, so long as it’s less than their total winnings.
More Money For Gamblers
So, with the help of the new regulations, a player who manages to scoop $25,000 on slots will now be able to deduct anything up to that amount in gambling losses. Michael Busler, who heads up the finance department at Stockton University in New Jersey, believes the bill will certainly accelerate growth within Atlantic City. In its simplest terms, the tax bills mean ‘people will have more income’ – and additional income means more money spent on ‘recreation’.
Busler also believes the bill will have a positive impact on casino operators throughout the U.S, not just Atlantic City. Looking at the ‘lower corporate tax rate’, as well as the ‘faster write off options for capital expenditures’, Busler confidentiality believes casino profits will be ‘higher’, which in turn leads to additional investment and expansion.
Gambling Friendly President
It’s also worth bearing in mind that Trump’s tax cuts are a permanent measure, unlike cuts for individuals which are due to expire in 2026 in order to comply with budget rules within the Senate. So there is only one way the gambling industry can go under a Trump presidency.
President Trump stands apart from his former counterparts in so many ways, but he’s also the only president ever to have run several major casinos. While it’s true that immigration, the border wall and global politics have taken up much of his time during his first year, his friendly attitude towards gambling could signify a huge change in the near future, bringing about a more unified approach to gambling throughout the entire country.
Trump and Gambling
The casino industry within the US is currently worth more than $240 billion. While several smaller casinos and legalised venues contribute to this figure, the vast majority of the gaming industry’s wealth is down to New Jersey and Nevada. Las Vegas stands head and shoulders above any other location in the country, if not the world, in terms of gambling revenue. Boasting 122 casinos, it’s responsible for roughly 50% of all the gambling taxes and income within the US. Although nowhere near as big when it comes to revenue, Atlantic City is also something of a hotspot, and that’s, in part at least, down to the actions of the current President in the ’80s and ’90s.
Despite Trump’s troubles with casinos in the region, he did regenerate the area and it is now thriving once again, and although casinos may have taken a back seat in terms of his portfolio in later years, his relationship with the gambling industry is far from over. Today, there is a whole new wave of gamblers in the US eagerly anticipating what Trump’s next move might be. Throughout the country, gambling is becoming more accepted and commonplace. States such as Colorado and California, as well as Delaware and Michigan, have either already relaxed laws surrounding gambling or are about to. It’s online gambling, however, which still has some way to go, with gamblers in some states facing uncertainty over whether they’re operating within or outside of the law.
This is where Trump has the power to change the entire gambling landscape. If the president chooses to bring gambling under Washington’s control, then Trump is highly likely to look favourably on American casino brands who want to take advantage of hugely lucrative markets such as online poker. He could also look favourably on pre-existing casinos, so long as limits on who exactly is permitted to provide online gambling were in place. If that were to happen, it would mean profits would stay with American businesses and that job losses would be prevented, which were two key points of his election manifesto.
Could Sports Betting Be Legalised?
Away from land-based and online casinos, there is a wealth of prospective punters waiting for news on whether or not sports betting will be legalised under President Trump. Although he has stayed fairly quiet on the subject since taking office, in the 90s he frequently spoke favourably when it came to taxes which could be generated from any legal sports betting taking place in the US. He is also on record as saying that both sports and fantasy sports betting is already taking place, so it may as well be taken advantage of for tax revenue purposes.
For now, the future seems uncertain. In the short term, it would appear the President is busy fighting bigger battles. It’s worth bearing in mind that we’re still only a year into the Trump presidency, so it may be some time before any we hear any significant announcements on gambling. One thing is for sure though, the gambling industry is in a much better place with Trump in the White House than it was a year ago.
The tax reforms, coupled with the President’s favourable stance on gambling, means the entire industry could soon see its profits rise. Bigger profits mean more money for the US economy, which in turn means more jobs, all of which could see more states soften their stance on legalising gambling, resulting in a more uniform and prosperous gaming industry throughout the entire country. All of that, however, remains a long way off, so for the time being at least, we’ll just have to watch this space.