Prior to running for president, Donald Trump made it clear that he was in favor of online gambling and believed the U.S. was falling behind other nations like the UK for an industry that was imminent. For that reason, many people, including myself, felt Trump would be good for gambling interests in the United States, if he won the election. But a reliable source close to the Republican party has told me that likely isn’t the case.
According to my source, who asked not to be named for obvious reasons, indicated that Trump’s advisors have told him to look for ways to mend some fences with Republican adversaries and his team believes this could be an easy way to do so without causing much upset with the public. Jason Chaffetz, the Representative from Utah, Lindsay Graham, the Senator from South Carolina and Marco Rubio, the Senator from Florida all co-sponsored Sheldon Adelson’s Restoration of America’s Wire Act (RAWA) and all 3 were very vocal against Trump due to his language and actions during the campaign. This could be a way to solidify their support going forward.
RAWA aims to “clarify” the 1961 Wire Act so that all forms of communication including the internet are banned for gambling and to nullify the 2011 Department of Justice (DoJ) opinion which stated that The Wire Act only applies to sports betting. RAWA, as it is written does not provide a carve out for states that have already implemented online gambling so New Jersey, Delaware and Nevada would be in violation of the law, if RAWA passes. Only fantasy sports, lotteries and horse racing would be exempted since they were already legal per the Interstate Horse Racing Act and the UIGEA.
Casino magnate Sheldon Adelson contributed millions to various Republican campaigns this election and per my source, Trump has secretly stated that he will sign RAWA if it gets to his desk. While Trump may have no issue with online gambling personally, he knows this is a pet project for Chaffetz, Graham and Rubio and it would also be a huge favor for a large Republican donor. And most importantly Trump and the party knows that online gambling is an issue that won’t upset too many in the public.
One concern of course is that Chris Christie legalized online gambling in New Jersey at the request of the casinos, legislators and public and despite the falling out recently between Christie and Trump (likely relating to Christie charging Trump’s son in law’s father), Trump still feels a debt of gratitude to Christie, who was one of the first to offer his support. This would be a great blow to Christie and to his constituents. How Trump will get around that issue is uncertain although my source feels there will be a solution all can live with. This will likely entail a grandfathering clause for New Jersey, Delaware and Nevada or possibly another form of compromise such as asking the courts to revisit New Jersey’s beef over PASPA and allow them to offer sports betting which is something that both the state’s racetracks and casinos have been requesting to help boost interest in their products by adding sports betting to the mix.
“The one wild card in all this is California.”
It’s uncertain if Adelson will agree to grandfathering in the three states currently offering the product but my source says it shouldn’t be an issue. Adelson does not have a casino in New Jersey nor does he want one and Nevada would be limited to what they currently offer which is strictly online poker. What Adelson is most afraid of is interstate casino gambling which he feels will open the floodgates and greatly harm land based casinos. As many will recall when Delaware tried to introduce sports betting, which they were entitled to do because of the carve out in PASPA, the courts told them they could only offer parlay tickets on NFL football rather than a full gamut of sports betting since that was all they were offering at the time. And poker is not a big money maker for the casinos, plus interest is waning for the product so there is a good chance Adelson will agree to the carve out if online casino games like blackjack, slots, roulette and craps are banned. And the bill sponsors will simply agree to follow Adelson’s stance since he has been leading the charge on this one since day one. As for the other casinos, the loud public support by MGM CEO Jim Murren for Hillary Clinton makes it easy for Trump to say he owes nothing to the current casino owners, who will certainly appeal the decision to rewrite the Wire Act.
The one wild card in all this is California. California has dilly dallied about online poker for some time now because of infighting between the state, the poker rooms and the tribes, so there is a question as to what will happen when they want to offer online poker. The logical answer is that Trump will say “too bad,” especially since California was a state that largely voted against him, but it’s almost certain that Trump would not want to upset a state he likely values for his business and will rely on after he finishes his presidency. I asked my source who said he truly doesn’t know how they will rectify that one but he says that if the other three states are grandfathered in, then California may be offered a one-time offer to opt out of RAWA the same way New Jersey was given the option of opting out of PASPA in 1992, despite not offering sports betting at the time. The likely proviso would be that the opt out would strictly be for poker.
So, for those who voted for Trump thinking he would open the gateways to online gambling if elected may very well find that the exact opposite is true. It’s unfortunate, but not surprising.
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