The new president’s longstanding ties to the gaming world -having developed casinos in Atlantic City during the 1980s and 1990s- have led investors to believe that his government will prioritize relaxed regulations and foster a favorable tax environment. By Damian Martinez, journalist at G&M News.
A ripple effect has swept through various sectors of the economy after Donald Trump’s victory in the 2024 United States (U.S.) presidential election. His win, emblematic of his pro-business stance, has injected optimism into markets that were already cautiously hopeful under the potential for reduced regulation and corporate-friendly policies.
But for casino and gaming companies, the stakes are uniquely high: Trump’s past associations with the gambling industry, coupled with the expectation of a pro-betting administration, have spurred stock price surges and speculative interest across the sector.
STOCK PRICES INCREASE IN MAJOR OPERATORS
Trump’s longstanding ties to the gaming world -having developed casinos in Atlantic City during the 1980s and 1990s- has led investors to believe that his administration might prioritize relaxed regulations and foster a favorable tax environment. Though Trump no longer holds direct stakes in casinos, his legacy as a gaming mogul reassures stakeholders that his understanding of the industry runs deep. Furthermore, Trump’s promise to ease regulatory constraints on industries he deems vital to job creation and economic growth has raised hopes for casino and sports betting companies seeking to expand their reach across state lines.
In the day following the election, stock prices in major casino and betting companies, including industry giants like MGM Resorts, Las Vegas Sands, and DraftKings, witnessed notable increases. Shares for these companies rose by several percentage points, reflecting a broader surge in confidence across gaming-related investments. Analysts suggest this uptick is largely driven by market expectations that a Trump administration will bolster the expansion of sports betting and online gaming regulations, allowing these companies to capture new revenue streams in an industry that has seen record-breaking growth in recent years.
THE IMPACT ON WALL STREET
Moreover, Trump’s election has reignited Wall Street’s enthusiasm for casino and sports betting stocks. After his win, the shares of major gaming corporations, such as Wynn Resorts and Caesars Entertainment, experienced a rise of around 5-7%. Analysts attribute this increase to Trump’s track record of supporting deregulation, a stance that could benefit online gaming operators and physical casinos alike. The promise of more favorable tax policies also adds to this optimism, with many investors anticipating that Trump’s administration will cut corporate taxes, a move that would directly increase profitability for U.S.-based casino operators.
DraftKings and FanDuel, two of the largest sports betting platforms in the United States, have also seen a jump in share prices. Trump’s win suggests a shift toward lenient federal oversight, which many believe will allow states more freedom to regulate and expand sports betting markets. With a sizable portion of U.S. citizens showing interest in legalized sports betting, the potential growth in this area is significant. Betting companies are expected to capitalize on this opportunity to push for interstate agreements that would allow them to expand their user base beyond individual state borders.
TRUMP’S DEREGULATORY AGENDA
The most substantial impact of Trump’s victory might be felt by online betting and gambling companies that hope for a more favorable regulatory framework. During his previous term, Trump’s administration advocated for deregulation across various sectors, and industry leaders are optimistic this will extend to the online gambling space. Although online casinos and sports betting platforms operate legally in several U.S. states, federal restrictions still limit cross-state operations and impose strict regulations on these businesses. A Trump-led administration could spearhead changes to federal policy that would lower barriers for online operators, allowing them to operate across state lines and potentially access a wider audience.
International companies in the betting and online gaming sectors are also keeping a close eye on these developments. Should Trump’s administration take steps to open up U.S. markets further, foreign companies like Entain and Flutter Entertainment, which own brands like BetMGM and FanDuel, may see new opportunities for investment and partnership with U.S.-based operators. The relaxation of regulatory measures would not only increase competition within the industry, but could also lead to a wave of mergers and acquisitions as companies position themselves to capitalize on the expanding market.
CAUTION IS ADVISED
While Trump’s election has led to an immediate boost in casino and betting stocks, some analysts urge caution. They note that while the stock market’s initial response reflects optimism, the true impact of any regulatory changes will only materialize over time. Moreover, although a Trump administration is expected to be favorable toward gambling and betting, the political landscape remains complex. If Trump’s policies face significant opposition in Congress, or if his stance on gambling becomes more conservative, the expected regulatory relaxation may not come to fruition as anticipated.
Casino industry insiders are also concerned about potential volatility. Trump’s prior term was marked by fluctuations in policy direction, which could bring uncertainty to gaming companies reliant on consistent regulatory frameworks. Yet, others in the industry view this unpredictability as manageable given the lucrative possibilities a more gambling-friendly administration would bring. For them, Trump’s presidency represents a calculated risk worth taking.
