In April 2025, US President Trump announced further global tariffs, causing severe shocks in the financial markets. The three major US stock indices plummeted by 4%-6% in a single day, with technology stocks, retail stocks, and manufacturing stocks all suffering significant losses, leading to a "Black Friday" in global stock markets.
Against this backdrop, the global gambling industry—especially US online gambling operators that rely on international trade and cross-border capital flows—will face profound impacts. This article will analyze the long-term impact of Trump's tariff policy on the gambling industry and discuss possible industry responses.
How do tariff policies directly impact the gambling industry?
1. Soaring costs of technology hardware, increasing operational pressures for online gambling platforms
The gambling industry heavily depends on high-performance servers, data centers, and electronic payment systems, and Trump's tariff policy imposes high tariffs on semiconductors and electronic components (e.g., 34% on China, 46% on Vietnam), significantly increasing the IT infrastructure costs for gambling companies.
Increased costs for servers and cloud computing: Many online gambling platforms (such as DraftKings, FanDuel) rely on server chips manufactured in Asia, and tariffs could lead to a 20%-30% increase in hardware procurement costs.
Increased transaction fees for payment systems: Cross-border payment institutions (such as Visa, Mastercard) may adjust transaction rates due to tariffs, affecting the fund clearing efficiency of gambling companies.
2. Decreased consumer spending power globally, potentially shrinking betting amounts
Trump's tariffs have driven global inflation, weakening consumer disposable income. JPMorgan predicts that the probability of a global recession in 2025 will rise to 60%, directly affecting the scale of betting in the gambling industry:
Slower growth in the US sports betting market: The total revenue of the US gambling industry reached $172 billion in 2024, but if the economy enters a recession, entertainment betting might decrease by 10%-15%.
Reduction in high-net-worth clients in Asia: High-stakes players in markets such as China and South Korea may reduce cross-border gambling consumption due to currency depreciation or capital controls in their countries.
3. Dampened gambling stock valuations, increased financing difficulties
Evaporation of market value for US gambling companies: DraftKings (DKNG) stock price plummeted by 12% on the day the tariff policy was announced, and Penn Entertainment (PENN) fell by 9%.
Cooling of IPO and M&A activities: If market turmoil continues, the listing plans of emerging gambling technology companies (such as SBTech, Kambi) may be delayed, slowing industry consolidation.
Long-term structural impacts: How can the gambling industry adjust its strategy?
1. Localization of supply chains, reducing dependence on Asian hardware
Building private data centers: Companies like Caesars Entertainment have invested $500 million in building a private cloud in Las Vegas, reducing dependence on external supply chains.
Collaboration with Western semiconductor manufacturers: Gambling companies might turn to Intel or TSMC's US factories for chip procurement, although at a higher cost, to avoid tariff risks.
2. Diversification of business, reducing reliance on sports betting
Expanding into esports betting: Esports betting is less affected by the real economy and has a stable young user base.
Developing social gambling (Social Gaming): Models like Zynga Poker use virtual currency to reduce regulatory risks.
3. Lobbying the government for gambling industry tariff exemptions
The American Gaming Association (AGA) has initiated lobbying, requesting that gambling servers and payment systems be included in "critical infrastructure" to seek tariff reductions.
The EU might introduce countermeasures: If the US continues to impose taxes, European gambling markets (such as Bet365, Entain) might increase digital service taxes on US companies.
The worst-case scenario: Will the global gambling industry face a "winter"?
Pessimistic scenario: Comprehensive trade war + economic recession
Another 30% drop in US gambling stocks: If the S&P 500 enters a bear market, the speculative gambling sector might face more severe sell-offs.
Bankruptcy wave among small and medium-sized gambling companies: Companies with tight cash flows (such as small and medium-sized online casinos) might go bankrupt due to skyrocketing operational costs.
Optimistic scenario: Policy adjustment + industry resilience
Tariff policy relaxation in 2026: If Trump does not win re-election, the new government might adjust trade policies, easing market panic.
The gambling industry's recession-resistant attributes emerge: Historical data shows that during economic downturns, lotteries and low-cost gambling (such as scratch cards) actually grow.
Conclusion: The "high volatility" new era of the gambling industry
Trump's tariff policy not only impacts the stock market but also reshapes the competitive landscape of the global gambling industry. In the short term, rising technology costs, consumer downgrading, and financing difficulties are the three major challenges; however, in the long term, the industry might find new growth points through supply chain adjustments, business diversification, and policy lobbying.
Key trend predictions:
2025-2026: Acceleration of gambling industry consolidation, with small and medium operators being acquired.
Post-2027: If the global economy recovers, the US online gambling market might experience a new boom, but industry concentration will significantly increase.
For investors, the current high volatility of gambling stocks represents both a risk and a potential opportunity for bottom-fishing. Close monitoring of policy directions, corporate cash flows, and user growth data is essential to seize opportunities in this "tariff storm."
