RSI CEO Says Trump Unlikely to Push New Gaming Regulations

Posted on: November 27, 2024, 01:34h. 

Last updated on: November 27, 2024, 02:26h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

President-elect Trump and his team are unlikely to prioritize fresh gaming regulations and are likely to take a laissez faire approach to the industry.

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Rush Street Interactive CEO Richard Schwartz believes a second Trump term will be good for the gaming industry. (Image: Rush Street Interactive)

That’s the take of Rush Street Interactive (NYSE: RSI) CEO Richard Schwartz. Speaking at the Needham Consumer Tech and Ecommerce Virtual Conference earlier this week, Schwartz said the president-elect could be supportive of gaming expansion, including iGaming.

I think it’s always helpful to have a president who is not opposed to gaming expansion, which is the case with President-Elect Trump,” said Schwartz.

Schwartz expects a marked difference in gaming views in Trump’s second term compared with his first. While the Supreme Court ruling on the Professional and Amateur Sports Protection Act (PASPA) was issued during Trump’s first term, the Department of Justice (DOJ) at the time pursued litigation that could have crippled the online gaming industry.

As was the case during President Obama’s time in office, Trump’s Justice Department interpreted the Wire Act of 1961 as having applications beyond sports betting, thus targeting internet casinos and lotteries, and online poker. That view was challenged by attorneys general in multiple states with a federal court ruling in 2021 that the Wire Act’s purview was limited to sportsbooks.

RSI CEO Sees 2025 Possibilities for iGaming

With the Trump Administration unlikely to interfere with gaming regulations, Schwartz sees pathways to iGaming expansion in 2025.

Currently, just seven states — Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, Rhode Island, and West Virginia – permit that form of wagering. On the iGaming legislative front, 2024 was widely viewed as a disappointment because no new states joined that group, but that could change in 2025 as more states seek new revenue sources.

“We know that when an iCasino is added to a state with legal sports betting, about three-quarters of the taxes comes from iCasino verses sportsbooks, so it’s a very profitable way to raise taxes,” said Schwartz at the conference.

Among large states, there’s been speculation that Illinois and New York could be candidates to approve internet casinos in 2025.

Tribes Could Face iGaming Hurdles

While it appears unlikely the second Trump Administration will wield a heavy hand on gaming regulations, some experts believe that sentiment is reserved for commercial operators and that the regulatory climate for tribal gaming entities could be different.

That speculation stems from Trump’s appointment of former North Dakota Gov. Doug Burgum as Secretary of the Interior. As governor, Burgum negotiated at least five tribal gaming accords for land-based casinos, but he was standoffish regarding iGaming.

“While we understand and appreciate the desire by some of the tribes to extend online gaming beyond their reservation boundaries, a clear legal path does not exist for the governor to grant such a broad expansion of gaming in the compact,” he said in a 2022 press release.

Supporters of tribal iGaming believe the Indian Gaming Regulatory Act (IGRA) allows for internet casinos because the act is clear in stating that if the wagering takes place on tribal lands and winning bets are paid out from those properties — events that would occur in iGaming scenarios — then the act has applications beyond brick-and-mortar casinos.