President Trump’s Opening Salvo Unsettles Online Gambling Industry

Any hope that President Donald Trump might be a dependable ally in the White House for the online gambling industry vanished on January 10 when Republican Senator Jeff Sessions of Alabama testified during his confirmation hearing to become the next U.S. attorney general.

Sessions said he plans to “revisit” the 2011 opinion by the U.S. Department of Justice, which allows states to legalize and regulate internet gambling within their borders.

Sessions is still waiting to be approved by the Senate Judiciary Committee. His hearing was blocked by Democrats on Tuesday hours after Trump fired acting attorney general Sally Yates for refusing to defend his executive order banning certain travellers and refugees.

A spokesman for the Senate Judiciary Committee told GamblingCompliance that the hearing was rescheduled for Wednesday. If approved, his nomination to serve as attorney general will head to the full Senate.

The controversial opinion, released on a Friday — two days before Christmas in 2011 — “shocked” him, Sessions told the Senate Judiciary Committee.

Behnam Dayanim, a gaming attorney with the Washington, D.C. firm of Paul Hastings, said a Trump administration does not bode well for the online gaming industry and puts “at risk” the Justice Department’s opinion from 2011.

“Even worse, a Republican-controlled Congress may seek to prohibit internet gambling through legislation,” Dayanim said.

Dayanim noted the powerful influence of Las Vegas Sands chairman Sheldon Adelson, who attended Trump’s inaugural speech and luncheon on January 20.

Adelson is one of the Republican Party’s most generous donors and for the past several years has led a high-profile crusade to ban online gambling, citing concerns of addiction.

“Until we have a clearer indication of the extent to which Adelson’s influence will drive the administration’s internet gambling agenda, the prospects for that outcome cannot be handicapped,” Dayanim said.

Mark Hichar, a gaming attorney in Boston with the firm of Hinckley Allen, said Sessions’ comments already have caused concern among state legislators, regulators and gaming operators.

“Certainly, gaming authorities and operators are incorporating these comments into their deliberations when considering whether to make significant new investments into internet gaming,” Hichar said.

Hichar said Sessions’s statements are inconsistent with previous statements by President Trump and his daughter, Ivanka, who expressed interest in entering the online gaming market even before the Justice Department released its opinion in 2011.

Just a few years ago, Trump was quoted as saying internet gambling “should be approved here. An awful lot of money is leaving the U.S. that should and could stay in this country.”

However, it is not just the internet gambling industry that is casting a wary eye at the Trump administration.

Although saying they want to give President Trump a chance, tribal gaming officials have not forgotten the harsh insults he hurled at them when his casinos in Atlantic City competed against theirs.

Testifying before the House Native American Affairs Subcommittee in October 1993, Trump claimed tribal casinos had been infiltrated by organized crime — a charge that has never been proven.

“While it is well known that President Trump opposed Indian gaming in the early 1990s, it is less well known that in later years he partnered with tribes on gaming development and supported tribes in the federal recognition process with an eye toward eventually working with them on gaming development,” said Eric Eberhard, an assistant law professor at the University of Washington and a former staff director of the Senate Indian Affairs Committee.

If there is a sector of gaming that may benefit from the Trump administration, it may be sports betting.

The U.S. Supreme Court has invited the Trump administration’s solicitor general, who has yet to be named, to weigh in on New Jersey’s appeal to legalize and regulate sports betting within its borders.

Trump has consistently supported lifting the federal sports-betting ban included in the 1992 Professional and Amateur Sports Protection Act

The President also has a history of competitive enmity with the National Football League, which has joined with the nation’s three other major professional sports leagues and the National Collegiate Athletic Association, in opposing New Jersey’s sports-betting appeal.

As the owner of the New Jersey Generals in the defunct United States Football League, Trump won all of $3 in a 1986 anti-trust lawsuit against the NFL.

Yet in spite of his previous links to gambling, the industry is unlikely to be a priority for Trump in the White House, according to Eric Herzik, chairman of the political science department at the University of Nevada at Reno.

“I think we are in a kind of sorting out process on all issues with Trump, and the same holds for gaming,” Herzik said.