Maybe it’s because of all the noise about sports betting, SPACs, Covid-19, election lawsuits and the bizarre world of low casino revenues and high profits, but very little is being said or written about what a Joe Biden presidency will mean for the gaming industry.
So, here are a couple of thoughts:
- Online gaming will get the all-clear. It’s highly unlikely that the new leaders in the Department of Justice will continue to appeal New Hampshire’s 2019 victory against the DOJ. In that case, filed in 2018 on behalf of the New Hampshire Lottery Commission, District Court Judge Paul Barbadoro rejected an opinion from the DOJ’s Office of Legal Counsel that expanded the 1962 Wire Act to apply to all forms of online interstate gaming, not just sports betting.
The DOJ’s chances for success in the case were always slight, both on legal grounds and on practical, political grounds as more states legalize online wagering and more state congressional delegations have turf to defend. That reality became clear when the DOJ basically said state lotteries can’t sue, because there’s no evidence it would oppose state lottery online operations.
Now, with states needing more revenue because of the pandemic, the chances of a federal ban are even less likely, regardless of the political party in power.
- Gaming generally should be off the hook for federal interference, as moralizing about gambling doesn’t motivate any part of Joe Biden’s base.
The bigger issue for gaming has to do with the economy. When will full recovery come?
On the bearish side, it appears that it will be the second half of 2021 before the world returns to normal, and it might be sometime in 2022 before people and businesses book their travel and conventions at the same level as in the pre-Covid era. There are millions of unemployed people and closed businesses that won’t bounce back at the flip of a switch.
On the bullish side, the vaccines have arrived, doctors have learned how to treat Covid, therapeutics are entering the market, and the release of pent-up demand for entertainment and socializing may far outweigh any delay in the return of normal travel and business bookings.
As I’ve written in this space before, it’s worth noting that the double whammy of the Spanish Flu and World War I were followed by the Roaring 20s.
There also are the arguments that business travel won’t rebound fully because we have learned how to Zoom. Here’s a prediction: virtual meetings largely will prove to be a supplement to in-person meetings, not a replacement.
Unemployment isn’t the only factor affecting the economy’s buying power. There’s also the estimated $1 trillion-plus in increased savings as consumers have lowered spending during the pandemic. The release of money by consumers eager to get back to normal life should swamp the negative effects of unemployment.
Further, the Fed is clearly on record as saying it will provide whatever accommodation is needed to support the economy to the transition back to normal.
And that gets us back to Joe Biden. A Democratic administration is much more likely to provide financial relief throughout the economy. How much relief and how long it lasts may be problematic, but for pandemic recovery, you can bet on it.
