Hillary Clinton was the heir apparent to Barack Obama, the candidate who beat her so soundly in 2008. Obama took to the campaign trail to boost Hillary’s appeal, but even a president with a 55 percent approval rating couldn’t convince enough disgruntled Democrats to vote for her. And then the shocking result was announced in the wee hours of November 9. Former casino owner Donald Trump was declared the 45th president of the United States.
The results caused much consternation among industries that were preparing for a Clinton presidency, including the gaming industry. MGM President and CEO James Murren, a registered Republican and chairman of the American Gaming Association, announced in September that he was bucking his party’s nominee to vote for Clinton. Former Harrah’s Chairman and former AGA chairman, an avowed Democrat, Phil Satre recounted his regrettable experience partnering with Donald Trump in Atlantic City in the 1980s, and advised voters to reject the New York real estate mogul.
At G2E in October, AGA President and CEO Geoff Freeman made it clear that Clinton was the preference for the association. So following the election, Freeman released a letter to the industry, saying in part that the AGA now “turns its attention to proactively engaging with the new administration and incoming members of Congress.”
“While we are optimistic a Trump administration will feature significantly more restrained federal agencies than what our industry (and many others) experienced over the last eight years, the challenges before us remain great,” Freeman wrote in the letter.
A Republican Congress can also be a challenge the gaming industry, but Freeman put the best spin possible on it.
“Tuesday’s results ushered in a new era in Washington, D.C..” he said. “The gaming industry is well positioned to thrive in this new environment because of the important steps we have taken over the last several years to unify around issues of common cause, work collaboratively with government officials and highlight our enormous local economic and social contributions to develop Congressional champions.
“AGA is eager to work with the Trump Administration and new Congress and we are optimistic that the coming years will include important victories for the gaming industry.”
Trump’s views toward the online gaming industry were also a concern. While he indicated a favorable view toward iGaming five years ago in Atlantic City, his alliance with virulent anti-iGamer Sheldon Adelson, chairman and CEO of Las Vegas Sands and owner of the Las Vegas Review-Journal, the state’s largest daily newspaper, was troublesome for iGaming advocates. However, Adelson only contributed $5 million to the Trump campaign, far less than he gave to Mitt Romney four years earlier, so it’s unclear whether he will have a substantial influence on Trump.
Nonetheless, some sources tell GGB that in exchange for the endorsement of the Review Journal, Trump promised not to oppose the Restoration of America’s Wire Act, Adelson’s pet bill that would ban iGaming in the U.S.
It would not take a Congressional bill to reverse iGaming in the U.S., however. The basis for legal iGaming in the three states where it occurs—New Jersey, Nevada and Delaware—is a December 2011 Department of Justice memo saying iGaming did not apply to the Wire Act. Another memo reversing that stand is not inconceivable, if Trump was so inclined.
For Indian Country, Trump’s election could be a disaster. Following on the heels of a president that some feel has been the best ever for tribes, Trump’s often stated antipathy for Indian gaming isn’t a good omen. The laid-back and cooperative approach taken by Obama’s Interior Department and National Indian Gaming Commission could disappear under a President Trump. Tribal leaders will be watching closely the appointments made by Trump in this area.
One tribe that may have been impacted immediately is the Mashpee Wampanoag tribe. Already tied up in court by opponents of the project who question the land-into-trust decision made by Interior, a judge ruled that the DOI’s process was flawed. A Trump appointee in DOI might decide not to pursue an appeal, upon which the Mashpees are pinning their hopes.
Meanwhile, the Trump victory overshadowed some important decisions made by voters covering gaming.
New Jersey
New Jersey voters rejected expanding casino gambling beyond Atlantic City by a large margin.
The referendum would have approved a change to the state constitution that would have allowed two casinos to be built in northern New Jersey. But the question struggled from the start and was criticized for its lack of detail. The referendum did not name the sites for the new casinos, the tax rate they would pay or which companies would build them.
Though the question was heavily supported by backers of proposals to build casinos in The Meadowlands and Jersey City, no sites or plans have been approved.
That open-ended authority to allow Trenton to decide where the casinos would be built was soundly defeated by voters. Out of about 1.5 million voters casting ballots, 78 percent voted against the plan.
Opponents of the plan felt new casino construction in the state would hurt Atlantic City’s already struggling economy and cause more casinos to close in the resort—which has already seen five casinos close since 2014.
“We are grateful to the voters of New Jersey, who by soundly defeating this constitutional amendment, spoke loudly and clearly that gaming belongs in Atlantic City, period,” said Debra DiLorenzo, chairwoman of the No North Jersey Casinos Coalition, which included casino and southern New Jersey business interests. “The coalition will remain active over the next election cycle to continue the dialogue on why the expansion of gaming to North Jersey is a bad idea for our state.”
Proponents of the plan, however, have said that they expect to go back before voters with a much more specific and approved plan. However, a referendum on the subject can’t be placed on the ballot for at least two years.
The two leading plans in the state are for casinos to be built at The Meadowlands Racetrack and a proposal by businessman Paul Fireman to build a billion-dollar project in Jersey City.
Jeff Gural, who operates the Meadowlands Track, has partnered with Hard Rock International for a casino there.
“I’m disappointed but not surprised,” Gural told the Associated Press. “The opposition very cleverly tied this issue to the state government in Trenton when everyone is expressing disgust with politics. That made it virtually impossible for us to win.”
Gural and Fireman also issued a joint press statement.
“We are disappointed, but not surprised, by tonight’s result,” the statement said. “We have seen for some time now that the people of New Jersey were unhappy with the lack of details on this issue. We do not view the failure to pass Question 1 as a rejection of gaming expansion, but as a rejection of our state’s current political climate and a failure to have all the facts presented to them.”
Gural said he is prepared to wait up to six years for a new referendum with a more feasible plan that would authorize a single new casino at the Meadowlands and say upfront what tax rate it would pay and where the money would go.
“If I can get that on the ballot it would win easily,” Gural told the AP.
Opponents, including the Malaysian owners of Resorts World casino in New York City, spent $14.8 million on ads tying the referendum to the unpopular state government in Trenton. Proponents spent $8.5 million touting the expansion, according to the Associated Press.
In a related development, Gural and the NJ Horseman’s Association announced a deal where if the Meadowlands obtains a casino license under the measure, the Meadowlands would provide $30 million in purses for thoroughbred and standardbred racing each year and contribute $5 million a year to pay operating expenses at Monmouth Park. In addition, the Meadowlands would use $2 million a year to pay for both dirt and turf racing at the Meadowlands beginning in 2019.
The deal was announced one day before Election Day and clearly had little impact on the vote.
Massachusetts
Massachusetts voters rejected a second slots parlor for the Bay State—a casino that would have been located next to Suffolk Downs racetrack.
The vote was 39 percent yes, 61 percent no. The developer behind the initiative had proposed to build 1,250 slots in Revere.
Existing law allows three casino resorts and one slots parlor. Plainridge Park Casino, in Plainville, is the only one of the four that is in operation. MGM Entertainment is building the MGM Springfield, which will open in two years. Wynn Resorts has just begun work on the Wynn Boston Harbor in Everett, overlooking the Mystic River.
Massachusetts also legalized recreational marijuana, a measure opposed by Adelson to the tune of more than $1 million. Also opposed were Governor Charlie Baker, Boston Mayor Martin J. Walsh, and Cardinal Sean P. O’Malley.
Rhode Island
Question 1 narrowly passed both statewide in Rhode Island and in Tiverton; which means that the Newport Grand will be picking up, changing its name and moving to this rural community near the state line with Massachusetts.
The amendment to the state constitution was approved by 55.3 percent of state voters, with 44.7 percent voting no. In Tiverton itself the vote was 3912 Approve (52.3 percent) with 3561 Reject (47.7 percent).
Currently the city of Newport is paid $500,000 annually by the casino. Tiverton, by contrast, would be paid $3 million.
The new $75 million casino will employ some 300 in construction jobs, and up to 600 in permanent jobs. Many of the permanent positions will be filled from current Newport Grand workers, according to Twin River Management.
The casino will be built on a 45-acre site where 23 acres is developable. There will be 1,000 slots and 32 gaming tables. It will include dining and an 84-room hotel.
Currently only one casino is functioning in Rhode Island, the Twin River in Lincoln, a slots parlor that also has poker, blackjack and roulette.
To persuade the voters, executives of Twin River Management, such as John Taylor, president, spent a lot of time talking to local residents of Tiverton, a town of 15,000. He first broached the idea two years ago after residents of Newport rejected his company’s request to add table games to the Newport Grand casino.
Taylor told Rhode Island Public Radio, “I spent all of last summer and all of last fall, literally in people’s living rooms, at their kitchen tables talking about this,” adding, “We didn’t go into town and say, ‘here’s this great casino, you’re going to love it. What we said was, we have a license and a piece of land that we control. Let’s have a conversation about what works, what your concerns are and we’ll take all that into account before we present a proposal to the town council.”
According to Taylor, “So the vast majority of our players have to go through 21 red lights to get to Newport Grand, this will put them much closer to where they live and be much more convenient for them to get to.”
Question 1 was endorsed by the governor, Gina Marie Raimondo, most elected officials from Northern Rhode Island, and the state’s Chamber of Commerce. Twin River spent $5 million funding the yes campaign: Citizens to Create Jobs and Protect Revenue.
That wasn’t a huge surprise given that the state’s third largest source of revenue is gaming. That revenue is threatened by the casinos that Massachusetts is building, which accounts for the choice of Tiverton—it’s a border town 400 feet away from the state line. One of those casinos opened more than a year in Plainville, less than half an hour away.
Tiverton town administrator Matthew Wojcik told the Boston Globe: “We all understand this is a chess board and the players try to arrange the pieces to the best of their advantage.”
Taylor’s company paid for a study that concluded that the Tiverton casino could generate $50 million annually for the state, about double what it collects from the Newport Grand.
“We’re positioning that casino to be closer to the markets that we serve,” Taylor told the Boston Globe. “Being in Tiverton is much more proximate to where those customers are coming from.”
Opponents didn’t buy those figures and also didn’t believe that the city cut a good enough deal with Twin River.
The four groups opposed to the casino, including No Tiverton Casino, Interfaith Clergy of Tiverton and Little Compton, No Casino RI, and Stop Predatory Gambling did not raise any money to fight the measure.
Johne E. Higginbotham, rector of Holy Trinity Episcopal Church in Tiverton argued that the region had become saturated with gaming, that gambling is a regressive tax that affects the poor, and that another casino would cause gambling addiction to spread.
Supporters saw the casino as a way to get some infrastructure built into a rural part of the town. One resident in his 20’s told Public Radio, “Like my whole life I’ve always heard we’re going to get a mall, we’re going to do this, and it never seems to come. It never happens. It is out of the way, like that’s better than having it right there.”
The surprisingly close election was finally decided by the delivery of 800 absentee ballots.
Twin River plans to open the Tiverton casino in 2018 and close the Newport Grand during that same period.
So far the Twin River casino in Lincoln has done well competing against Plainridge casino in Plainville. Twin River’s slots revenue declined about 6 percent, half of what it had been projected to lose. Management attributes this to the fact that Twin River has table games.
The Newport Grand doesn’t, which is why Twin River, when it purchased the casino, almost immediately began moving towards relocating. It acquired Twin River in 2015, the year after the voters of Newport rejected an initiative that would have allowed table games.
Florida
On November 8, voters in Duval and St. Lucie counties in Florida approved referendums allowing parimutuels to offer slot machines.
In Duval County, the referendum received 54.1 percent approval. Bestbet spent more than $2 million on the issue, which would allow 2,000 slots at its poker room in Arlington, a Jacksonville suburb.
In St. Lucie County, voters approved, by a wide margin, a referendum allowing slots at jai alai frontons and pari-mutuels in the county. Last May, owners of the Fort Pierce Jai-Alai & Poker asked the county commissioners to place the referendum on the ballot to gauge interest in the issue. The fronton already has a poker room but owners said they’re losing business since locals travel to South Florida to play slots at tribal casinos and those in Broward and Miami-Dade counties.
The next move is up to the Florida Supreme Court, which recently heard arguments in the case of Gretna Racing LLC v. Florida Department of Business and Professional Regulation. The horse racetrack owner sued the state after it was denied a slots permit, claiming changes to state law in 2010 allow county voters to authorize slot machines as long as there is an existing eligible facility in place.
The state has argued that slot machines only can be authorized by the legislature or a constitutional amendment through a statewide referendum.
County voters previously approved slots in Gadsden, Lee, Hamilton, Washington, Brevard and Palm Beach counties. Slots have not been installed in any facilities in those counties. However, a ruling in favor of Gretna Racing could immediately bring slots to those counties and have other far-reaching impacts.
The court has yet to make a ruling.
In addition, medical marijuana was approved in Florida by a large margin, again opposed by the deep pockets of Adelson. The only state where a marijuana initiative failed was in Arizona. Recreational use of marijuana also passed in California.
Nebraska
Even though it was not on the ballot, gaming in Nebraska was in the news. Last August, a proposal that would have allowed Nebraska voters to approve a constitutional amendment to legalize casinos failed to make it onto the November ballot. Organizers collected nearly 120,000 in a statewide petition drive, but more than 41,000 of those signatures were rejected.
At the time, anti-gambling proponent Nate Grasz, Nebraska Family Alliance policy analyst, said, “Nebraska consistently ranks as one of the best places to live, work and raise a family, and we’ve achieved that status without casinos in our backyard. Proponents of casinos cannot point to a single place in the United States where casinos have revitalized a community.”
Two other initiatives to expand gambling options at Nebraska racetracks and establish a tax on gross gambling revenue also went nowhere.
Today Nebraskans can gamble at the state’s four Native American casinos and its four racetracks—and across the Missouri River at casinos in Council Bluffs, Iowa. However, prior to 1934, all forms of gambling were illegal. In that year, the state constitution “was amended to permit parimutuel horse racing when conducted on licensed race track enclosures,” according to the legislative counsel website.
However, even before Las Vegas was established, Omaha was a hotbed of gambling, rife with mob influence. Supposedly more illicit gambling per capita was happening in Omaha than anywhere else in the U.S.
Nevada
Even though there were no gaming issues on the ballot in Nevada, some questions may impact the industry.
Nevadans voted to legalize recreational marijuana use and tighten background checks for gun buyers.
The marijuana initiative overcame opposition from Republican U.S. Senator Dean Heller and billionaire casino mogul Adelson.
It will allow possession and use by adults of up to an ounce of pot and imposes a 15 percent tax on sales. Proponents say it could generate $20 million a year to help the state’s schools.
The gun control measure, which sparked heated debate, passed by only around 10,000 votes out of 1.1 million cast with some ballots still uncounted last week, according to an Associated Press report.
Supporters say the initiative will close a legal loophole in existing law that allows state residents to skip background checks when buying guns from another person or online.
It was financed in part by a national group called Everytown for Gun Safety Action Fund, an organization supported by former New York City Mayor Michael Bloomberg. Proponents included Clark County District Attorney Steve Wolfson along with former sheriffs in Las Vegas and Reno, the Las Vegas Fraternal Order of Police, the Nevada Chapter of the National Latino Peace Officers Association, teachers and union groups and several casino executives.
Opponents, including the National Rifle Association, Gov. Brian Sandoval, state Attorney General Adam Laxalt and 16 of the state’s 17 elected county sheriffs, say the measure will cost law-abiding gun owners time and money without making anyone safer.
Voters also approved amending the state Constitution to facilitate the break-up of NV Energy’s statewide power-producing monopoly and to reduce the cost of medical devices like oxygen tanks, feeding pumps and hospital beds by exempting them from taxation.
The energy amendment, titled the “Energy Choice Initiative,” had financial support from Las Vegas Sands and data center company Switch, among others. Large companies, including Sands and other major gaming operators that have sought to leave NV Energy and find their own electricity providers have faced high exit fees imposed by regulators to soften the effect of their departure on remaining customers.
The medical device initiative is similar to a proposal that failed in the state Legislature last year. Analysts say it would have cost the state $25 million in lost revenue over 10 years.
Like the energy measure it needs approval again in two years to become part of the Constitution.
Betting the Election
Trump was a heavy underdog in European bookmakers that made action on the U.S. election. Odds against a Trump victory reached 10-1 in some countries, but a Clinton win was never doubted.
Irish bookmaker Paddy Power took a big hit on the U.S. presidential election, paying out $1 million early to bettors who wagered on a Hillary Clinton victory and another $4.5 million to those who wagered on the winner, Donald J. Trump.
Last month, Paddy Power put Clinton’s odds of victory at 86 percent. Bookmakers often draw publicity by paying out early on political wagers when results are considered a foregone conclusion.
“We’re in the business of making predictions and decided to put our neck on the line by paying out early on Hillary Clinton, but boy did we get it wrong,” said Paddy Power spokesman Feilim Mac An Iomaire, according to Bloomberg. “We’ve been well and truly thumped by Trump, with his victory leaving us with the biggest political payout in the company’s history and some very, very expensive egg on our faces.”
The U.S. election drew record wagering at bookmakers and betting exchange sites. U.K.-based internet betting exchange Betfair reported its “Next President” market was set to become the most traded it had ever seen and was expected to surpass even Brexit, the contentious U.K. referendum to leave the European Union.
By two days before the election, roughly $130 million had been traded on who will become the next U.S. president, compared with $159 million on the Brexit referendum, Betfair spokeswoman Naomi Totten told CNBC. By comparison, around $50 million was bet on the 2012 race.
