With the U.S. casino industry making a hard push to pass federal online gambling legislation, it is no surprise that Donald Trump has plans to seize the Internet. “This has to happen because many other countries are doing it and like usual the U.S. is just missing out,” Trump told FORBES. “It seems inevitable, but with this country you never know if it’s inevitable.”
Trump’s comments come after Trump Entertainment Resorts disclosed in a securities filing it will form a joint venture for Internet gambling with Trump, together with his daughter Ivanka Trump, and Avenue Capital Group, the $12 billion hedge fund firm controlled by billionaire Marc Lasry. “We have been looking at this for a while,” Trump says. “We have the hottest brand in the world according to many and we think we will do extremely well because of the Trump brand.”
Trump and Lasry are in the final stages of selecting a management partner, negotiating with undisclosed third parties that have “experience in operating on-line gaming businesses in jurisdictions outside the United States where on-line gaming is currently allowed by law,” according to a Trump Entertainment Resorts Securities & Exchange Commission filing.
Trump is preparing both for the possibility of federal Internet gambling regulation becoming law or that New Jersey will do something on the state level. Senate Majority leader Harry Reid and the American Gaming Association are working to get online gambling legislation through a divided Congress. New Jersey Governor Chris Christie vetoed an online gaming bill earlier this year, but some New Jersey lawmakers are still working to get legislation passed. Trump and Lasry have no plans to move forward without a federal or state regulatory regime in place. The joint venture would be 10% owned by Trump Entertainment, which is controlled by Lasry’s Avenue Capital.
Billionaire casino moguls like Trump and Steve Wynn have not publicly shown any interest in online gambling until this year, leaving the U.S. online gambling market, the biggest in the world, for offshore companies that operated U.S. facing web sites despite the fact that the Justice Department said all forms of online gambling were illegal, which has been a hotly contested issue.
Trump says both federal and state governments would benefit from increased tax revenues if online gaming was properly regulated. “The U.S. is missing out and New Jersey is missing out and everyone else is getting it,” Trump says.
Donald Trump May Oppose Many Things, But Online Gambling Isn’t One
Describing Donald Trump as the most controversial presidential candidate is an understatement. His comments have struck nerves across the political spectrum.
Trump is a long shot in the presidential race. Offshore sportsbooks post 25/1 odds against Trump winning the White House race. There are three Republican candidates with better odds, as well as two Democrats.
On the other hand, Barack Obama was trailing Hillary Clinton by a 2-1 margin in the polls at this point in 2007. Obama’s lead in the race did not take shape until February 2008. Trump is already leading the GOP race in most polls.
Support for and involvement in regulated online gambling
The online gaming industry may not want to immediately dismiss Trump’s candidacy.
Trump is a strong proponent of legalized online gaming. “It has to happen because many other countries are doing it and like usual the U.S. is just missing out,” Trump told Forbes in 2011.
At the time, Donald Trump and Trump Entertainment were in the planning stages of a joint online gaming venture. New York hedge-fund manager Marc Lasry was also named as a partner.
The company formed through this partnership appears to be Poker Ventures LLC. This company incorporated in Nevada and Delaware in 2012. It was incorporated in New Jersey in July 2013 between the time online gaming was legalized in New Jersey and when it went live.
Poker Ventures received a vendor license to operate in the New Jersey interactive gaming industry.
The company uses the same address as The Trump Corporation on its New Jersey vendor license and corporate filings disclose Donald Trump as the director. While Donald Trump and Poker Ventures never officially moved into the New Jersey online gaming market, his position on the issue is clear.
Trump Entertainment took another path, partnering with Ultimate Gaming and Betfair under two separate Atlantic City resorts.
You won’t see the Trump online casino anytime soon, however
Trump’s name could not be licensed for gaming over the Internet. It is only licensed for use at Atlantic City casinos.
Insiders at Ultimate Gaming cited this as one of the reasons for its failure to capture any significant market share. Competitors at most New Jersey poker and casino sites used the brand name of the Atlantic City casino associated with its license in some capacity. Ultimate Gaming was unable to do so.
Betfair was under the same restriction before it moved to Golden Nugget’s license.
Trump could play the iGaming card in his favor
Trump is leading the Republican presidential primary polls. This guarantees him inclusion in debates for as long as he shows in polls.
Online gaming is not a hot button topic, but it is not out of the question that Trump could use it to show hypocrisy among some of his opponents that favor a states’ rights position, while at the same time supporting a federal government ban of online gaming.
Getting the topic out in the open in a presidential debate would only be a positive for the online gaming industry, even if you don’t like the messenger.
Donald Trump’s Online Gambling History
Donald Trump’s maverick bid for the presidency is getting a lot of attention, and that includes from advocates of legalized online gambling.
Several poker information websites have been pointing out that Trump—whose name is still on an Atlantic City casino—has supported online gambling in the past.
“It has to happen because many other countries are doing it and like usual the U.S. is just missing out,” Trump told Forbes in 2011.
At the time, Trump and Trump Entertainment were in the planning stages of a joint online gaming venture with New York hedge-fund manager Marc Lasry.
The company formed as Poker Ventures LLC and incorporated in Nevada and Delaware in 2012. It was incorporated in New Jersey in July 2013. Those three states have legal online gambling.
Poker Ventures received a vendor license to operate in the New Jersey online market, but has not gone live with a product. The company uses the same address as the Trump Corporation on its New Jersey vendor license and corporate filings disclose Donald Trump as the director.
So basically, Trump is a leading presidential candidate that owns an online gambling company. That, as we said, is garnering a lot of hope among online gaming advocates.
Early on, Ultimate Gaming operated under the license held by Trump Taj Mahal. Donald Trump refused to let ultimate use his name, and soon Ultimate withdrew from the market (for more reasons than simply not being able to use the Trump name). For Donald Trump to open Poker Ventures in New Jersey as an online gambling entity, he would have to get the approval of the group that now owns Trump Taj Mahal (soon to include Carl Icahn). Trump himself only owned 5 percent of the group that owned Trump Taj Mahal prior to Icahn’s entry.