US DOJ may be less aggressive towards online gambling under Biden's presidency

Rivers Chairman Neil Bluhm Was A Major Biden Campaign Donor. What Does That Mean For Online Gambling?

With Joe Biden, by most accounts, poised to move into the White House in less than two months, it’s reasonable to wonder: What will he do for online gambling?

True, Donald Trump continues to fight his election loss in the courts. Betting exchanges still give him about a 10% chance of holding on to power. Those odds get longer every day, however, and few with knowledge of the situation think it’s likely that his team will find a way to overturn the result.

Biden hasn’t said much publicly about online poker or casinos. He did, however, tell a Las Vegas audience during his campaign that he “doesn’t support adding unnecessary restrictions to the gaming industry as the Trump administration has.”

That said, politicians of all stripes beat around the bush a lot. Sometimes it’s easier to predict what they’ll do based on who they take money from rather than what they say.

Biden’s campaign disclosed a list of 817 “bundlers,” meaning high-profile figures who organize and collect donations on behalf of a candidate. Notable among Biden’s bundlers are Neil Bluhm and his daughter Meredith. Bluhm is the chairman of Rush Street Gaming, which operates land-based casinos in the US and is affiliated with Rush Street Interactive for online gambling via the BetRivers brand.

Gambling industry figures vary widely on online issues

On the surface, it seems like it should be a good thing if Bluhm has Biden’s ear. However, online gambling is as contentious within the casino industry as it is with politicians and the general public.

For instance, it was a widespread misconception in the online poker world back in 2016 that Trump, having dabbled in the casino industry himself, would be good for the progress of online gambling. Nothing could have been further from the truth.

In both 2016 and 2020, a major donor to the Trump campaign was Sheldon Adelson. Online gambling has perhaps no greater foes in the US than Adelson and his Coalition to Stop Internet Gambling (CSIG).

The thing about online gambling is that it’s disruptive to the casino industry. It doesn’t directly cannibalize retail gambling revenues, as some have claimed. However, it does change a lot of the business dynamics, such as customer acquisition strategies. It also allows new players into the game, like the daily fantasy sports (DFS) companies FanDuel and DraftKings.

Thus, while legalizing online channels makes the pie larger, it also brings more hungry mouths to the table and changes the rules for how that pie gets sliced up. Some casino giants, like MGM, Golden Nugget, and Caesars,have embraced the change. However, others, like Adelson’s Las Vegas Sands, don’t like the idea of taking a smaller slice of a larger pie.

Where’s Rush Street on online gambling?

Rush Street has fallen somewhere in between. Whereas Sands has opted out of the online space and may even leave the US entirely because of it, Rush Street has embraced online gambling in those states where it has become legal.

With its two brands, BetRivers and PlaySugarHouse, it is the number one online casino operator by revenue in Pennsylvania. It hasn’t jumped into the NJ online casino market but has an access deal in place for Michigan when that state eventually goes live.

On the other hand, it’s commonly suspected that Rivers and Rush Street had a hand in scuttling efforts to legalize online casinos in Illinois. The issue Rush Street has is specifically the disruption to the industry caused by newcomers like DraftKings. It’s the company’s position that DFS should have been illegal, so it sees the DFS companies as bad actors that should be excluded from legal markets.

Bluhm may or may not actually have much sway with Biden. Moreover, what’s going on in Illinois has little to do with the federal government. However, to the extent that Bluhm might be able to influence policy, it’s reasonable to guess that he’ll be generally in favor of legalization, but hawkish on gray market products and who gets a seat at the table.

When it comes to the federal government, less is more

As for Biden himself, perhaps the best indicator of what he’ll do as president is to look back at his years as vice president under Barack Obama.

Those years weren’t particularly good for online gambling, but they were by the book. Online poker’s Black Friday happened on Obama’s watch, but it was simply the enforcement of a law, the Unlawful Internet Gambling Enforcement Act, that dated back to the Bush years.

Likewise, federal efforts to expand the Wire Act to cover forms of gambling other than sports betting happened under Obama. However, those initial efforts went through proper legislative channels, and failed.

It was only after the Restoration of America’s Wire Act (RAWA) was dead that the Department of Justice attempted an end run around Congress. Its Office of Legal Council affirmed in 2011 that the Wire Act applied only to sports betting. And yet, it reversed course in 2019, under Trump. The DOJ issued a new opinion, stating it now believed the Act applied to all wagering.

This sparked a legal battle, initiated by the New Hampshire Lottery Commission. The case remains in appeals for now, but Biden has given signals that he’d like it put to rest. Bluhm’s influence may reinforce that and help ensure that there won’t be any further federal overreach under Biden when it comes to online gambling.

In other words, the best case and most likely outcome of a Biden presidency for online gambling is essentially nothing at all. We won’t see an effort to legalize online poker nationwide, as Biden’s rival in the primaries Andrew Yang proposed.

However, the federal government will probably stick to enforcing existing laws and otherwise leave matters up to the states. And that, at the end of the day, is a good thing.

- Alex is a journalist from Dartmouth, Nova Scotia, Canada. Now site runner for OnlinePokerReport, he has been writing about poker and the online gambling industry in various capacities since 2014.
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