Customs policy enacted in the U.S. causes significant stock market fluctuations and negatively impacts the online gambling sector.
In the past few months, the global gambling industry has been facing a significant shake-up due to the new trade policies implemented by the US under President Donald Trump. According to analysts at Regulus Partners, this change is considered the "largest structural change in the world economy since 1990".
The new policies have caused a significant downturn in global stock markets, and the gambling industry is no exception. MGM Resorts' stock price has fallen by around 17% in the last month, dropping below its lowest point from June 2022. Similarly, Entain's stock price fell by around 23% in the last month, wiping out the profit of the last few months. The stock price of Evoke (formerly 888 Holdings) has more than halved in the last six months.
However, not all stocks in the industry have suffered equally. Despite most stocks suffering significant losses, Betsson, a Swedish company, has seen its stock price rise by 36% over the last 52 weeks, and only dropped by around 3.5% due to recent market uncertainties. This resilience may be attributed to the closure of Betsson's stationary casino business in Sweden, which could have acted as a positive counterbalance to its stock price performance.
The structural change due to US trade policy is interpreted by investors as a general disadvantage for the gambling industry. ZEAL, a German company that offers online lottery games, is down 5% on a monthly basis but had previously provided consistent gains to investors and was recently awarded the Trusted Partner Seal by Tipico.
One of the potential reasons for the industry-wide downturn could be the increase in taxes on gambling in countries affected by US trade policy. These taxes could be used to finance higher tariff revenues, reducing profit margins for gambling companies. However, there is no specific information available about current government positions of different countries on controlling taxes on gambling and betting related to the US trade policy regime.
The effects of US trade policy on the development of the gambling market are difficult to estimate. According to Regulus Partners, the potential relaxation of US trade policies could impact the evolution of the industry. The specialist magazine Racing Post also suggests that the gambling industry has been affected by the general downward trend.
Interestingly, private individuals may not have the money to spend on gambling if US tariffs increase the price level, potentially leading to a decline in gambling tourism in places like Las Vegas. This could have far-reaching implications for the industry, as a significant portion of its revenue comes from tourists.
In Austria, the gambling industry's stance on potential tax increases is currently a hot topic. Legal providers fear that their customers may turn to the black market if taxes are increased, further complicating the industry's response to the US trade policy changes.
Only a few stocks have managed to perform positively in recent weeks, making a future prognosis difficult. The stocks of many large corporations in the gambling industry were already very volatile before the recent developments in the US, adding another layer of uncertainty to the industry's outlook.
In conclusion, the US trade policy changes are causing a significant impact on the global gambling industry. While some companies are struggling, others are managing to weather the storm. The future of the industry remains uncertain, with many factors at play, including potential changes in US trade policies and the industry's response to increased taxes on gambling.
