【Willbet | Crypto Casino Games】Analysts predict gambling resilience amid Trump tariffs turbulence

US President Donald Trump’s 2 April “Liberation Day” announcement sent markets into a tailspin amid the introduction of a sweeping new global tariff system based on controversial economic calculations.

Gambling stocks, like the broader market, were caught in the resulting downdraft, with many shedding double-digit percentages from their share prices over the past week.

However, following intense pressure from business leaders and ominous movements in the bond market, most of these tariffs have now been paused for 90 days. What remains is a universal 10% levy, the previous 25% rate for Canada and Mexico, and a significantly higher 125% tariff specifically targeting Chinese imports.

Tariffs’ direct impact expected to be limited

Jordan Bender, analyst at Citizens Capital Markets and Advisory, believes the pause does not fundamentally change the situation for the gambling industry.

“The pause just pushes us back to several weeks ago to the initial implementation of the original tariffs on Canada and Mexico, and now China,” Bender said. “Broadly, prices increasing and consumer uncertainty are still a negative backdrop for discretionary spending for the casino sector, whether it actually comes to fruition or not.”

Bender noted several specific concerns: “Inbound travel from these countries has the potential to hurt MGM and Caesars in Las Vegas, as well as consumer spending in Macau (MGM-related). Outside consumer demand, the cost of materials (food, beverages, etc.), and project spending for new or upgraded properties could be impacted.”

Elsewhere Paul Leyland, partner at gaming analyst firm Regulus Partners, highlighted that the general nature of the economic disruption was likely a silver lining for the industry.

“The good thing about macroeconomic risk to gambling is that it really matters to everybody,” he said.

“When the US bond market started to move against US policy, it was basically a signal the US government was going to struggle to refinance its long-term debt, which is the opposite of what Trump wants. And so, lo and behold, he’s changing policy.”

“Now, unless you’re China, there’s much less pressure. There’s still quite a lot of pressure. I think if we thought that 10% tariffs were coming in across the board, we’d still think that was very punchy, but not as punchy as what had been suggested. So, it’s obviously a positive, and the sector’s exposure to China is very, very narrow indeed.”

Gambling’s recession resistance

Analysts broadly agree that gambling remains relatively recession-proof compared to other sectors.

Leyland explained that gambling companies are usually undermined by gambling-specific policy, which only matters to a very narrow range of people. The benefit of being caught up in a macro storm, he argued, is that the entire market, as well as political, business and government infrastructure kicks in to protect itself.

Chad Beynon, analyst at Macquarie Group, identified three main impacts of the tariff policy: The effects of a possible recession, direct tariff impacts, and the overall upshot on stock valuations.

He highlighted that UK digital gambling, then in a growth phase and long before the recent wave of responsible gambling reforms, only fell 1-2% during the last financial crisis, while US land-based gaming faced an approximately 8% hit.

“Bottom line, we still think this is an industry that will be recession-resistant, given the dynamics of who the customer is, their income, and our belief that they have created a lot of wealth during the past five years,” Beynon said.

“Obviously it is discretionary. Generally, gaming spend adds up to 75 basis points to 1% of individuals’ household income, so depending on what happens there, that could change. But what we have seen during recessions is that gaming tends to hold up well.”

Bender from Citizens offered similar sentiments: “We believe cheap forms of content-driven entertainment, close to home, have demonstrated the ability to take wallet share during a recession. Casinos, in particular, have shown resiliency to swings in the economy; land-based regional revenue was -4% peak-to-trough during the Global Financial Crisis.”

He drew parallels to other entertainment sectors: “Movie theatres offer another example of a content-driven industry, often close to home, providing a cheap form of entertainment, thus outperforming in downturns. Theatre revenue was +10%, +8%, and +6% in the last three recessions, versus its long-term CAGR of +4%.”

Sports betting’s strong position

Bender is particularly bullish on sports betting during economic downturns. “Sports betting has similar characteristics: a low-spend form of entertainment, close to home (or in-home), supported by year-round content, leading us to believe sports betting will see little impact in a recession.”

He backed this with historical data: “Nevada (a mature market) sports betting handle, excluding the Strip, declined 2% from peak to trough during the GFC, while handle per adult declined 4% peak to trough. Additionally, sports betting took wallet share in NV during the GFC, with adults spending 1.7% of their income on sports betting, up from 1.5% in the two years leading up to the recession.”

Beynon of Macquarie also suggested that consumers may reduce spending on higher-ticket items like concerts and sporting events because of the price, but because of the ease of use and lower-ticket item nature, gaming will likely hold up during a recession.

In terms of direct tariff impacts, Beynon said his firm didn’t really expect much impact in the gaming space, especially compared to other areas of consumer discretionary spending such as retail. This would likely be limited to some products in land-based casinos, as well as minor effects on digital slots, depending on where they are made and the location of R&D facilities.

Long-term market impacts

Beynon highlighted the current tariff policy could ultimately have a major impact on company valuations: “Generally, these stocks trade off free cash flow yields and price-to-earnings multiples. China has been trading at 11 times earnings for some time. The US is trading at 20 times earnings. So, until yesterday, it appeared that there would be some tightening between those two markets.”

Leyland noted that the long-term impacts of the policy shifts will depend largely on whether Trump can rebuild his credibility with markets.

“It depends on whether Trump is the boy who cried wolf. I think the next thing he announces that has potential shock-and-awe negative impact, a lot of people will be thinking, ‘Will he follow through?’ And if he does, people will wonder, ‘Will he reverse it though?’ like DraftKings and its customer surcharge.”

“Bluntly, Trump’s got to rebuild his credibility with the markets now. He’s able to do that by not doing anything radical, which solves the problem. But I think the next radical thing he does is probably discounted unless he carries it out. So people might be a little bit behind the curve now, or there is no more curve — one or the other.”

Silver lining: state legalisation efforts

A potential positive outcome of economic uncertainty could be accelerated gambling legalisation efforts at the state level. Both Beynon and Bender highlighted this possibility.

“If states need revenues, particularly here in the United States, if they start to have bigger state deficits, then they could lean more towards gaming legalisation. So, there could be a silver lining,” Beynon said.

“That’s what we’ve seen in the past. The biggest times when states have legalised or permitted gaming are around recessionary or deficit periods. So that could be one positive outcome.”

Bender concurred: “Historically, downturns have brought the legalisation of brick-and-mortar casinos for states in the US with a need to fill state budgets. A recession, if we actually enter one, could increase the chances of casino legalisation or online gaming in new states, given that line of thinking.”

In the more immediate future, Beynon said Macquarie expects companies in the upcoming earnings season to be slightly more hesitant around giving guidance, which could result in some market volatility.

Limited impact on listing dynamics

On the question of whether ongoing economic uncertainty will affect current listing dynamics, Leyland said he didn’t expect a great deal of change from the status quo.

“Where companies are listed is determined by a few parameters, like where you have a big chunk of your business and hoped valuation. If a company doesn’t have significant exposure to the US market, it’s less likely to be US-listed,” he explained.

“That was the historical role of the FTSE 100 — it’s like the rest of the world market. The FTSE 100 exposure to the British economy, off the top of my head, is less than 20%. That’s bound to be the case because they’re global companies, and Britain’s a relatively small economy compared to America.”

He concluded: “So, I think the answer is no, but that’s one of the reasons why Trump has reversed his policy—because the American way is ‘America’s business is business.’ The markets are the god of America, and so the markets will be preserved at the expense of everything else.”