How Trump’s Tax Reforms Boosted Casino Stocks and Corporate Profits
Feb. 18 2025, Published 2:00 a.m. ET
As the casino market in the US grows, more investors have been reviewing the opportunities and challenges in this industry, hoping to get a high return on their income should they choose to be players. A key opportunity has been the increased legalization of online casinos at the state level, as this has opened up the US to the rest of the gambling world. Now, players can rely on sites such as those listed on https://www.bestcasino.ltd/ to enjoy games without leaving their homes. But it’s not just state legislations that are paving the way for investors. President Donald Trump’s tax reforms have also been making waves. We look at what they are and how they could impact this key industry.
The Spillover Effect of Trump’s Tax Reforms
President Donald Trump has been quick to state that he will be making more changes to the Tax Cuts and Jobs Act (TCJA) of 2017, which has fostered more investments in the casino industry. After all, this Act had the following effects:
Lower Taxes
It’s not a secret that businesses work hard to avoid higher expenses, be they leases or taxes. Thanks to the TCJA, corporate tax went down to 21% from 35%, which was a significant drop that allowed businesses to report higher earnings. Since taking office again, the president has stated that he plans to extend these provisions, thus making the casino sector even more attractive.
Higher Cashflows and Earnings
What’s the one thing that businesses can enjoy by cutting their expenses? Immediately after the Act came into effect, casinos were able to save a whopping 14% of their net revenue. Some used this money to bolster their market positions through more investments; others paid out higher earnings, while others expanded their market reach. With the provisions still in play, casinos will be able to keep enjoying these benefits, which will help them remain competitive while providing more jobs and opportunities to US citizens.
Increased Economic Growth
Casinos do not operate in a vacuum and instead continuously interact with other entities. As such, their successes and failures have a direct impact on the economy. The higher earnings enabled casinos to not only retain their employees but also provide more employment opportunities and invest more in supporting businesses. As a result, the economic effects spilled over to the rest of the economy, sparking local growth in various sectors.
Higher Stock Prices
Many casinos rely on external funding, which they source this capital from the stock market. On the upside, this gives them access to a wide pool of potential investors who can buy their stocks to help them meet their operational costs and implement their plans. On the downside, however, any changes in the business environment affect investor confidence, which can result in a drop in stock prices. Luckily for casinos, the lower taxes coupled with the higher profits resulted in higher investor confidence, which also raised the prices of stocks, thus making their businesses more profitable.
Improved Competitive Advantage
All businesses that want to thrive must differentiate themselves from others, be it in terms of their pricing or services. The low tax rates enabled casinos to use these strategies to stand out from their international competitors. Some chose to use the higher earnings to lower their buy-ins, which allowed them to attract more customers; others decided to refine their services to attract select clientele willing to pay for top-notch services, while others chose to use a mix of the two. Thanks to these approaches, US casinos remained attractive to investors as well as players, which has enabled them to continue being key players in this global industry.
What Does the Future Hold?
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During President Trump’s 2024 campaign, he held that he planned to extend the TCJA provisions beyond 2025, thus enabling casinos to continue enjoying these benefits. What’s more, he plans to eliminate some taxes, such as those charged on earned tips or overtime wages, thus enabling more people to have more disposable income. Should these changes come into effect, projections show that the US could enjoy a boost in its economic growth that will benefit everyone.
