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Trump is going to be the next POTUS—what that means for the esports economy

Esports is by and large a fairly progressive community, partly due to the global reach and relative youth of competitive gaming. There are, of course, conservative esports professionals and fans, and it’s now their political party’s time in the spotlight. Regardless, all of us need to be aware of the impact of choosing Donald Trump as the next President of the United States.

Note here: I’m very much a progressive person and will openly admit to advocating against Donald Trump over the election season. I did my best here to look at the policies of his campaign. There are, of course, going to be cultural ramifications to electing Trump, which will definitely spill into esports and beyond, but this article is not about that. I remain optimistic that we are better than a lot of the negative things that we’ve seen come out of both sides of the 2016 election season.

Why is the US presidency so important to a global esports economy? Answer: because almost every major game development company is based in the States—Activision Blizzard, Riot Games, and Electronic Arts, just to name a few. And increasingly, live competitions are taking place in the States, including IEM, DreamHack, and the newly-minted Overwatch League. These companies and events will all be subject to new laws and policies created by the coalition of the Republican-held executive, legislative, and (likely soon to be Republican-held) judicial branches.

Overview

Despite being a candidate running largely on governmental disruption, Trump stands for several traditional conservative economic policies—big tax cuts being the primary shared idea. However, he’s also well-off the beaten track on other issues, particularly when it comes to free trade and immigration. How most of this will affect the esports economy is unclear, but there are a few elements that will affect everyone a little bit, and a few elements that could affect esports substantially and directly.

Tax Plan

Trump’s tax plan would cut taxes significantly and, based on who you listen to, would reduce government revenues from anywhere between $2.9 trillion to as high as $7.2 trillion. In return, individual income for everybody will rise—but by how much is unclear. The right-leaning Tax Foundation, however, states that in general, after-tax income would rise by 0.8 percent. As a counterpoint, the top 1 percent of earner would take home at least 10.2 percent higher incomes, “or as much as 16.0 percent higher, depending on the nature of a key business policy provision.” As a final note, Trump hasn’t detailed any concrete spending cuts, meaning an increase in federal debt, possibly well into the trillions of dollars.

“The top 1 percent of earner would take home at least 10.2 percent higher incomes, or as much as 16.0 percent higher.”

What that means is that take-home incomes will probably rise, but not by that much, unless you already make a lot of money. High income earners (like some team owners) will have more money on hand to do things—and tax cut supporters say that this will “trickle down” to lower earners (like players and support roles). This idea is definitely now going to be put to the test. With lots of money in esports still very much reliant on investment, however, it’s likely that things will simply remain stable for the industry, at least for now.

However, there is some hope that with less taxes and higher incomes, investors will be looking for places to put that money, and esports is one of the top rising markets to target. It’s unclear, however, how much of a division there is between investing in gaming (and esports as a marketing tool for gaming) versus investing in esports as an entity by itself. A lot of that will likely be determined by how current ventures fare for those investing in esports-specific products, such as the recently-launched Shadow.gg tool or multi-media companies like GAMURS.

Trade Policy and Jobs

Donald Trump has been highly critical of basically everything about trade in the US for the last several decades—including major trade deals like NAFTA and the pending TPP. Additionally, he has floated ideas of placing large tariffs on countries like China and Mexico as a means of increasing national spending and driving factory jobs back into the country, which could trigger trade wars and potentially slow the economy down significantly.

More manufacturing jobs means less college for young people means less free time to invest in watching and participating in esports means less esports.

What this means is unclear at this point, because nobody is sure exactly how much of Trump’s proposal was to attract votes or was because he actually wants to do them. Many large companies rely on free trade and will likely rally against any tariff or similar restrictions. In addition, despite claims from both parties that America needs more manufacturing jobs, the US economy is increasingly leaning on service jobs—and that includes esports.

Esports is an entertainment field and stands to win big as the service industry grows. Any change to this direction would just mean reversing momentum in esports interest, for a variety of reasons. Here’s a very dumbed-down explanation: More manufacturing jobs means less college for young people means less free time to invest in watching and participating in esports means less esports.

Still, a lot of this is very wide-frame and exact execution could vary wildly. Of course, I’m sure many young Trump voters, if faced with a decision between a life making car doors and playing video games, would pick the latter. Those scales have, for now, tipped ever-so-slightly back towards the car doors.

Immigration

Brace yourself, because this could be very bad (depending on what you want esports to be). Immigration is one area that a Trump presidency could impact esports greatly. Simply put, he intends to dramatically step up deportation methods for illegal immigrants, along with applying stricter immigration and visa granting policies, including an undefined screening process. He has floated ideas like mandating companies hire US workers “first” or above a certain percentage of their workforce.

This could definitely impact events being held in the US.

What this means is increased difficulty for esports pros from other countries to get a US visa. Just how hard will depend on a number of factors that nobody has any idea about yet. This could definitely impact events being held in the US—though it might have the side effect of further enforcing many “region locking” efforts that already exist. It could possibly affect other roles within esports companies as well, whether those roles are coaches and analysts, or just qualified people that happen to be from another country.

One largely unexplored element of this kind of policy, though, is that many illegal immigrants got here legally and just overstayed their visas. Many of those people are young and in college, and overlap with esports demographics heavily. We’re just going to have to wait and see how the Trump administration plans on handling this kind of situation.

Obamacare

Obamacare is very likely to get at least partially repealed. There are several parts of the ACA that both sides of the party are benefitting from, like the Medicaid expansion. I definitely think the marketplaces are going to be shut down, especially with premiums on the rise. Democrats will have very little political capital for the next two years (at least) and they won’t want to spend it on Obamacare.

What this means is that people using Obamacare to provide them with health insurance will lose it and will likely have to buy more expensive individual options (like COBRA) if they still want health care. Many that work in esports are freelance and don’t have the option of employer-subsidized health insurance, so they will likely just not opt to have health insurance. Recent pushes by Blizzard and Riot have given esports teams reasons to fully employ players, which includes providing for health insurance, but that doesn’t extend to a number of other positions within esports teams or other esports organizations.

Glass-Steagall and Dodd-Frank

Trump wants to reinstate Glass-Steagall and repeal Dodd-Frank, which are both financial regulations. Glass-Steagall separated out commercial banks (like ones that have savings and checking accounts) and investment banks (that make investments), and was repealed by Bill Clinton in 1999. Dodd-Frank was put into place by Barack Obama in 2010 and was meant to regulate banks so as to prevent another Great Recession.

Any kind of recession could put a serious damper on the growth of esports.

What this means is really unclear, but could have tremendous impact on the global financial market. Glass-Steagall’s repeal has been named as a cause for the Great Recession, so many view this as simply replacing new regulation with old, but the effectiveness of both (and necessity of both) is questionable at best so take that as you can. Any kind of recession could put a serious damper on the growth of esports. Nobody wants another Great Recession, and the economy in general is doing okay right now, so let’s just hope that continues and messing with regulations doesn’t screw that up.

Summary

Like any impending change of power, the Trump presidency has a lot of uncertainty behind it. Some things look like they will affect esports positively, other negatively. The exact implementation of a lot of his ideas will determine what side of the wall esports falls down on. If one thing is certain, however, it’s that change is coming. A Clinton presidency would undoubtedly have been handcuffed by an idealogically-opposed Congress, and Trump will not face such a challenge. For a candidate who ran on shaking things up, not shaking things up is a nonstarter.

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