Since 1 October, federal employees, agencies and services have been impacted by an ongoing US government shutdown. Lawmakers were unable to compromise on a bill to maintain government funding by that deadline and, 35 days later and counting, a resolution appears no closer.
The 2025 shutdown is the 15th by the US government since 1980. However, most of those lasted a week or less. On Tuesday, this edition became tied for the longest ever, which stretched from 22 December 2018 to 22 January 2019 during President Donald Trump’s first term. With the US Senate rejecting a stopgap funding bill for the 14th time, this shutdown will now officially become the longest.
For the gaming industry, a prolonged shutdown puts pressure on both retail and digital stakeholders. Fears related to sluggish tourism and air travel, especially for Las Vegas, will continue to mount, as will uncertainty regarding prediction markets and federal financial regulators.
The American Gaming Association, the industry’s lobbying arm, has not commented directly on the shutdown but referred iGB to a letter from the US Travel Association dated Monday, which the AGA co-signed. The letter was addressed to Senate and House leaders. Other gaming co-signers included Delaware North, Caesars Entertainment and MGM Resorts.
“As a broad coalition of organisations and companies representing every sector of the US travel industry, we urge Congress to immediately pass a clean continuing resolution to reopen the federal government,” the letter reads in part. “With Thanksgiving, the busiest travel period of the year, imminently approaching, the consequences of a continued shutdown will be immediate, deeply felt by millions of American travellers and economically devastating to communities in every state.”
Las Vegas most likely to feel air travel strain
For consumers and travellers, disruption to air travel is one of the most noticeable aspects of a shutdown. Air traffic controllers for the Federal Aviation Administration have missed one paycheck and are on track to miss another in the coming days. This strain has led to staffing shortages and subsequent traffic delays in airports around the country.
Transportation Secretary Sean Duffy said at a press conference on Tuesday that if the shutdown extends for another week, the nation “will see mass chaos”.
“You will see mass flight delays,” he warned, per Politico. “You will see mass cancellations. And you may see us close certain parts of the airspace because we just cannot manage it because we don’t have the air traffic controllers.”
That is a worrying development for Las Vegas, America’s premier gambling destination. Monthly visitation has not seen a meaningful year-over-year increase since September 2024, and Trump’s aggressive tariff and trade policies had already been impacting international traffic, especially from top feeder markets Canada and Mexico. International traffic to Harry Reid International Airport was down more than 13% YoY in September.
Despite these trends, gaming revenue had been increasing for three consecutive months, but that too slipped back in September. The stage is now set for a pressure-packed Q4, which features the annual Formula One Las Vegas Grand Prix in November as well as the Thanksgiving and Christmas holiday breaks.
It is hard to pinpoint the exact economic impact the government shutdown is having or will have on Las Vegas. But the US Travel Association in September estimated that the travel industry as a whole would lose $1 billion per week.
Prediction markets abound during government shutdown
Unfortunately for digital stakeholders, they too are seeing the effects of a strained federal workforce. The rise of prediction markets in late 2024 and early 2025 has captivated the gaming industry, and their rise has been attributed in part to federal law and regulations.
Prediction markets operate as financial exchanges through which users can place contracts on wide-ranging events that relate to economics, politics, pop culture and, most recently, sports. By venturing into sporting events, they are now direct competitors to state-licensed commercial bookmakers. They are regulated at the federal level by the Commodity Futures Trading Commission. As a result of the lapse in federal funding, the CFTC has curtailed operations.
The CFTC was already stretched incredibly thin before the shutdown. Acting Chairwoman Caroline Pham is currently serving as the sole commissioner amid several resignations. There are typically five commissioners at any given time, all of whom must be nominated by the president and confirmed by the Senate.
Pham has indicated she too will step down when a new chairperson is confirmed. Trump’s first nominee, Brian Quintenz, had his nomination pulled, and Securities and Exchange Commission crypto chief Michael Selig is the new nominee. Thus, Selig or whoever else is confirmed would still be the lone commissioner until other nominations are advanced.
Less regulation, more valuation
Prediction markets have seen an influx of legal challenges from a number of states in 2025. So far, they have clung to the argument that the CFTC is their lone regulator, not state agencies. The gaming industry, in response, has questioned the commission’s ability to effectively serve as a national gambling watchdog.
Forty-eight of 50 US states have some form of legal gambling, and a regulatory body is staffed to oversee each jurisdiction. Some states, like Nevada and New Jersey, allow considerable gaming operations and therefore allocate abundant resources to policing the legal gambling industry. Even with these frameworks in place, scandals and controversies still arise.
The CFTC has less than 700 full-time staff total, with a national scope overseeing trillions of dollars in commodities, futures and, now, prediction markets.
The longer the shutdown continues, the more uncertainty the CFTC faces. Many federal workers from various agencies are potentially facing layoffs, although legal battles on this issue have already begun. Other financial bodies like the Federal Trade Commission, the Consumer Financial Protection Bureau and the Treasury Department have seen staff reductions this year.
Prediction markets, in the meantime, have flourished under the current environment. Platforms Kalshi and Polymarket have fetched multibillion-dollar valuations and both are now partners of the National Hockey League. Meanwhile, the stocks of sports betting market leaders Flutter (FanDuel parent) and DraftKings have dropped by nearly 30% and 40%, respectively, since 1 September.
The longer the government shutdown stretches, the more uncertainty the gaming industry faces.