Longest U.S. government shutdown sends shockwaves through the gaming industry

With the current US federal government shutdown now stretching beyond 35 days, it has become the longest funding lapse in modern history and the latest in a long series of budget standoffs. Around 900,000 federal workers are furloughed, and roughly 2 million are working without pay. For casinos, sportsbooks, and integrated resorts, that is no longer a distant political story: it is a direct shock to travel, discretionary income, and regulatory visibility.

The macro backdrop is already worrying. The Congressional Budget Office has warned that a shutdown of this length could trim one to two percentage points from fourth-quarter GDP and permanently erase somewhere between US$7 billion and US$14 billion in output. Those lost dollars include trips that will never be rebooked, conference business that moves elsewhere, and gaming spend that does not come back later in the year.

Travel shock and the AGA-backed warning

The first fault line runs through the travel system. Early in November, the US Travel Association sent an urgent letter to congressional leaders calling for a "clean" funding bill to reopen the government before the Thanksgiving rush. The document was signed by more than 500 organizations across the tourism and hospitality ecosystem – among them the American Gaming Association, major hotel groups, MGM Resorts, Caesars, and large regional operators.

“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. “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.” 

US Travel estimates that the shutdown is already stripping more than US$1 billion per week out of travel-related spending in the United States, with cumulative losses in the mid–single–digit billions since the start of October. At the same time, Transportation Department officials have publicly acknowledged that air traffic control and airport security are being maintained by tens of thousands of staff who are not being paid, and that rising absenteeism is putting the system under strain.

For destination gaming markets, that is a serious warning light. If even a portion of US airspace has to be throttled to keep traffic safe, the resulting cancellations and delays will land directly on room occupancy, average daily rates, and casino win in hubs like Las Vegas and Atlantic City – just as they approach the peak holiday period.

Las Vegas under pressure

Las Vegas was not entering this shutdown from a position of strength. Industry data show that visitation has been flat to slightly negative on a year-on-year basis in recent months, and international arrivals at Harry Reid International Airport have been under pressure amid weaker cross-border demand. The fourth quarter, anchored by the Formula 1 Grand Prix, Thanksgiving, and Christmas, was supposed to help close that gap.

A prolonged government closure undermines that narrative. Consumers facing uncertainty about their jobs or paychecks often trade down their travel plans or stay home altogether. Higher fares or unreliable schedules can tilt marginal visitors toward regional casinos within driving distance instead of a long-haul trip to Nevada. For Strip and off-Strip operators that have been investing heavily in non-gaming amenities, shows, and premium events, the timing could hardly be worse.

Tribal gaming filling federal gaps

For tribal governments, the shutdown is even more existential. Recent coverage in Native-focused media and statements from congressional committees on Indian affairs describe how frozen or delayed federal funding is already affecting health, education, and infrastructure programs in Indian Country. In practice, that means tribal leaders are turning to gaming revenue to keep core government services running.

Some nations with diversified economies and strong casino performance say they can absorb federal shortfalls for a few months, effectively using their gaming enterprises as a backstop until Washington resumes payments. Others, more reliant on federal transfers, are being forced to consider furloughs, program cuts, or postponement of basic projects.

The danger is circular: if the shutdown weakens tourism and discretionary spend, tribal casinos will also feel the slowdown on their own properties, just as communities are leaning harder on that income. Expansion plans for hotels, new gaming floors, or online launches can quickly move from "delayed" to "indefinite" in an environment where both federal and local budgets are under stress.

Prediction markets and a thinly staffed CFTC

The most dynamic moving piece sits in the digital realm. Event-based prediction platforms such as Kalshi and Polymarket allow users to trade contracts on political, economic, and even sports outcomes. Rather than being licensed as gambling under state law, they are structured as financial products and fall under the jurisdiction of the Commodity Futures Trading Commission.

The CFTC entered this shutdown already stretched. According to its own contingency and staffing plans, the agency has fewer than 700 full-time employees to oversee the massive US derivatives market, and is currently operating with a single acting commissioner while a new chair awaits confirmation in the Senate. Under shutdown rules, many routine activities and parts of its enforcement work are curtailed or deferred.

In that vacuum, prediction markets have continued to grow. Recent market data show contracts pricing a high probability that the shutdown would surpass previous duration records and potentially run well into November. Financial media have increasingly treated those prices as one of the few real-time indicators of political risk at a moment when many official economic statistics are delayed.

For established sportsbook operators and state regulators, this raises uncomfortable questions. While they shoulder state-level compliance and tax obligations in a period of weaker consumer demand, a new class of federally supervised platforms is gaining visibility and volume under a watchdog that is temporarily operating on minimum power.

What the industry should watch

If lawmakers manage to resolve the impasse quickly, much of the direct hit to gaming could be described as a sharp but temporary shock. If the shutdown drags on, late 2025 could prove to be an inflection point.

Casino and betting executives will be watching three sets of indicators in the coming weeks:

• High-frequency measures of air travel and hotel occupancy in key gaming markets.

• Signs that tribal governments are diverting more gaming revenue into essential services, leaving less for reinvestment.

• The evolving stance of federal regulators – above all, the CFTC – toward prediction markets and other event-linked financial products.