____________________________________________________________________________________

To:

All Tusk Strategies, Tusk Ventures and Ivory Gaming clients and portfolio companies

From:

Tusk Holdings

Re:

Initial thoughts on what the election means for you

Date:

November 9, 2016

While the reasons for the Presidential election results will be debated by pundits and political
scientists for decades to come, each of you run businesses in the real world. And by definition,
your work with us means you face regulatory, legislative and political challenges and
opportunities.
This memo is a very initial attempt to help you answer what does this mean for me? To be
clear, we are not macro-economists and this memo is not designed to answer global questions
about the markets or foreign policy. It provides an overview of many of the issues we work on
with each of you. We would welcome the opportunity to hop on a call tomorrow (well, its
already tomorrow) to discuss the particular potential impact to your issues in more detail.
Needless to say, there is going to be a lot of uncertainty. That presents opportunity, especially
with federal agencies. Theres very little information on who Trump will appoint to most cabinet
positions. But Clinton likely would have given significant input to the appointments of the
following agencies to organized labor and to the Sanders/Warren wing of the party:
US Department of Labor
Consumer Financial Protection Bureau
US Department of Education

Food and Drug Administration

Environmental Protection Agency
Securities Exchange Commission
US Department of Health and Human Services
Federal Trade Commission
Federal Communications Commission
National Labor Relations Board
Center for Disease Control
Commodity Future Trading Commission
The odds of seeing activist, tough-on-business, cabinet members who aggressively pursue
regulatory action are lower. This also means that pending mergers are far more likely to be
approved, charter schools will not face federal opposition, the sharing economy will not risk
being shut down by new federal worker classification regulations, the SEC will not aggressively
involve itself in private, illiquid companies and assets, and peer-to-peer lending will not face
significant federal opposition, among many, many other issues.
Without identifying which of you are concerned with what, here are some initial points to
consider:
For Retailers:

Retailers will not face as aggressive regulatory scrutiny and action from agencies like the
EPA and FDA. Cities and states may try to fill the void but most will lack the resources
and jurisdiction to do so.
While efforts to push new taxes on certain types of food and beverages will continue on a
local level, advocates will have their hands full fighting legislation they dont like from a
Republican Congress and new policy positions from the FDA, HHS and the CDC.

For Developers:

Federal involvement in land use issues will decline. Developers will have more
opportunity to build on and adjacent to federal property (in cities too not just in rural
areas).
For Gaming Operators (Casinos and E-sports/ Digital):

Trump will likely not oppose gaming expansion, in fact he will probably be pro-gaming,
therefore it is unlikely he will have an agenda on the federal level that will restrict/impact
gaming initiatives.
Trump will likely oppose new federal regulations that restrict online gaming (casino or
skill), as long as there is a domestic benefit. That means he could support lifting the
federal ban on sports betting. The impact on daily fantasy sports should be minimal.
For Mortgage Lenders:

The CFPB will likely be eliminated altogether. This will shift some enforcement to state
regulators and Attorneys General, but the trend of imposing new standards and
requirements will end.
For Law Enforcement:

The Department of Justice is less likely (probably under Attorney General Giuliani) to
investigate and prosecute police officers involved in shootings. Those in law enforcement

who feel like the federal government does not support them will likely soon feel
differently.
For Education Reformers and School Operators:

While Clinton may not have named Randi Weingarten as Secretary of Education,
Weingarten would have had veto power over the selection as well as major input into
most Department policies. This would have meant aggressive new federal policies
designed to limit the growth of charter schools, vouchers and education tax credits, and
other reforms. That will now not happen. However, a Trump presidency also means the
death knell of Common Core. While many for-profit higher education providers will
continue to struggle, they are less likely to face aggressive action by DOE (unless Trump
wants to reverse the legacy caused by Trump University).
For Telecommunications Providers and Content Companies:

The likelihood of federal intervention to prevent industry consolidation will decline

(although given Trumps personal views on media, its hard to predict exactly what hell
do and he will likely be far more involved in this than most regulatory issues). This
probably is good news for companies seeking mergers (AT&T-Time Warner) and could
revive proposed mergers rejected by either DOJ or the FCC.
For Pharmaceutical Companies:

Anti-consumer behavior like Mylans Epi-Pen debacle will remain a hot topic for
legislators.

For Clean Energy Providers:

Clinton likely would have continued the Obama administrations policies in favor of this
emerging sector. Trump will be less likely to support federal grants and tax credits for
clean energy providers.
For Sharing Economy Companies:

The odds of federal changes to the tax code and labor laws creating a new form of worker
classification that sits between 1099 and W2 just went way up. Even if it takes a few
years to pass, the possibility of federal action gives states an incentive to act first rather
than having a new system imposed upon them.
For Autonomous Vehicle Developers:

Trump may not oppose the notion of autonomous trucks and cars but a Republican
Congress may favor the OEMs ahead of tech companies like Amazon, Google and others
further along in the development process. OEMs will want to slow walk federal
regulations, forcing the more aggressive startups to pursue state legislation instead.
For Those in the Budding Cannabis Sector:

Trumps remarks have been all over the place regarding marijuana: early on (1990s) he
was in favor of legalizing and taxing marijuana to help win the war on drugs, but recently
hes said recreational legalization in Colorado has caused some real bad problems which
need to be addressed.

At the same time, hes stated support for medical marijuana and based on what we know
(and what hes also said), it seems most likely hell leave marijuana policy up to the
states (especially with California, Nevada, and Massachusetts legalizing recreational).
For Health Tech Startups:

Trump will try to repeal Obamacare, which includes significant subsidies for wellness
and preventative medicine currently available to many employers.
Depending on his efficacy and the subsequent programs he implements, his actions may
pose a threat to the wellness market, especially if employers/employees end up paying
more for health care.
With that said, any threat could also be counteracted (over time) by progressive consumer
demand/behavior.
For the Waste Management Sector:

Most of whats driving zero waste efforts is coming from the state/local level. Because
most new, technologically oriented providers already cater mostly to blue states/urban
areas where traditional hauling costs are higher, it should have little impact.

For Insurance Providers:

Insurance is regulated at the state level, so the regulatory landscape remains the same.
There may be some atmospheric effect on the state insurance regulators if the regulators
feel that this election is a rebuke of heavy-handed obstructionist regulation. So regulators,

particularly in states that shifted right in this election, may want to take a more
cooperative approach.
For Startups Generally:

Trumps appeal might lead to a larger national conversation on technological efficiency

as a value and the costs it exacts on the labor market. Expect to hear references in the
next couple of weeks to autonomous vehicles displacing truck drivers the largest
profession for non-college educated white males (Trumps base) as an example of how
people believe the economic and political systems ignore their interests. And as the reach
of technology continues (at an unprecedented speed) to make more and more traditionally
white-collar occupations streamlined e.g. doctors in telehealth, lawyer apps the swath
of workers fearful of being displaced by innovation may grow. While this likely will not
significantly shift states overall regulatory receptiveness to innovation, new coalitions
opposing the tech-favorable regulations could be formed and general appeals to
efficiency could be less effective.
Keep This in Mind:

As Tip ONeil said, all politics are local. States and localities will all react in their own
ways to a Trump presidency some will run into it and others will do all they can to defy
it. Regardless, its important to remember, because so little gets done in Washington DC,
a lot of what we already do today is focused on state and local regulators, and for the near
future we do not expect this to change. Having said this, we think it is critical to have a
grasp of how major changes at the federal level may affect you and your business, which
we will continue to be laser focused on in the coming months.