Closing the Gun Show Loophole? Evidence on Federal Firearms Licensing and Background Checks

In May 2024, the Biden Administration implemented a regulatory change to close the “gun show loophole,” which had allowed unlicensed private sellers to sell firearms without conducting background checks. The change broadened the definition of individuals “engaged in the business” of selling firearms, potentially increasing the share of gun sellers required to obtain a federal firearms license and conduct background checks. In this study, we use difference-in-differences and event study designs to examine the short-run effect of the rule change on the number of new Federal Firearms Licensees (FFLs) and background checks completed. We find no robust evidence of an increase in FFLs or background checks in treated states relative to control states granted injunctive relief from the rule change. These findings suggest that the rule change did not measurably alter licensing and background check activity, key proximal mechanisms through which downstream effects on firearm violence would plausibly operate.