Whether you’re an advocate or an opponent, there is no denying that gambling has held a long-established place in our society, and in many ways impacts the world’s economy. Opponents view it as a dangerous vice, preying on the vulnerable, creating more problems than it solves, and there is some truth to this.
But advocates argue that it spurs local and regional economic growth by providing high paying jobs and paying taxes and fees to local and state governments, which has rehabilitated its image in the eyes of many. Gambling isn’t going anywhere, and casino presence will continue to impact economies.
But does gambling lead to economic growth in the long term? And is it truly beneficial? As no truly empirical study is possible, the answers are different depending on who you talk to. Let’s take a look at the influence of gambling on the economy on a global scale.
Gambling has recently started to be viewed in a more positive light by society at large. In times gone by it has been associated with crime, both organized and street level. Now it prides itself on a friendly, inclusive image, a far cry from the dangerous, sleazy face it used to wear.
The dangers of gambling have always been apparent, but now the industry is duty-bound to inform punters of the dangers and encourage restraint. Many places offer advice for self-help – for example, gambling should be about entertainment, not winning money (for more information visit this site). This image change seeks to encourage responsible gambling rather than to goad people towards the higher stakes tables.
All casinos are bound by law to pay taxes – as businesses they are liable for corporate income tax. In the US, gambling businesses contribute over $40 billion to the federal government as revenue. Surprisingly, Las Vegas contributes $6 billion of the money, although the rates of taxation vary from state to state.
The governor of New Jersey, Chris Christie, even took a challenge to the Supreme Court to overturn a ban on gambling in his state (and he won). He projected that it would make the Garden State over $200 million a year, and sure enough, gambling blossomed in New Jersey.
Many other states have followed suit – there is good money to be made from tax revenues. In Macau, the local government collected over $13 billion from gambling businesses. And considering Macau is one of the fastest-growing gambling cities in the world, its tax revenue will continue to increase.
The business model for a casino now includes far more than a room with playing tables and slot machines. Punters can expect to find luxury hotels, top of the line restaurants and other food to suit all budgets, shopping malls, beauty salons, spas, and entertainment centers. If we look at the home of gambling in the US, Las Vegas, we see that business model at its very peak.
The casinos host huge prizefights, wrestling events, festivals of music, film, and culture and much more. All of this means that a casino town becomes a lucrative hotbed of tourist activity. Increased tourist footfall means that local businesses, shops, and restaurants will all benefit. And this phenomenon is not unique to the United States – global gambling destinations such as Macau and Monaco are also seeing multi-purpose casino resorts springing up.
Studies have shown that the take from the various services and attractions on offer often exceed the take from the tables at the casinos. Despite this, casinos are often the advertising boards drawing tourists into the community to gamble and spend. And don’t forget, all that expenditure creates more tax revenues.
In a town known for gambling, the job market is usually dominated by casinos, directly or otherwise. If we look at Macau, Asia’s top gambling destination, gambling companies are the city’s biggest employers. That means a significant proportion of the population in the Chinese jurisdiction wouldn’t make ends meet without the casinos.
Countless small businesses that have sprung up in towns from Atlantic City to Monaco owe their entire existence to the heavy draw which casinos possess. And each of those businesses requires people to staff them. In turn, workers and tourists alike need places to stay and places to eat, which opens up another sector of employment opportunities. Las Vegas is the ultimate example of the power gambling holds over an economy.
The city itself was no bigger than a few football fields until the casinos opened – now it is home to over two million people, almost all of whom earn money as a direct or indirect result of the casinos. Statistics also testify that the average wage is substantially higher in casino towns than in those without – and that customers are more likely to tip big!
And in the case of many Indian reservations in America, casinos have offered a much-needed lifeline in these often neglected and stagnant economies, creating jobs and injecting some money into the area.
Sports and Events
During major sporting events, areas that may not seem like gambling destinations year-round suddenly blossom. During the World Cup, everyone gets in the mood for a flutter on the football. In France each year, thousands is spent gambling on the Tour De France. The United Kingdom sees a huge spike for gambling on the horses when the marquee races of the season, such as the Grand National from Aintree or the Epsom Derby, are run.
Boxing and MMA, particularly pay per view prizefights are extremely popular with punters. All this event by event gambling action boosts local economies and gives local businesses the opportunity to attract customers from the increased tourist footfall.
Real estate takes a huge boost from casinos (and even online gambling hotspots such as Gibraltar and Malta – both betting regulatory areas). In Las Vegas, before the recession of 2007/8 house prices were skyrocketing, everyone wanted to have a property in the entertainment capital of the world.
While this bubble was burst by the economic crisis, over the last decade prices have been steadily increasing again. In Europe, areas with new casinos often see an influx in ex-pats, many of whom will pay above the odds for a property in such a location.
Gambling is a fixture in modern western economies and further afield. It impacts businesses, local governments, individuals, and society at large, and its power, whether positive or negative, should not be underestimated.