Is Having a Gamling Industry Good for a Country?

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Thursday, February 23rd, 2017 | Written by Stephen Smith

Gambling is a polarizing topic, and while attitudes towards gambling seem to be positive in general, there are still many people who are adamantly opposed to the industry. Lawmakers at national and local levels are lobbied by different groups calling for tighter and looser gambling laws at the same time, and no matter what type of legislation is passed concerning gambling, there is always a backlash from the other side.

So is gambling positive or negative for countries and states that legalize it? Let’s take a look at the benefits and drawbacks of legalized gambling.

Benefits of Legalized Gambling

1: Less Illegal Activity

Even in countries where all forms of gambling are illegal, people still continue to gamble, and illegal online casinos and secret back-room card games provide a means for those who want to enjoy wagering to place bets. Legalizing gambling, on the other hand, takes the games out of the shadows. With regulation, it is possible to prevent money laundering by terrorist groups and organized crime via gambling, while violent collection methods are also curtailed by legalizing the industry.

2: Tax Revenue

The number one reasons for legalizing gambling is taxation, as local, state and federal governments can receive millions from taking a portion of the gross gaming revenues earned by gambling operators. The money can then be used to balance budgets and fund social programs that might otherwise be done away with due to a lack of financial resources.

3: Job Creation

Casinos provide jobs for local residents, and large resorts may employ hundreds to thousands of people. In fact, some cities’ entire economies may be helped to grow because of gambling, with a prime example provided by the city-state of Singapore where more than 20,000 people are employed at its two integrated casino resorts, which in turn generate around 2% of Singapore’s economy.

4: Tourism

Brick-and-mortar casinos can bring tourists flooding into cities, especially when they are integrated resorts with accommodation, fine dining, shops, theaters, and many other such entertainments. Consequently, tourists will end up spending their money outside of the casinos, and thereby contribute to the health of the country’s overall economy. In Nevada, for instance, last year the state saw its casino market return to profit for the first time since 2008 due to a significant uptick in their room rentals and fees. Needless to say, Las Vegas’ all-round tourist attractions and shows was instrumental in the recent return to profitability, and commenting on the development, Michael Lawton, Senior Research Analyst for the Nevada Gaming Control Board (NGCB), said:

“It’s been a long road to get back in the black. It’s good not only because it’s net income for the first time, but because it’s net income in all areas across the board.”

5: Online Gambling

The online gambling industry is now recognized as an important tool in attracting younger gamers to land-based casinos, as practicing the various games online helps prepare them to what can sometimes be a daunting physical visit to such venues. Since introducing regulated online gambling in 2013, for instance, New Jersey’s market has not only produced revenues of $500 million, but as an Eilers & Krejcik report highlighted recently:

“Online gambling is becoming a highly effective tool for Atlantic City’s casinos. Increased integration between the online and live casino appears to be driving additional play and visitation at land-based properties.”

Drawbacks of Legalized Gambling

1: Gambling Addiction

Gambling addiction is not a myth, but a very real disease suffered by millions of people. While it’s hard to find definitive figures, some studies estimate that 3 to 5 out of every 500 gamblers are likely to become an addict, and those people who develop gambling problems can lose everything and ruin their relationships. Many people believe that legalizing gambling makes it too easy for those at risk from gambling addiction to become hooked on the games.

2: Negative Economic Impact

Some people argue that opening a casino in a town takes money away from other businesses. While it’s not clear how valid this argument is, the logic behind it is that if locals are spending money at the casinos, they will not have money to spend shopping, dining and enjoying local entertainment.

The Final Verdict

While there are some problems that arise when gambling is legalized, the benefits can outweigh the negatives, and it is ultimately up to governments to put laws in place to protect consumer interests. Many of the risks associated with legalizing gambling can be mitigated through smart regulations and diligent enforcement.