Land-based gambling, along with online casino betting, affects the state as well as the individual. Although gambling is considered a controversial subject due to potential hazards befalling the players, certain economic advantages cannot be overlooked. See here The Impact of Gambling on Economic Development and economic growth. How does Gambling Increase Tax Revenue and Employment?
According to Best Casinos, legalized land-based and online casino gambling does bring a plethora of perks to the country that legalized it, as we will see shortly. See below how gambling affects economic growth and development.
Economic Benefits of Legalized Gambling
Online gambling is soaring, even more so during the pandemic. Studies claim that global online gambling market share and revenue are expected to reach $100 billion by 2026. Players enjoy betting games regardless of the time and location, and the ability to visit a site without leaving the house is a big incentive for land-based casino fans.
On the other hand, land-based casinos still a big factor in the industry, and they aren’t likely to disappear anytime soon. But how do these establishments – both real and virtual – Impact of Gambling affect the economy?
There are three ways:
- Tax revenue increase
- Employment rate growth
- Retail sale growth
In recent years, many countries worldwide legalized gambling by introducing rigid legal frameworks within which such establishments must operate. Many saw this as a potential danger for the countries – but the governments took into consideration all the pros and cons before deciding. Tax revenue, one of the biggest perks, definitely taken as a priority.
Gambling Increase Tax Revenue
In general, casinos pay high taxes, and that money is not something we can easily disregard. When a country introduces gambling, it essentially brings all gambling brands (land-based and online) into the system and forces them to pay taxes for all revenue they’ve received in the past fiscal year.
With each year, the Impact of Gambling revenue grows, which means states, where casinos are legal, can reap bigger taxes than before. By filling the coffers, the government can then decide where to channel the money: it can be used for building roads, hospitals, and countless other purposes.
The question of tax revenue depends on the tax rate and the size of the market. For instance, smaller markets in which gambling not considered a fruitful activity have smaller revenue, which affects the tax revenue. Similarly, tax rates vary from country to country – the difference can be from 2% to 20%!
A solid, failsafe legal framework with a fair tax rate can do wonders for the state as it will both provide the government with a chance to cash in the tax money from casinos. And considering people gamble with or without legal permission; a legal framework gives the country a chance to control the market offer better conditions to the players; cash in on the money that would otherwise remain in the hands of the operators.
Casinos Also Increase Employment
This mainly refers to land-based casinos. There have been several instances in which the employment rate in the area where a new casino is established dropped considerably. The decrease of the rate of unemployment is potentially the result of the local population finding work inside the establishment; – grand gambling venues employ hundreds of people – or at local stores and services surrounding the establishment.
Of course, this mainly depends on the area in which the venue opened. Although no one can guarantee that every time a site opens, the rate would drop; the implication that opening casinos might help locals find employment is an important factor for a state when contemplating gambling legalization.
This is also directly tied to the average wage increases. Several studies have been done on the subject, some more comprehensive than others, and they all point to one thing; opening casinos do indeed open employment opportunities for local citizens. The increase in their wages follows as well. A study was done by the University of Wisconsin in 2013 even showed that US states that have legalized gambling have higher average wages than the states that haven’t.
Retail Sales Soar with Casinos Nearby
This is another point that’s closely related to land-based sites. It’s similar to the employment rate increases, as local retail stores and offices get more attention – and bigger profits; – if there’s a gambling establishment in their vicinity. Simply put, casinos may be a great tourist attraction, which can mean only one thing; – everyone close to it will receive visitors. Restaurants, museums, shops, and markets are bound to be on the list of places to visit for non-local visitors who are there on a vacation.
However, the increase in popularity of online casinos is bound to affect the retail profit boost, as most players nowadays switch to handheld devices for betting and wagering games. Regardless, this is still a good side of gambling-related economic development.
Impact of Gambling with Additional Perks
One important perk of legal gambling is the protection of players. This is somewhat of a paradox for most anti-gambling protesters; as gambling has been long considered to be a harmful activity. Truth be told, betting can be addictive and cause countless problems for inexperienced players; but addiction can also be gauged and controlled. How so?
Well, with the introduction of a legal framework and new guidelines; operators willing to enter a newly opened market will have to abide by a string of strict rules. Nowadays, gambling authorities – organizations tasked with monitoring casino operators in respective jurisdictions; – have a firmer grip on the business done in the said market. They are responsible both for the introduction and maintenance of the rules; which now include a bigger focus on player protection.
In the past few years, a number of guidelines have been introduced to protect the players from gambling harm; – either by restricting casino advertisements, raising the legal age restriction, or banning exorbitant casino bonus offers. In the UK, the Gambling Commission, the authority overseeing all online gaming activity; banned the use of credit cards for casino deposits to prevent players from overspending; or using money that they cannot afford to spend by going into debts.
Safety of the players has always been a priority; but now the institutions have better methods for inspection of the rules in practice. Some examples include national gambling helplines, governmental and NGO organizations working to provide a safe environment to all players suffering from gambling addiction; as well as numerous programs for rehabilitation of the players.
A stronger focus has also been placed on anti-gambling software that works in every country of the world – and helps players either limit or ban gaming activity by themselves.
The Impact of Gambling affects everyone – the players, their close family and friends, and the entire society in general. It also affects the country, but so far, we have been hearing about the negative aspects only. When faced with the dangers of gambling addiction, it’s difficult to think of the good sides of gambling.
However, from a government’s point of view, there certainly are perks. Just some of the benefits of legalized gambling in the state unlock at least three benefits for the state economy; – including higher tax revenue, better employment rates, and even retail profit increases.
Of course, the most important thing to note is that this is all possible only if gambling is legal and tightly controlled by a gambling authority. Only responsible gaming can have positive sides for the players and the state.