The gambling industry has experienced major growth in some countries such as the U.S., Australia, Singapore, and China, during the past few years. Some studies show that gambling could be a potential development strategy. In the most basic sense, gambling refers to a game for money. This generalized definition may be debatable because most people like to gamble and bet almost everything.
Gambling, nowadays, is not being consistently shunned as an industry that disregards ethical standards of the society. Rather, it is being widely recognized and dubbed as an agent of economic development. In principle, the government can be supplied with adequate funding
, to support strategic government programs, through the contribution of bets, lotteries, and casinos. It can provide appealing employment opportunities for the part of the population that is suffering from unemployment. Nevertheless, gambling should be promoted as a neutral form of recreation, while also contributing towards economic growth, to achieve legalization.
According to traditional economic principles, casinos shouldn’t be able to exist. This is due to the fact that traditional economic principles assume that humans are rational. The reason being, as claimed by the principles, if a person A was offered a deal where A was giving a person B $50, and B gave $44 in return then A wouldn’t accept that deal. Yet, some peculiar logic makes these rational people head to the blackjack table and, inherently, take that exact same deal. It’s a major risk. It’s rewarding and that is why people do it, because of that 1/10th chance that they might win, they feel on top of the world.
Economic Impacts and Social Costs
The abnormal growth and expansion of the gambling industry has had a positive and negative impact on the economy. In essence, the most convincing incentives for legalizing and expanding the gambling and/or casino industry are economic. People advocate that casinos are a catalyst for job creation and economic development, and most importantly, they may be a new source of tax revenue. The two most powerful incentives to make casinos legal are job creation and taxes. The casino industry is service-oriented and employs a large number of full-time and part-time staff, usually in jurisdictions that previously suffered from high unemployment. Besides, the tax rate used for gambling revenue is higher than that for most goods and services.
United States of America
There are currently 44 states in the United States that host casinos, comprising a mix of commercial and tribal. They collectively supply about 44 billion dollars in tax each year while also creating additional employment opportunities. Money collected from casinos is currently a huge part of the American economy’s revenue. According to a survey, published by the American Gaming Association, the casino industry employs over 750,000 people in the U.S. Gambling has increased the total demand for goods and services in the economy. This money is directly used to stimulate the economy. When considering the multiplier effect, gambling expenses can also be amplified. Taking a risk to get financial benefits plays a big role in the American economic infrastructure.
In the past few years, in the United States, there has been growing concern that the casino industry has become “saturated.” Although there is no precise definition as to what this means, it can generally be said that there are too many casinos on the market. It can also be regarded as a situation in which new casinos cause a decline in existing casino revenue. It could imply a state of maximum capacity where increased consumer spending does not generate excess revenue.
Macau has been the trailblazer in the gambling industry vis-à-vis Asian casinos, ever since the legalization of gaming in 1847, with yearly revenues of about $14 billion. While
, Singapore has just initiated its casino operations with annual gaming revenue of around $4.4 billion. This has created new investment opportunities and enormous tourism revenues.
In India, a majority of gambling activities are considered illegal, due to the Public Gambling Act of 1867 as it states gambling (and all acts related) to be a crime. But despite that, lotteries and raffles, horse racing, and rummy are regarded as legalized forms of gambling. In the 21st century, more people have started making cash bets, especially on the Indian Premier League teams, through online betting agencies in India. Supporters of the legalization of gambling activities claim that they can lead to an enormous supply of funds for the state while the opposing party believes that gambling results in crime, profiteering, and corruption.
The Goa, Daman and Diu Public Gambling Act, 1976 allows the aforementioned states to establish casinos at luxury hotels with the prior permission of the relevant state authorities. Whilst in Sikkim, in 2002, Sikkim Casino Games (Control and Tax Rules) permitted the Sikkim government with authority over granting licenses to individuals and businesses interested in operating casinos. Furthermore, the Sikkim Regulation of Gambling (Amendment) Act, 2005 gives the Sikkim Government the authority to limit the operation of such activities to certain days and to restrict and supervise the number of legal gambling dens by granting licenses, of their own accord. Legal casinos in India have collectively generated $400 million each year from an estimated turnover of $20 billion. Currently, from a legal perspective, casinos operate in Goa, Daman and Sikkim, as stated by International Comparative Legal Guides.
The expansion of the gambling industry, simultaneously increases costs in addition to generating benefits. The costs here being the negative societal impacts, i.e., social costs. Critics of gambling believe that economic development research is insufficient to measure its social costs. The social cost of gambling can be considered from a personal and communal perspective. A gambling addiction can make individuals suffer financial losses such as bankruptcy and employment termination, and compel them to commit crimes and felonies, for instance, misappropriation of funds. Sources of money can be anyone for compulsive gamblers, especially relatives and friends. It also results in reduced productivity in the workplace and money laundering.
Gambling as a tool for economic development is still controversial, and both sides have determinant proponents. Supporters of legal gambling believe that this is a harmless recreational activity, and people should be able to splurge of their own accord. Supporters of gambling have concentrated their attention on the economic interests of their communities that use gambling to attract investment and work. Legal gambling can be used to fund certain civic services or amenities, such as healthcare, transport, etc.
According to the belief of the supporters, gambling could be used as a means to attract tourism and the restrictive measures only deviate prospective revenue to other areas of illegal gambling, or where the practice is considered legal. However, objections are raised, as opposers reckon that gambling can become an addiction which will attract social problems that can harm the society. It can destroy the lives of people who rack up huge debts or squander their personal or family income and savings.
Although they differ in form, purpose and execution procedures, Eastern and Western gambling behaviors have been around for a long time. Since ancient times, many people have congregated to any place connected to gambling activities. Without considering the moral, political and religious influences, establishing casino gambling is one of the fastest ways to promote the tourism industry.
Those who get financial and economic benefits from gambling will support it whilst critics won’t, depending on their immediate self-interest. Elected government leaders often deem gambling to be an aid towards the enhancement and stabilization of the state’s economic foundation. Bureaucrats in corporations that are promised gaming revenue often advocate for gambling to pay for agency activities. Proprietors of large casinos encourage and endorse gambling as long as they benefit, but will condemn it if the operations are competitive to their business.