The impact of gambling on local economies

Few subjects are as divisive and morally polarizing as gambling. Some people say people should have the freedom to do what they want while others declare the activity an overall ill to a society. As of late, however, there has been a position gaining traction across many worldwide governments that, regardless of those arguments, if people want to play they are going to play, and therefore they are allowing it but under strict control and regulation of the casinos.

Today what we are going to do is consider on a micro level what effects casinos have on local economies when they launch. This is beside the entertainment factor, which many people innocently enjoy in moderation every day, such as:

• slots
• crash games like jetx game
• bingo
• blackjack
• poker

Economic benefits

Gambling has long by many been recognized as being a major economic boon, propping up all kinds of adjacent industries. When casinos, racetracks, and betting contours pop up, this often means in an influx of money entering the coffers of adjacent spheres.

Some of the most commonly cited benefits are:

Newly created jobs

This is a direct, palpable impact on the local economy. Big casinos can end up necessitating as many as thousands of workers, from the casino employees themselves to hospitality to security to transportation to management. Consider that there are plenty of areas with quite high unemployment rates, such as 30% or worse. The wages often pay a lot better than other local options too. Of course, all of that money is going to be subsequently spent among the community.

Tax dollars

When collected by local governments, these are funnelled right into public services, infrastructure projects, and social programs, helping to develop the whole area. In fact, there are cities such as Las Vegas that owed their entire ascension to gambling alone. Often after hosting a profitable casino, small towns end up developing new roads, airports, and public transit systems. Casinos themselves even sponsor or collaborate in a lot of those projects.

Tourism boost

This is an often underestimated but powerful aspect of the gambling industry. These destinations attract thousands or millions of visitors annually which leads to an increase in demand for accommodations, restaurants, and other forms of entertainment.

Economic drawbacks

When people declare the above benefits, critics often shoot back with the less obvious economic consequences of allowing a casino to settle in. Of course, this comes second to the greater concerns which are social and crime-related. However, the economic counterarguments are worth mentioning.

Economic drawbacks

Though there are many jobs generated by casinos and a lot of new tourism operators will crop up to delight the out-of-towners, one of the first entities to suffer may be businesses offering some of the same non-gambling-related accommodations that gambling complexes often include. Casinos frequently operate as self-contained entertainment hubs featuring shopping, restaurants, and hotels on their own premises.

This can result in a lot of the regular customers of other casinos, stores, and hotel guests taking all their business to the casinos instead. Eventually, many of them close down. On top of that is financial inequality. While casinos do generate substantial revenue, the profits go to the shareholders and large investors. So a lot of wealthy individuals end up eating a lot of business instead of local small businesses.

Fiscal dependence

If a city or locality comes to rely heavily on gambling for tax revenue and employment, economic downturns can have devastating effects. If a casino shuts down or revenue declines due to regulatory changes or competition from other regions for instance, there could be abrupt budget deficits, leading to cuts in public services.

This was precisely the case in Atlantic City when neighboring states legalized gambling, drawing customers away. It’s always ideal for a local economy to be diversified and not have all its eggs in one basket.

Social ills

Precisely the reason why in most places gambling remains illegal is that it’s considered to pose a range of hams to society at large. This is exactly why Islam outright forbids it and Buddhism frowns upon it, making it illegal almost everywhere in Asia. On the whole, people lose more often than they win, and there is a tendency for people to easily get addicted to the highs and lows.

People are also really tempted to test their luck since there’s the tantalizing opportunity of hitting it big, even if it’s an outside chance. Thus, many people, after losing out a good chunk of their savings feel tempted to keep chasing those losses, expecting luck to inevitably swing back in their favor. So it poses a big potential harm to at least a portion of gamblers.

Beyond that though, there are more serious risks associated with it, namely money laundering and the financing of terrorism. Casinos are frequently used as a shell to enable those types of operations.

Regulation and oversight

Governments hold a lot of responsibility to properly take care of their citizens. This is the only way to balance the benefits and the detriments. Beyond that, it’s the government’s moral responsibility to also promote responsible gambling. There are several key areas that the government must account for to keep the decision positive for the community.

The government body responsible for regulation typically has a wide range of hoops it forces gambling operators to jump through in order to remain licensed.

These include:

• following any laws that the state or country deems strategically beneficial for citizens;
• giving the authorities access to view and test the code, design, and software of the casino;
• having a local representative residing in the area and available to be contacted whenever any issues arise;
• payment of a license fee which the territory can use for public projects
• implementation of anti-fraud measures and know your customer practices.

Technological challenges

Advances in technology, the rich diversification of the gambling genres, and online gambling are rendering the casino landscape much more complicated. New genres are cropping up all the time to cater to people’s desire for instant gratification, adventure, and escapism. A lot of casinos operated online nowadays permit the use of cryptocurrency. Many lawmakers have no idea even how the technology works so they don’t know how to classify it.

Pushback against online gambling

When these online casinos crop up, they are another moral dilemma. In the United States, casinos are legal in almost half the states but when you consider the presence of Indian reservations who are able to legalize gambling on their territories, there is actually a rather significant presence of casinos already at least somewhere in most states.

A lot of these casinos are thus ardently opposing the legalization of online gambling as well as brick-and-mortar casino establishments outside of those Indian reservations. Thus, online gambling is only legal in 7 states currently.

The same development took place when states were given back the right to set their own sports betting laws after the Supreme Court overturned the Federal ban that had existed for nearly 30 years. When that happened, sportsbooks in Nevada lost a lot of their business to the subsequent 39 states that had almost immediately legalized sports betting after the ruling.