The question has been bandied around in both the political arena and the public sphere for ethical, moral, and even religious reasons: should gambling be legal?; is it a morally or ethically good activity that we should aim to promote as a society?; and does it help or hurt the overall economic picture? While one can make an endless amount of arguments concerning the issues that surround the first two questions, it is the question of fiscal impact that gambling has on the economy that is the focus of this article.
Looking at evidence-based reasons, let’s take a look at a few arguments in the debate for and against using gambling as a boost to the economy.
Weighing in with the Detractors
Casino Dependence on Addicts
It is often argued that gambling has a predatory effect on those who can least afford addictions or long-term financial debt as a result of gambling money away. A report from the Institute for American Values citing a Canadian study suggests that casinos depend on those that exhibit gambling behaviour that could be qualified as addictive to support the vast majority of their revenues. That is, 25% of casino-goers provide a whopping 96% of the gold that the casino industry sees in profits. The consequence is that this takes a toll not just financially, but emotionally and with relationships as well, often relationships within a family where children or spouses might depend economically on the person with a gambling problem. Other estimates place between 40%-60% of revenue earned from addicts, many of whom are older – half of casino goers are over 50, and the industry targets people even in the 70s and 80s who have nothing better to do.
Impact on Property Value
A report from the National Association of Realtors has said in a report that, similar to the relationship that casinos have with their clients who can barely afford to pay their pensions, much less their gambling debts, the overall effect casinos have on property value is parasitic. In casinos being ‘unambiguously negative’ for surrounding property value, communities within a 10 mile radius are disproportionately affected, displaying rates double the average of problem, or addictive, gambling. This corresponds to a unsurprising statistics vis-à-vis rates of home foreclosure, domestic violence, and economic distress, all of which are significantly higher as a result.
Casinos do not Help Pre-existing Business or Locals
Prior to the late 70s in the US, in nowhere except the state of Nevada was gambling legal. Cue: Atlantic City, the first experiment in trying to revitalise a local economy with the help of the gambling industry. The only problem is that it has not worked out as expected. Yes, there were hotels that sprouted along the seafront which hired thousands initially, but the stores and business that were there since the beginning? They saw nothing come of it, and even have trouble keeping a solitary grocery store in the black.
In fact, according to the project manager for a new Wynn casino being built near Philadelphia, no one should be surprised because ‘that’s not what casinos do.’ Even industry insiders are no longer using that kind of rationale! It was for this very reason that, after the American Civil War, gambling was suppressed.
Paper Don’t Lie: Why the Pro-Gambling Lobby is Massive
It is impossible to argue with the facts, hard and fast, irrespective of where the money is coming from or the impact it might have on individuals and families. The casinos and their developers walk away with lined pockets, the government makes a hefty sum of taxes off of it all (which disincentivises asking too many questions), and a lots of people find employment because of the industry. All of which means, people are making money.
How much money, exactly? According to the American Gaming Association, there was a $240 billion total economic impact in the general economy, with $38 billion accrued in total taxes, and some 1.7 million impacted jobs. No matter how you slice it, those figures are staggering. It is why places like West Virginia, a historically destitute local economy that has relied on a dying mining industry as its primary employer for generations, has invited casinos that since 1994, have raked in almost $200 million dollars per each one built.
Revenue for Poorer Communities
It isn’t just West Virginia that is being helped, but indigenous communities and even depressed economies around the world. Of the $81 billion in 2013 revenue that gambling earned, $30 billion of that went to casinos operated by Native Americans on reserve land. And in countries with poor Internet penetration like Zimbabwe where they cannot enjoy online gambling such as casinojuggler.com, casinos have helped attract tourism and driven up employment numbers. In countries around Africa, like Nigeria, Tanzania, Kenya, and South Africa, gambling has been on the rise for years and brought in tens of millions of dollars.
So, the question remains, does gambling hurt the economy? Politicians and certain sectors of the economy are certainly seeing undeniable profit, but at what cost? Only you can be the judge.