Economics of gambling

The Evolution Of Major Casino Markets

gambling behaviors

Gambling Development

The many factors that cover gambling have all been changed to include a dose of fun, excitement and jaw-dropping action that is hard to resist.

Effort & Rewards

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Lottery Ticket

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Casino Influences

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Unique Factors to Demand for Casino Gambling

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Crowding out competitors

Casino Industries

Learn all about the many aspects that revolve around casino industries, as we manage to bring out credible steps that keep competitors at bay and promote them to think about the services that they offer.

SOCIAL IMPACTS
MARKET COMPETITION
CASINO THREATS

From Our Blog

How The Gambling Industry Influenced The Economy Of Canada

Canada began gambling in 1969 when the criminal code of Canada was changed so that the provinces and territories of the country could raise funds by selling regulated lotteries. Since then Canada has grown its gambling business steadily by legalizing betting and gambling on events like racing, commercial casino houses, Bingo, lotteries, video lottery terminals etc. All the most betting is done legally under government supervision, a certain amount of gambling is done illegally in private betting houses, non-governmental lotteries and gaming houses, and online gambling.

gambling

Recent research has found that over 100 thousand Canadian are employed in the gambling and gaming sectors. It also states that this is truly perceptive and may have even more. There are several direct and indirect effects of this among the people in Canada. According to a recent statistical study, the number of people employed in this sector easily exceeds 267 thousand full-time employees. This means that it has had a direct influence on the amount of revenue generated and the salaries of the employees.

According to the director of the Canadian gaming association, the gaming sector has exploded in the past few years and has seen a large rise in the usage of machines related to it. It has become a popular form of entertainment throughout the length of the country. So popular in fact that it has been termed the most important and attended forms of entertainment in Canada.

The gambling market(Must Watch) adds a whopping 15 billion dollars into the local market via direct and indirect sources. Around 40% of this money is used to pay the employees and for buying more gambling-related equipment, products and services. When it comes to the gambling sector in the hospitality department, gaming-based entertainment accounts for the revenues generated by fully operational resorts and restaurants, besides the accommodation related services that bring a large chunk of revenue to the country. Related businesses like alcohol, food, accommodation, non-gaming related entertainment etc. also gross roughly 700 million dollars in total each year. In fact, a large part of the money that Canada required back in 1976 to organize the Montreal Olympics came from the gambling sector alone.

the gambling sector

Conclusion

So it is evident how much the Canadian economy depends on its gambling sector. This may set an example for other countries trying to step foot into this industry. It may be a good investment for fast-developing countries like India, China, Japan, South Korea, Taiwan etc. Countries such as Malta, Algeria, Isle of Man etc. have already started being lenient on their gambling laws and have started to reap results from it, and so should other countries.

 

How Gambling Impacts Positively On Society And Economy

Casinos have been a part of urban lifestyle for quite a long while, especially in developed countries like the USA, Canada, the UK, Britain etc. It is therefore generally considered a place of luxury, and with gambling having a generally negative image in society, casinos fall into a black mark there as well. However, it must be noted that casinos do have positive impacts on society and the economy. A few have been discussed below.

 

Jobs: A large number of jobs are created by both brick and mortar and online casinos. In the case of brick and mortar casinos, a number of jobs need to be done. Since casinos have a rating of 4 stars or more, they have several amenities that require manual assistance. These include slot operators, cleaning staff, poolside assistance, cashiers, waiters, dealers etc. Each one requires different levels of education and practice and therefore provides a large group of people with jobs. In the case of online casinos, coders are the most important workforce. They are required to take care of the security of the website and make sure that no fraud is committed. This is especially important in online casinos because of the hacking risk. So it is evident from this that a large number of people get employed due to casinos.

 

  1. Economic development: Due to the sudden increase in jobs in society, a large number of people suddenly get employed, which in turn increases the per capita income of people. A higher per capita income implies a higher purchasing power for the people in the state, and this increases the overall welfare of the people. Even though per capita income is not a reliable source of checking a country’s development it has been observed that a country that promotes gambling and casinos has a higher GDP growth percentage than those that do not promote it. So at least theoretically speaking it generates a small amount of revenue in society.
  2. The Taxpayer’s Benefit: governments of countries sea casinos as a luxury item and they are not completely wrong. Even though betting like lotteries are allowed in most countries, casinos are generally considered more expensive and therefore taxed higher. This higher taxing means more revenue for the government, and this money funds a lot of projects necessary to increase the overall welfare of the people of the state.

The Taxpayer's Benefit

Additional businesses: With the increase of casinos in a city, a lot of other businesses also thrive. These include restaurants, hotels, inns, lodges, thrift shops, souvenir shops, etc. that can grow with them the immense influx of people from different parts of the world.

 

Why Does a Casino Make a Profit if the Games Are Random?

It is no more a surprise to a majority of the population that casino gambling has set foot on becoming the most revenue-generating industry in a country. Every year, the trend has been upgrading, and more and more countries are indulging in the gambling funda. Where does all this money come from? A popular saying goes ‘The house always wins’. No matter what strategy you implement, in the long run, this holds. This happens for two main reasons:

  • For every win an individual makes, the house always has a share.
  • They carefully examine the odds that will cost colossal payout and set them lower than the winning odds. This trick has ever worked for the casinos. Some of them in popular cities like Vegas hire skilled experts to calculate these odds. Now, that’s how crucial it is for them.

The science behind the wins

The primary way by which the casinos make a profit on the random games is by calculating the odds. Odds are the probabilities by which you can calculate your win.

When you consider flipping a coin, you either win heads or tails. So the odds of winning to losing are 1:1, i.e. you either win or lose.

Similarly, if you roll a die, the odds of landing on a 6 is 5:1. On 1:1 odds, you would call even money that is if you bet $100, then you either win or lose it. Whereas, in case of a die, you’d win $500 every time you won and $100, 5 out of 6 times you lose. The same logic is applied in casinos as well. They make a profit by offering pays that are lower than the odds.

If they risked your $110 on coin flipping, then 50% of the time, they’d be making a profit from your money, and for a game of die with 4:1 odds, you’d win the amount only once and the other three times, it would be in the casino’s pocket.

Blackjack

There are a lot of random games on the casino floor, but let’s discuss blackjack because it seems like the one where the house does not have an edge. It might seem like the house has no advantage in this game because it depends mainly on the player’s skills and how well he plays his cards. But there is a flip side. Every time you’re at the table, you have to play first before the dealer, and if you bust you lose all your chips. The same happens if the dealer busts hers. Whatever the case may be, the house will get its profit.

Blackjack

Why people still gamble?

Despite all the “odds“, people still love to spend their money carelessly one game after the other. There could be two reasons for this:

  • Poor math education to see how the casino is making a profit from these numbers.
  • A simple strategy called short term variance is employed. If you roll a six-sided die six times, there’s a higher probability of getting the same number more than twice. And if it is rolled 6000 times, then it remains equal. Players thrive on this and call it luck. There are always exceptional cases where players make prodigious amounts of money in concise terms.

 

How Casinos Benefit The Community

Since their spike in popularity due to popular films, casinos have been on the rise as a place of gambling, winning money and to some extent recreation. However, knowingly or unknowingly casinos do benefit the region around which it is built. Given below are a few of those benefits.

Job Creation: With the creation of a casino, a large number of jobs are created. This is applicable in the case of both brick and mortar casinos as well as online decisions. In online casinos, the major workforce is dedicated to the website, its protection and safety. A large number of coders are required to maintain a strong firewall so that the money invested in these websites are not hacked and taken away by hackers. Brick and mortar casinos require less skilled labour. A casino requires cleaning staff, room service staff, waiters etc. Even though these are widely considered blue-collar jobs, there are other jobs as well such as cooks, dealers, cashiers etc. However, even the blue-collar jobs in casinos provide greater salaries than other similar jobs because the income is very high, but the work is a little harder as well.

A casino

  1. Development of General Economy: The introduction of a casino into a region drastically changes its economic state. The per capita income of people increases with the number of jobs offered by casinos. This, in turn, increases the purchasing power of the people and hence generates more liquid cash in the economy. Hence the economy around the place as well as the total economy of the state; and therefore, the overall GDP of the state increases. It has been found that countries that promote gambling in casinos have faster GDP growth than those that do not promote them.
  2. Taxes: Casinos generally generate more revenue for the government than other businesses. This is because unlike other businesses, casinos are seen as a luxury by most governments, and they are not wrong. Therefore this tax money can be used by the government to provide people with better civic amenities and for the general upliftment of the region.
  3. Additional businesses: Apart from gambling, casinos also provide scope for other businesses in the same region full stop for example restaurants, hotels, inns, rental shops, etc. all benefit from the introduction of casinos in the region.

 

Conclusion

Therefore it is clear that casinos do generate revenue for the economy as well as prove good for the community in certain ways. However, the problems relating to a Casino are also not to be shunned and therefore must be taken into account while constructing it. Casinos should mostly be constructed in places with less criminal activity so that they may not be taken over by gangsters, thugs etc. Show the construction of casinos should be undertaken with great care an understanding of the place where it is to be constructed.

 

The Ultimate Guide to Gambling Tax Rates around the World

It is no brainer that gambling is a form of recreation in most countries around the world, which is also a constant source of revenue that builds up the counties economy. How does it do this? Of course, by waging taxes on the casino establishments or on winning individuals. What was once a recreational activity for many years has diverted its path in becoming a billion-dollar industry now!

Hundreds of countries around the world have legalized gambling(Must Watch), and some are on the verge of doing so. There is no standard law which governs the taxes waged on the casinos, common for all. They are handled differently not only in different countries but also differ among sates of the same country. This could be quite intimidating, especially if you’re a traveller or a professional gambler. Sometimes casino owners pay directly to the taxman or the government, and on the flip side, some countries demand a percentage of an individual’s winning in the form of tax. Other countries demand a cut only if you’re a professional or if it’s your primary source of income. Let us discuss some of the countries that impose highest to the lowest taxes in the world:

lowest taxes

Counties with the highest tax on gambling

  • Germany: The county contributes to about 20-80% of the gross gaming revenue from land-based casinos and 18% VAT from its online counterparts. Sports betting like horse racing contribute to about 5%of the states and lotteries contribute a whopping 16%.
  • UK: Because the UK falls under the umbrella of one of the most top gaming countries, it is comparatively liberal in terms of their taxes. Depending upon the GGY of the land-based casinos, it can vary anywhere from 15% to 50% and 21% from its online counterparts.
  • Macau: This city is the only hope for gambling lovers in China and around; hence they impose lumpsum taxes on gambling with 40% from land-based casinos, of which 1.6% is contributed to the Macau Foundation and 2.5% for socio-economic causes.

Countries with the lowest tax on gambling

  • Italy: The country has made some modifications to their tax percentages from 2018 by increasing it on the land-based venues. It has been elevated from 20 to 24% and its online counterparts from 18 to 20%. This growth is still reasonable, considering the industries popularity in the country.
  • Singapore: The country is still a newbie in the game of casinos, and hence most of their gambling revenue stems from the Marina Bay Sands and the Resorts World Sentosa. The owners either have to deposit $100,000 with five %GGR or 15% of the GGR for all other players.
  • Portugal: Recent upgrade in the tax system from 18% to 25% has become an intimidating topic in the country. With lottery winners owing to 20% of their winnings.

Countries with no tax on gambling winnings

gambling winnings

  • Finland: Gambling operators are demanded to pay 10% of the lottery winnings and 30% of their gross gaming revenue to the government.
  • Czech Republic: As of 2016, operators were compelled to pay 20% of their gambling revenue, but increased it to a good 35% in 2017, of which casinos pay 19% of corporate tax as well.

 

How Casinos Use Math To Make Money While You Play Slots

Slot machines have come a long way from being just a woman’s game. Today slot machines earn casinos more than 80% of their revenue. So how do slot machines generate so much revenue for casinos?

People put a lot of money into slot machines. In the beginning, slot machines were considered a timepass for women because it was not considered a big win situation. However, over the years with the introduction of video slots and much higher odds, slots became quite popular among men as well.

big win situation

Modern slot machines are quite simple to understand and play. They involve the player inserting money, deciding on the bet, spinning the wheel and hoping for the best. There are several types of slot machines, some having physical reels and levers that you can pull or video slots that have virtual reels and levers. Either way, the work in similar ways and the games are totally played by chance. Video book is slightly different where the players are supposed to know a little bit about poker before playing it.

The algorithm of the slot machine is the main reason why it generates so much revenue. If you have five reels and each has five symbols, the chance of getting a jackpot is one in one hundred and twenty-five. However, most slot machines have at least ten symbols, and it multiplies the chance of not getting the jackpot exponentially.

So if it is basic probability, is it possible to get an edge over the casino by learning it? Actually, not really. This is because each slot machine has its own set house edge. And this makes it difficult to determine if the slot machine you are playing on has a house edge of 5 or 45 per cent. The odds are calculated by a computer and therefore will always favour the casino.

playing

Maybe if you win in the first round itself, you may have the edge over the house. However, if you continue playing, the house edge will catch up to you, and you will find yourself losing more than you put in.

Conclusion

Another reason why slot machines generate so much revenue is because of the opaque odds of the game. This is why the math works so perfectly, as a person playing this does not know what the house edge is and therefore continues playing. So be careful while playing the slots because even if you get lucky, in the long-run, the casino becomes luckier.

 

Financial Impact Of Gambling At New Casinos

Casinos have been part and parcel of urban life for a long time. So it comes as no surprise that they have deep-rooted financial impacts in the economy by both online as well as brick-and-mortar casinos. There are a lot of casinos in different parts of the world, and studying their revenue and social impact, it is possible to deduce both positive and negative effects due to their existence and operation.

Positive Impacts of Gambling At New Casinos

  1. Job Creation: A brick and mortar casino, once established, offers a large number of jobs, especially blue-collar ones. Casinos usually come with a minimum of 4-star rating, so it needs cashiers, waiters, cleaners, maybe even masseurs. Even in online Casinos, a large number of coders are required to maintain the confidentiality and security of the website and to maintain a robust firewall to protect against piracy and possible money laundering. So a large number of jobs are created due to casinos.
  2. Economic Development: With an increase in jobs, the per capita income of each individual increases. This increases the purchasing power of people in the economy, and a higher percentage of per capita income. This ultimately leads to positive economic development and betterment of the state’s financial situation.
  3. Taxpayer Benefit: Casinos are considered a luxury asset by governments. Therefore, they are taxed higher than other people, and hence the income to the government is much more significant. This tax money can be used by the government to provide a better lifestyle to the people in the state.

Positive Impacts

Negative Impacts of Gambling at New Casinos

  1. Socio-Economic Costs: Even though there have only been a few reported, the general public’s reaction to a new casino in town is mostly unwelcoming. They tend to believe that crime rate alcohol and drug abuse and other criminal activity might be increased due to the introduction of a casino. Even though this is because of widespread propaganda and movies, it cannot be overlooked. It may increase the general socio-economic cost, including the people’s discomfort, and in that way the real cost as well.
  2. A Decrease in State Lottery Sales: State lotteries contribute a lot to the government. With the increased number of casinos, this tends to decrease because casinos offer a large number of gambling options with much higher stakes and a much bigger payout than state lotteries. This means that the state has a decrease in revenue due to casinos.
  3. Increased Use of Public Services: Anyone who has been to a casino knows how much electricity is required to run it, and one which runs for 24 hours a day, seven days a week. The water required is also imaginable because of the sheer number of people who come and go all day and all night. Other public services like the police are also required because there may be law enforcement issues in places like these.

Positive Effects of the Gambling Industry

The gambling industry is often portrayed as a harmful and addictive source of entertainment, where people burn holes in their pockets. But what majority of the population do fail to realize that it has more to offer than just negativity. Here are some positive effects of the gambling industry:

Economic growth

The economy of casino-based counties like the US, Germany and many more have seen a drastic growth in the overall monetary matters. All thanks to the gambling industry that has been an active supporter. This is the reason why most of the countries, including Japan and China, are setting foot on legalizing gambling. In addition to economic growth, they also provide employment opportunities. According to a study conducted in 2005, there were 600,000 new job opportunities in the casinos. Drastic economy boost has injected a lot of counties to indulge gambling in casinos or race betting like Japan.

 

Entertainment

Apart from the fact that it is a form of recreation, it is also a form of entertainment for all classes of society. Adults can unwind after a hectic and busy schedule of working for long hours, and the teens can enjoy themselves some fun party night with a responsible amount of alcohol. Sometimes casinos are also built-in resorts, which opens a whole new world to explore and spend the weekend. This is an excellent way to spend time with your family and loved ones.

Tourism

Most casino establishments around the world often collaborate with wellness centres, hotels, resorts, complexes and many more. This not only attracts non-gamblers but also persuades gamblers to explore the shopping world. Casinos, especially in newly established places like Singapore, are mainly along beaches and resorts. Cities like Macau and Las Vegas are called the gambling capital not only for their casino establishments but also for the ambience and surroundings, attracting a lot of tourists. This increase the popularity and social stature of the country.

Sports betting

Sports betting

Although it doesn’t wholly hold its place under the gambling umbrella, it can be considered because it involves playing for money. Sports betting in countries like Japan, where casinos are not a legalized concept, can not only boost the country’s economy but also encourage the act of involving in sports. The increase in the popularity of sports betting has thrown light on a lot of games like boat racing, motorcycle racing, soccer and many more. The popularity has increased so much that people all over the world wait for sports events to take place and witness them.

Taxation

The establishment of a casino literally comes with a cost, i.e., they have to pay taxes to the government. These laws can differ from one state to another or one country to another. In some countries, individuals winning vast amounts of money at the casino should pay a share to the government. Adding to this, many casinos around the world are also actively involved in charities and donations, to increase the wellbeing and people’s standard of living.

Economic and Social Impact of Introducing Casino Gambling

The technological advancements in the fast-moving world have given birth to a new set of the population that considers gambling in casinos as a recreational activity. Although the introduction of casino gambling has created a confirmable rise in a country’s economy, its impacts on society are still a topic of discussion. Let’s see how casino gambling has impacted the social and economic aspect of a country.

Impact on the Economy

Impact on the Economy

Employment wages, tax, government bodies and many more factors fall under the umbrella of a counties economy. In 2013, Witt Brooke and Buckley rightly designated that the economic impacts can be divided into three main sectors

  • Direct effect: Where only the immediate industries and their wages are affected.
  • Indirect effect: This can be related to other sectors as well
  • Induced effect: Relates to the changes made in household income.

Under all the three concerns, the introduction of casinos for gambling has been nothing but a boon to the economic growth of a country.

  • It is a form of entertainment and a source of amusement for the locals, which obviously increase the revenue of the industry.
  • The increasing demand for casinos all over the world has created better employment opportunities.
  • A study conducted by the AGA in 2006 indicates that 67% of the population agreed that gambling was a pleasant way to generate revenue, without having to impose on raising taxes. The study also mentioned that around 67% of the casinos worldwide are an aid in the economic growth of other industries.
  • Another study conducted on the economy of the US casinos in 2005, indicated that the industry generates revenue of $22.6 billion and has created potential job opportunities for around 600,000 people.

Social Impacts

Unlike the economic impacts that have shown clear signs of positivity to the growth of the gambling industry, its impact on society is not all that pleasant. The reason behind this could be unattended debts, divorce, suicides and many other factors, which causes distress, especially in gambling addicts.

 

  • A crime based study conducted in the USA between 1977 and 1996 reported a sharp rise in the crime rate (8%) after the legalization of casinos, compared to other countries that did not indulge in the gambling business.
  • Recently, there has been a study that sees a correlation between drunk driving (leading to accidents) and casino gambling. A drink or two is inevitable in places like casinos. This causes irresponsible driving leading to accidents
  • However, a study conducted by McGowan in 2013, indicates that the rate of brutal accidents due to drunk driving is higher in rural areas than when compared to the urban ones.
  • Apart from the negative impacts, there is also upside to society. It is a form of recreation and a time killer for a few. Like mentioned above, casinos provide job prospects that can increase the total well-being of their citizens and attract many more tourists. This could also raise the standard of living.

Conclusion

Casino gambling has both upsides and downsides to it, in terms of economy and social structure. However, responsible gambling can lead to a healthier and more sophisticated form of recreation whilst contributing to the country’s economic and social growth.

 

Benefits of Legalized Gambling

Legal Gambling has been a hot topic in many countries like Japan that are still speculating and scrutinizing the situations. However, most parts of countries like the US have already legalized Gambling and are enjoying their freedom. There are a lot of benefits to Gambling than you can imagine. Let’s look at them one-by-one:

Criminal mindset

Let’s face it, if the industry is legalized or not, people who are indulged in the activity would gamble away anyway. If not on the land-based casinos, there are many websites online that welcome these proactive gamblers with open arms. They can be professional gamblers or even a layman who’s in search of some recreation to kill time and money. Instead of injecting a sense of criminal behaviour in them, while they’re breaking the law, it is always better to legalize the act. It is a remunerative situation for both the country and the gamblers.

Economy

Legalizing Gambling means to issue the licence and other documents to the establishments and also their online counterparts. Doing so will compel the owners to pay taxes and follow the etiquette of the city. This can not only increase the country’s revenue but also throw light on building international relations and opportunities.

Job opportunities

Job opportunities

Legalization of Gambling, both online and offline, will create potential job prospects to many educated unemployed citizens. Brick and Mortar based casinos require human resources to function- bartenders, dealers, servers, shopkeepers, chefs and the list keeps building. Opening of online gambling sites will need skilled engineers, graphic designers, programmers and many other tech-savvy individuals. With time, you can also indulge in welcoming players from different parts of the world that would increase the countries popularity and respect.

Charity

The money made from these casinos, where ‘ house always wins’, some part of it is even contributed to orphanages and other charity business to improve the societies wellbeing and increase the standards of living. Canada has legalized gambling 25years ago, and the country is still an active part of many charitable organizations, helping the poor and needy.

Statistics and data

Statistics and data

Legalization of Gambling will allow the government and its agencies to study the nature of the games played and the mindset of the people. For example, if a more significant percentage of shares were invested in betting on sports, then the government would take measures to increase and grant permissions for activities related to that. The same scenario goes with charity and events.

Conclusion

It is imperative for the government and its officials to bear in mind that casinos are not just destinations to wager money, but also a common place for food and drinks. Some casinos in South Africa, built amidst bushes and forests, also provide holiday packages and a private safari. Hence, legalization of Gambling(Watch It) can be a boon to the individual as well as government and its organizations, but necessary means should be taken to gamble in limits and safer, more secure environments.

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