11 May, 2015
In Georgia, as well as in many countries where gambling is legal, there is a lot of talk about banning casinos. Arguments of the proponents of the ban: The casino impoverishes people, leads to addiction to the game, does not create real wealth. When it comes to banning something, we need to analyze not only what we are fighting for, but also what we are losing with the new regulations, and what long-term consequences we are getting.
Gambling can be addictive in some people. However, it must be said that the goal of many players is fun - they consciously pay money for it (obviously, if they leave money in the casino and do not win). When we talk about addiction, it should be noted that addiction is caused by many things: alcohol, coffee, bookmakers, internet and other products or services. For many people, trading on the stock exchange may not be qualitatively different from playing in a casino. In both cases, the citizens are gambling, taking risks and there are cases of bankruptcy. However, stock exchanges around the world are very good tools in the hands of the private sector to generate wealth and stimulate the economy, and banning them would have devastating consequences for the economy.
Every person has the right to dispose of his property as he pleases, to spend the income in whichever shop he wants, and to cut his hair with a beloved stylist. No one knows better than the owner the motives for his action, the expected benefits, costs, and alternatives.
In addition to moral counter-arguments, banning casinos also has an economic price. Casino is the same business as all the others. In 2013, the turnover of the gambling business in Georgia amounted to $ 1.2 billion, which is 4.5% of the 2013 GDP. In Canada, for example, casinos generate $ 16 billion a year (about as much as Georgia's total economy), 128,000 direct jobs and 250,000 indirect jobs (in other businesses). Gambling in Georgia, along with tourism, is one of the sectors that has shown sharp growth.
It is also noteworthy that more than 100 million GEL entered the state budget revenues from casino licensing and taxes, which was almost 1.5% of the revenues. By restricting casinos, a significant share of budget revenues may be lost. The job factor is also important. In 2013, gambling employed more than 5,000 people in Georgia, which is 0.3% of the total workforce. Banning gambling will increase unemployment, which is already high in Georgia (14.6%). In cities where casinos are located, the unemployment rate is even higher at 25.6%.
Jobs are being created not only in gambling establishments but also in related businesses such as hotels and restaurants. In most cases, casinos are built near or close to hotels, restaurants, shopping malls, tourist attractions. Casinos also have an economic impact on the media, as they spend quite a lot of money on advertising. All of this creates a close connection between the gambling business and other types of businesses: what hurts casinos, hurts many other businesses as well. In addition, similar types of organizations often engage in charitable activities.
An additional factor in the development of this sector in Georgia is the policy of neighboring countries: casinos are banned in Turkey and Iran. There are many legal and illegal restrictions in Russia and Azerbaijan, which lead to the influx of tourists from these regions, whose incentives, in addition to travel to Georgia, are also gambling. When foreign tourists come to play in the country, they pay for food, transportation, accommodation and shops: that is, many sectors of the economy are booming.
The profitability of the state of Georgia, in terms of gambling business, is also determined by the ratio of the population. The population of Turkey, Iran, Russia and Azerbaijan is over 300 million people, which is quite a large market in the tourism sector, for a country of 4.6 million. In recent years, before tightening approaches, the number of visitors and net cash flows from tourism have increased dramatically. The share of tourism in GDP exceeded 7%, which is more than 2 billion GEL. The country still has growth potential in this regard, but its use requires more liberalization and fewer restrictions. Tourists are attracted to countries that are as free as possible and not to countries where entertainment is restricted.
The ban on casinos will have other negative effects as well: Since the ban on this or that product or service does not eliminate the demand, the business will move underground. There will be places where illegal gambling will be done. This is an additional incentive for criminals and additional costs for the state, because the fight against crime is quite expensive for any country.
A similar result occurred in the United States in the 1920s, the so-called. In the "Prohibition Era", when, according to paternalistic arguments, most gambling, alcohol and many other consumer products or services were banned. Restrictions were lifted in whole or in part by the 1930s, as the country was no longer in luxury due to the Great Depression, struggling in vain with the underground business and refusing additional means of generating wealth.
It should also be noted that technological progress makes banning casinos even more ineffective. There are many online casinos in the world where anyone can enter and play. At this time, money is only flowing out of the country, as online casinos are mainly registered in countries where this or that government has less control. The solution may be to impose Internet censorship, which is always a difficult and painful process for the country. This path creates a lot of additional problems and does not solve the old problem: if the restrictions are not too wide, the Internet user will always find an online casino that is not yet blocked. It is hard to imagine how people would be held accountable for playing poker or other gambling online with their own money.
To summarize: Proponents of the ban exist in all countries where gambling is legal, although all moral or economic arguments for the ban have strong counter-arguments. Casinos create wealth, creating jobs - both direct and indirect - in other sectors such as hotels, restaurants and other tourist destinations. This facilitates the functioning of the economy as a whole. Banning gambling brings a lot of costs to both the public and the government. The ban will shift businesses to the illegal sector, where criminals will dominate and provide an additional source of income. This will increase crime while pushing the government to create new agencies and regulations, which will require additional funding. Overall, these processes will affect the economic and social situation of each citizen.