NATION NEWS
Casinos: economic and social costs
Published on: 6/25/08.

LEGALISED GAMING CARRIES THE ATTRACTION of a source of easy money. But the real question: is would casinos help or hurt the communities in which they are located? It is interesting to note that after 1910, gambling which before was riding its popularity, started to unveil its social costs resulting in most states in the United States passing laws to eliminate gambling. The ills surfacing at the time included increased taxes, loss of jobs, economic disruption of other businesses, increased crime, and large social-welfare costs for both society and government.

To date, the industry's promises of shared wealth are yet to materialise. It has been noticeable that both Nevada and New Jersey, states where gambling abounds, have a budget deficit. Similarly New York State, which introduced video lottery terminals, realised substantially lower revenues than budgeted. Some researchers hold the view that a casino is highly subsidised by the taxpayer both directly and indirectly. This is supported by the level of subsidies usually provided. These include infrastructure costs, high regulatory costs, social welfare costs and sometimes an expanded criminal justice system.

Still further, there are other costs which may not be apparent at first blush. Gambling interests have been known to curry favours with political and community leaders. In fact, in some states of the United States, campaign contributions from such sources are prohibited. There is the ever present concern that as gambling becomes more prevalent in a country, the greater the likelihood that the industry may dictate economic, social and tax policies.

It has been known that values of properties in close proximity to casinos have declined. Small businesses dry up and those that survive have difficulty in recruiting staff and usually have to pay premium wages. Often casinos have not produced the anticipated tax revenues with the result that communities have had to close the gap through additional taxation.

Yet another consideration must be the introduction of internet gambling. The industry is not immune to failure as has been evidenced by the rumours concerning certain high profile casinos in Atlantic City. Other worrying features are those of families experiencing financial difficulties if not collapse, increased divorces, and criminal charges and even, but regrettably, suicides.

Of all the stakeholders involved in casinos, there is one only sure winner and that is the shareholders. The industry is associated with increased per capita income in construction, hotel, accommodation and entertainment industries, but the corollary is decreased income for those working in local restaurants and bars. Positive impact is greatest in depressed communities, providing, as it does, a large number of entry-level jobs.

In keeping with other industries, it is felt that 80 per cent of gambling revenues come from ten per cent of the population who gamble most heavily. So far in Barbados, there is good reason to believe that the victims are those least able to afford losses. Next, we have losses to industry by way of sick days and extended lunch hours.

Yes, there are arguments on both sides. Which side is considered more desirable?