Friday, March 14, 2003

The pros and cons of casino gambling

The concept of casino gambling in Jamaica has been in a seesaw state for a while just like the possible war against Iraq. At times it seems imminent and another time it seems not in our best interest. This latest round of debate seems to be the most positive move this government has made towards its introduction. The question therefore arises, why does the government have an interest at this particular time? It seems as if this is nothing more than an attempt to close the budget deficit rather than a commitment to the idea of casino gambling, as a beneficial addition to the tourism product. I hope the study to be done will examine casino gambling not just as another revenue line but rather as a concept and weigh carefully the advantages and disadvantages to the long run economy. There are some valid arguments against and for casino gaming, which must be considered, lest in our rush to find revenue we may end up with an inferior product, incapable of withstanding our competition.

It would do well to examine some of the arguments for and against casino gaming.
Firstly, casino gambling is seen as an immoral issue. Gambling is seen as wrong. This is a very traditional view and is not shared by as many as before. Many people are waking up to the realization (including our tourism competitors) that casino gaming is merely entertainment, just as the many raffles and bingos carried on by many churches. Is there any difference between casino gaming and bingo “fund-raising” games. Both are games of chances and intended for entertainment. From a moral standpoint, if we can have lotteries, bingo, raffles and horseracing then what is wrong with casino gaming. In fact, my personal opinion is that it is better to raise funds through these means than stand on the road side and beg for money in the name of fund raising and charity, as at least there is some economic activity.

The second argument creates the distinction between casino gambling and other forms, which is crime. It is thought that casinos bring more corruption and crime than any other form of gambling. This perception derives from Hollywood, as persons have been exposed to mafia movies, where crime surrounds casinos. The reality, however, is that the crime came out of a time when it was illegal. Casinos flourish all over the USA and other countries now, even more than before, but there is no corresponding increase in crime. We suffer more violent crimes from politics than all the forms of gaming put together. Should we then ban politics? Are we not the fourth highest murder rate in the world without casinos? I don’t think “legalized” casino gaming will make much difference. In fact this is an argument for legalization, as it is easier to control a legal rather than an illegal operation. When something is illegal it tends to be accompanied by crime as there is no protection for the weak. Therefore, the best control is to legislate like anything else.

There is also the argument that legalization will geometrically expand gambling in Jamaica. There is a lot more illegal gambling than we think in Jamaica. The legalization of the drop pan game illustrates this and the problems Supreme Ventures and Jamaica Lottery Company faces with illegal games is evidence of this. People did not decide that to start playing drop pan when Supreme Ventures came. They were playing the illegal form long before. What legalizing casino gambling will do is bring more illegal money into the legal net. There are some establishments in Jamaica that could be called informal casinos, by the number of machines and even have live shows they have.

What is happening to us is that we have created a black market for gaming as we did with the US$ in the 80s. No legislation in the world can curb demand and supply. The US saw this with alcohol in the 50s and the world is seeing it with drugs. The more we legislate against and throw resources at it, the bigger it gets because the rewards are greater (Economics 101).

Increases in gambling are not driven by the legality but the economic climate. As income decreases, one is more liable to risk money on a chance to increase it tenfold. That is the opportunity gambling provides. I do agree that gambling creates addicts (pathological gambling) but isn’t this true of alcohol, cigarettes and even good causes such as charity. If a man spends all his time doing free work or even going to church, then sooner or later he will become a pauper. It is excess that creates the problem, not just casino gambling. In fact if it were legal then the extent of this problem could be more easily measured and controlled, as a portion of the proceeds could go towards addressing this problem. Currently, we have the problem, but as it is not reported on, it is okay.

There is no doubt that casino gambling (and all forms of gambling) has had a significant positive impact on many cities around the world. In Jamaica we see the benefits to sports, charity, education, culture and so on. Recently the US National Gambling Impact Study Commission (NGISC) tabled its final report. This can be found at The following are excerpts from the study, which speaks to the impact gambling has had on the US:
“..Today, all but two states have some form of legalized gambling…As gambling sites proliferate on the Internet and telephone gambling is legalized in more states, an increasingly large fraction of the public can place a bet without ever leaving home at all…Universally available, “round-the-clock” gambling may soon be a reality…the transformation of Las Vegas into family friendly theme resorts, in which gambling is but one of a menu of attractions, have become familiar backdrops to daily life…Many of the positive economic impacts are in fact easy to point to if not always to quantify: Sleepy backwaters have become metropolises almost overnight; skyscrapers rise on beaches at once-fading tourist areas; legions of employees testify to the hope and opportunities that the casinos have brought them and their families; some Indian nations have leapt from prolonged neglect and deprivation to sudden abundance. Gambling has not just made the desert bloom in Las Vegas but has made it the fastest growing city in the United States.”
In fact, we have missed out on a big opportunity in gaming, which is Internet Gaming. This is the fastest growing part of gaming today and we could have already earned millions of US$. The NGISC report states that Internet Gambling doubled from 1997 to 1998 with the number of gamblers increasing from 6.9 to 14.5 million and revenues from US$300M to US$651M. It also states that observers believe that the rapid growth will continue. In 1998, I prepared a report on Internet Gaming and learned that Antigua earned approximately US$7M in 3 years from licensing fees alone, not including the other spin offs to the economy. At that time the US was unsuccessfully fighting Internet Gambling and never had any significant convictions, as questions of jurisdiction arose. It was during this time that Antigua made a killing, as operators would set up base there, since it was illegal in the US. The players predicted that the US would conform, as it was fighting a losing battle, and so said so done.

The question in my mind is not whether we should introduce casino gaming but how to approach it. There is no doubt that it can bring significant benefits, but we must ensure that it is blended in properly with the tourism product and correctly controlled. As a matter of fact, I believe that casino gambling has more to fear from the crime we presently have than us fearing any crime from casino gambling.


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