Land-based Casinos Generate About US$126 Billion Worldwide

According to estimates by Global Betting and Gaming Consultants gambling, in general, generates approximately US$1.4 trillion worldwide with Japan and the United States emerging as the two largest industry players, for US$488 billion and US$439 billion respectively. Within a global context, land-casino gaming represents the largest component of commercial gambling, growing at an annual rate of 7.8 per cent per annum, with the US and Europe generating some 80 per cent (US$91 billion) of all activities emanating from the industry. By 2010 projected casino revenue in the US is expected to be in excess of US$60 billion.

Casino gaming has been legal from the 1930s in Nevada where gross gaming revenue – the net amount of money won by from all customers – was US$540 million in 1970 but, by 2006, had grown to more than US$25 billion. The economic success of casino gambling is reflected in the rapid growth of Nevada, which was among the three fastest growing states in the US for each of the last four decades of the 20th century. This is reflective of an activity that is growing in popularity but has long been condemned or, at least, frowned upon as being a waste of time and resources, or a potential cancer on the social fabric of society.

Regulatory regimes

Generally, in the US a wide range of regulatory regimes has been used in granting casino licences. In other countries such as Canada, Holland, Austria and the Philippines, outright state ownership of casino operations is the preferred option. This mode of ownership is often influenced by political considerations, and the entity is subjected to the same inefficiencies that are normally associated with state-run enterprises. In contrast, the governments of Malaysia and Macau granted exclusive monopoly casino franchises to private operators without going through a bidding or legislative process.

Within the Caribbean, Antigua and Barbuda was one of the first jurisdictions to grant licences for the operations of interactive gaming and wagering institutions, which are subjected to the Anti-Money Laundering Act. The licensing and regulation of these companies are supervised by the Financial Services Regulatory Commission’s Division of Gaming. Costa Rica, because of its dependable infrastructure, paucity of online gaming and Internet regulations, is viewed as the leader in online casinos and poker rooms. Companies incorporated under the laws of Costa Rica can operate an online gaming business under a data processing licence. It is important to note, however, that currently there are laws that control land-based gambling. Casinos operating in the Bahamas are subjected to a comprehensive set of laws and regulations, ranging from the Lotteries and Gaming Act to the Suspicious Transactions and Anti-money Laundering Guidelines for Licensed Casino Operators. Interested casino operators are required to obtain a letter of consent from the Hotel Corporation of The Bahamas and then submit a request to the Gaming Board for a gaming licence.

Studies on casino gambling

There are few studies that speak to the economic impact of casino gambling, but most rely on an oral or philosophical argument about the economic effects of casinos. Those studies that attempted to quantify the economic impact focused primarily on the estimation of employment, and the generation of gaming and fiscal revenues. Those in the latter group relied on the use of either an input-output model or an econometric-modelling approach to estimate the impact of gaming activities. Both approaches attempted to determine the economic effects by assuming that casinos create new income, that is, they constitute an export activity that has a multiplier effect within the economy. The critics of casino gambling argued that unless it is an export activity, casinos will crowd out other businesses. The underlying assumption that casino activity must be export-oriented is important because the participation of locals, the critics argue, does not result in the injection of new money into the economy but represents the transfer of money that would have been spent by residents in other local businesses. The central idea is that unless gaming represents a source of new income, it will not deliver the anticipated development impact because it’s operation will eventually cannibalise other businesses in the area.

Other researchers disagreed with this position as, they argued, an economy can grow from gaming without being export oriented. To support his stance, one researcher cited, as examples, professional sports which do not produce a tangible export but do produce positive economic impact. Others suggested that positive impact can be achieved through internal trade and its attendant demand.