VIE 29 DE MARZO DE 2024 - 08:51hs.
Fabián Bataglia
OPINION-FABIAN BATAGLIA, GAMING SPECIALIZED JOURNALIST

Economic impacts of the casinos industry

While the projects for the legalization of the gaming sector in Brazil are patiently waiting that legislators make a decision, the time is passing and it seems that a subject that, in reality, is quite transparent comes to light. The casino industry, considered a threat to the destruction of society by opponents and the saving of cities by those who support it, is no more than an economic activity and ready to take action, create jobs and pay taxes.

Economic impacts of the casinos industry

In recent years, various reports have described the impact of the gaming industry on the local economy of the regions where they operate. Economic science theorists assert that the factors related to having the industry in operation directly affect the use of services, the production of employment, and tax revenues. In the same way, they point out that some immediate negative impacts may occur in the matter of, for example, changes in values in properties and saturation of some services. However, these negative factors will be offset by other long-term positive ones, such as larger contributions to tax revenues.

One of the questions we must ask ourselves is whether the operation of a casino is more like a factory or a restaurant. This type of comparison refers to whether the industry can generate income from the foreign market in a way that stimulates economic growth, or if it is a business that primarily involves locals and only circulates money within a limited community. The answer is neither easy nor unique, as experts agree that the economic prevalence of a casino will be given by the type of installation, not the characteristics inherent in the industry. In other words, the impact of a casino will be determined by where it is located and by the facilities and services it offers.

To better understand these concepts we can illustrate with some specific examples. Certain studies indicate that casinos located in small urban centers or gambling halls for the local population are attractive to people who reduce their spending on other goods to play at machines or tables and are considered as additional entertainment within the community.

That is, this is the effect of the restaurant, where the game room receives 100 percent of its income from the local population. However, this model is not eternal, since in general, although the casinos are intended for the local population, in the medium or long term they have become a point of reference for the neighboring populations that do not have these entertainment places near their homes.

On the other hand, the most important casinos by size and infrastructure are usually located in tourist areas or regions dedicated to industry, such as Las Vegas, Macau or even Singapore. In these cases, casinos are able to compete because their services, such as hotels, restaurants or shows, mean better comfort to tourists and because they expand entertainment options for various groups of visitors.

The analysis conducted in the casinos of these areas has resulted that the tax revenues that a gambling establishment can bring will be much bigger and thus the long-term benefits as well. However, one of the variables that must be taken into account for the equation to be a success is that the industry has a modern regulation to monitor and address any of the negative impacts, such as organized crime or pathological behavior of its users, that do not control will lead to problems that are difficult to solve and will fuel the flames of those who see industry as the worst of evils.

But one of the most obvious and important parts is the amount of genuine, direct and indirect jobs generated by the industry and especially when it comes to resorts or other complexes. Therefore, the authorities should conduct a thorough investigation and subsequent planning of the geographical areas where the gambling halls will be installed, because one of the most relevant issues for the industry to thrive is not to fall into market saturation.

Obviously, countries like Brazil still have little danger of market saturation, but it should be borne in mind that not all casino projects have given the expected results because bad planning can make a good project fail. Development plans must be sustainable, areas and the public should be well-defined to promote local economic development and generate growth opportunities for other business activities.

Most studies agree that the benefits generated by casinos are more visible in areas far from large cities, where they generate more commercial development. In a previous article we noted that in a rural area of Paraguay, as a result of the installation of a casino hotel and commercial stores, it was possible to grow in infrastructure and services only thanks to the Brazilian visitors who crossed the border to play.

Also other studies explain that the installation of casinos and resorts in vacation areas generally produce positive environmental results because it is part of the business that companies always include the protection of green spaces and natural resources as well as the preservation of historic buildings and cultural heritage, improvement of public transportation, progress in electricity and communication networks, among others.

The establishment of casinos in Atlantic City, New Jersey, has led to the growth of tourism industries, convention facilities, key infrastructures and greater capacity to host tourists. It is not unreasonable to think that some areas of Brazil can obtain these and other benefits because the authorities have at their disposal all the tools to develop the most modern standards for stable economic development and to safeguard any negative impact on the most vulnerable sectors.


FABIAN BATAGLIA

Fabián Bataglia. Journalist specializing in the gambling industry; graduated in Social Communication at the CAECE University of Buenos Aires and professor of Journalism and Communication at this university. Specialist in information production and digital communication; currently works in Diario del Juego of Buenos Aires, Argentina.