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A lot of money goes into floating the gambling industry. As a capital-intensive sector, a major factor for convincing investors and regulatory bodies to key into the industry is its propensity for economic growth. In the past decade, gambling has contributed billions of dollars to the global economy through taxes, job creation, and tourism.

With the adoption of internet technology in the gambling world, more emphasis is now placed on consumer safety. To this end, organizations like SlotsJudge conduct reviews of new slot games and allow players to try out demo games before risking their funds. The gambling industry has taken shape in recent years, with more countries choosing safe regulation over outright banning. Our author Ella Houghton looks at the gambling industry’s impact on the economy.

What Does Gambling Contribute To The Economy?

Conversations about gambling are usually centered on its compulsive and negative effects. However, little to nothing of its potential economic benefits was said in the public domain until countries explored legalization. 

1. Employment: The gaming industry isn’t only capital intensive but also a huge employer of labor. While physical casinos lead the way in gambling revenue, the rise in online gambling has increased the number of employees in the industry. These include skilled workers such as accountants, data analysts, tax experts, and IT staff. Data from the American Gaming Association indicates the industry currently employs more than 700,000 people across the country. Job creation and employment are also factors that regulatory agencies consider when issuing gaming licenses to operators. 

2. Taxes: One of the major ties between gambling and the economy is taxes. Gambling houses and institutions pay taxes on their annual revenue, which varies from country to country. In Nevada, casinos and other popular gambling institutions pay a flat rate of 18% in taxes. Revenue from tax collection is a major boost for the government as it generates funds that can be used to improve other sectors of the economy. A report by the global accounting firm Ernst & Young in partnership with the UK’s Betting and Gaming Council estimates the industry’s 2019 tax figures at £3.2billion. The American Gaming Association also projects $40 billion in national tax revenues.

3. Corporate Social Responsibility: Corporations worldwide generally seek to reduce their tax obligations by undertaking community-centered programs. Such programs are usually prescribed by the country’s gambling regulations and include funding problem gambling support groups and climate change. Additionally, companies may engage in sensitization drives to meet CSR commitments. Aside from tax reliefs, a key incentive for CSR programs is increased brand awareness for the companies involved. Gambling companies may also be required to issue annual CSR reports as proof of compliance. 

4. Tourism and Retail: Although much of gambling today is done online, gambling tourism remains a thing. Countries and states which are seen as gaming hotspots due to early legalization continue to draw tons of tourists annually. These tourists not only want to visit the ancestral gambling sites, but they also want to wager and consequently patronize local businesses. This brings in more money for retailers and local stores located around gambling sites. Gambling tourism has also caused companies to partner with restaurants and shops via leases and space rentals for a symbiotic relationship.

Other beneficial effects of gambling include secondary economic benefits on local goods and services providers as casino employees and visitors spend winnings and wages on essential needs. There is also the infrastructural rainfall that comes with gambling such as hotels, diners, and tourist-centered locations.

Gambling in 2023: What to Expect?

The economic effect of gambling on society is projected to skyrocket in the coming years. Evidence of this can be seen in the United States of America, where its multiplier effect has created over 1.8 million jobs across hospitality, regulatory compliance, and other related areas. Interestingly, this beats the employment figures in the sound recording and plastic manufacturing industries.

More countries are likely to relax gambling bans to enable them to tap into the immense revenue it brings. Given the economic downturn occasioned by the pandemic, many governments will be looking for ways to increase job creation and generate more revenue.