Casino Industry Treated Differently from the Entertainment Industry

Posted by: on Aug 25, 2013 | No Comments

Yes, we have all heard the old bugbear of how gambling is bad for society. However, gambling is nothing but a common noun belonging to a larger family of more respectable relatives like ‘games of chance’, ‘betting’, and ‘probability.’ Yet, the protagonists of the protectionist view believe that the government has an obligation to regulate ‘immoral’ and addictive activities that can harm communities In order to protect citizens from social evils such as gambling. They go all out to minimize the number of casinos in a given place insisting that the more out-of-the-way it is, the better. They decide who may play and who may not and finally tax a sector that is actually part of the entertainment industry.


The fact of the matter is that there actually is no conclusive proof or empirical work that can directly connect the harmful effects of gambling on the moral standards of an individual or community. The industry is seen as exploitative of human weakness, when, in fact, most governments loath the idea of losing out on the money that they can get from the industry. To do this, they keep a tight hold on the twin reins of tax and regulation. In a recent survey on gambling economics (2011), Professor Grinols suggests that in the US, ‘even though a state may not want to support a gambling institution, it would be economically beneficial for them to do so. If they did not support the institution, there would be many repercussions.’

Casino No-No!

What politicians worry most about is their reputations. Proactive protection of community interest, media image and treading the line between revenue and not appearing irresponsible to their constituents are usually their top priorities. They also favor regulation because they fear that casinos might be used as money laundering operations. They are under the impression that if they liberalize the law, they will unleash an onslaught of problem gamblers. They also believe if they make gambling more expensive, they reduce the number of gamblers from weaker economic sections. The problem with this is that they automatically assume customers who do not have the money to gamble, will spend the money they would normally keep aside for necessities. This goes well with the abnormally high levels of taxation; special privilege taxes for what is essentially a recreation and entertainment industry.

Studies do show that gambling happens regardless of economic depression or boom and you can’t help but wonder what the fuss is all about. After all, public opinion has been known to be ambiguous and at times, mutually contradictory. Just as contradictory as the fact that prohibition usually results in a large illegal industry rearing its ugly head. Prohibition also increases crime on a scale that is far beyond the current worries about casinos being dens of vice frequented by criminals and involved in shady deals of all kinds, a perception that is to an extent fuelled by the big brother of all entertainment industry, Hollywood.

Government Much Ado

Let’s take a quick look at how casinos make money. They usually charge for services such as taking part in a game and they always charge or take a percentage of the money put on each and every game. Customers usually play odds that favor the house. Money lost at the games is used to pay for the casino’s operating cost and capital. Meanwhile, they also have to answer to the government on player restrictions, license their products, meet security and surveillance standards, maintain records for regulators, follow anti-money laundering procedures and discourage problem gamblers. They also have to deal with strict regulations on jurisdiction that can severely hamper profit-making. While people will come to gamble from other states, Professor Grinols’ study also found that gamblers will gamble, regardless of where. By forcing gamblers to seek out-of-state options, governments actually cheat themselves out of earning more from the industry.

While gambling can be potentially harmful, depriving people from their right to make their own conclusions is definitely not the right way to go. Most casinos are already acutely aware of their need to change public opinion and demonstrate the highest levels of integrity in their operations as a natural outcome of the overall sensitivity of the industry. Yet, the casino industry can, at best, hope for a tolerant attitude from governments.

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