The Costs Of Gambling To The Local Economy

The Costs Of Gambling To The Local Economy

Gambling in the Seychelles used to be what a few unscrupulous people did in the back streets and dark alleys of the areas they inhabited. Today gambling fever now seems to affect nearly everyone as the SPPF-led government has officially taken over the activity, legalizing various forms of it as a political financing vehicle. Gambling licenses are given only to people with well-known allegiances to the SPPF. In granting these licenses, numerous concessions and tax-free benefits are given to the establishment proprietors.

Gambling comes in many forms. Within the country the most popular type of gambling is the government para-statal “Inter-Lotto” lottery. This includes various lottery games and scratch-off ticket games.

Another type of gambling is those of casinos. Gambling in these venues would include jackpot slot machines, video card game machines, various casino card games such as poker and blackjack, and other casino games such as roulette.

A third type of gambling is Sports betting, commonly known as the “football pools”. This is where someone can bet on the outcome of a UK football match. The bets are placed on a bookmaker’s odds so that the actual bet is against the point spread. Sports betting also include illegal office pools and even punters who bet rupees or drinks based upon the outcome of a football match.

Convenience gambling (also called retail gambling) includes stand-alone slot machines, video poker, video keno, and other games. These are usually found in bars, snack shops, and some convenience stores.

Thirty years ago in the Seychelles, gambling was an extremely and relatively rare phenomenon. There were no casinos and only the football pools and the illegal backstreet operations were in existence. Today, legalized gambling has been permitted in the country. More Seychellois are gambling than ever before, and they are also gambling more money.

The momentum seems to be on the side of those who see gambling as a way to illegally supplement political party revenues. But these people ruthlessly ignore the costs that are associated with legalized gambling.

Bad Social Policy

Legalized gambling is bad social policy. Given the current cost of living in the Seychelles, coupled with youth unemployment and other societal-related disabilities e.g. single mothers, alcohol and drug abuse, all make it easier to develop gambling addictions. In such a scenario government-sponsorship of gambling makes it harder, not easier, for the compulsive gambler to reform. With such wide exposure to gambling we should be especially concerned about the message such a policy sends to young people.

The economic costs that gamblers themselves incur are significant. The average compulsive gambler is usually debt ridden. This situation pales in comparison with other social costs that surface because of family neglect, embezzlement, theft, and involvement in criminal activities. Compulsive gamblers affect the lives of family, friends, and business associates. Some of the consequences of gambling are marital disharmony, divorce, child abuse, substance abuse, and suicide attempts.

Proponents may argue that state lotteries are an effective way to raise revenues painlessly. But the evidence from other countries shows that legalized gambling often hurts those who are poor and disadvantaged. A national task force on gambling in the USA found that those in the lowest income bracket lost more than three times as much money to gambling (as a percentage of income) as those at the wealthiest end of the spectrum. One New York lottery agent reports that “seventy percent of those who buy my tickets are poor, black, or Hispanic.” And a National Bureau of Economic Research “shows that the poor bet a much larger share of their income.” The study also found that “the less education a person has, the more likely he is to play the lottery.”

Studies also indicate that gambling increases when economic times are uncertain and people are concerned about their future. Joseph Dunn, director of the National Council on Compulsive Gambling, says, “People who are worried about the factory closing take a chance on making it big. Once they win anything, they’re hooked.”

The social impact of gambling is often hidden from the citizens who decide to legalize gambling. One study in The Journal of Social Issues found that as gambling increases, there is an increase in “(a) proportion of divorce and separation; (b) disagreement about money matters with one’s spouse; (c) lack of understanding between marital partners; and (d) more reported problems among children of gamblers.”

Psychologist Julian Taber warns, “No one knows the social costs of gambling or how many players will become addicted . . . the states are experimenting with the minds of the people on a massive scale.” Families are torn apart by strife, divorce, and bankruptcy. Boydon Cole and Sidney Margolius in their book, when you gamble—You Risk More Than Your Money, conclude, “There is no doubt of the destructive effect of gambling on the family life. The corrosive effects of gambling attack both the white-collar and blue-collar families with equal vigor.”

Bad Governmental Policy

Legalized gambling is also bad governmental policy. Government should promote public virtue, not seduce its citizens to gamble in state-sponsored vice. Government is supposed to be servant of God according to Romans 13, but its moral stance is compromised when it enters into a gambling enterprise.

Citizens would be outraged if their state government began enticing its citizens to engage in potentially destructive behavior (such as taking drugs). But those same citizens see no contradiction when government legalizes and even promotes gambling. Instead of being a positive moral force in society, government contributes to the corruption of society.

State lotteries and gambling games are essentially a “rip-off” and widespread legalization of gambling is one of the worst changes in public policy to have occurred in recent years. . . . The viciousness of the state-run games is compounded beyond belief by the fact that state government’s media actively advertise and promote the games and winners.

One of the standard clichés used by proponents of legalized gambling is that by instituting legal gambling, illegal gambling will be driven out. This argument makes a number of faulty assumptions. First, it assumes that people are going to gamble anyway; and so the state might as well get a piece of the action. Second, it assumes that given the choice, people would rather gamble in a state-sponsored program because it will be regulated. The state will make sure that the program is fair and that each participant has an equal chance of winning. Third, it assumes that if the state enters the gambling arena, it will drive out illegal gambling because it will be a more efficient competitor for gamblers’ dollars.

While the arguments seem sound, they are not. Although some people do gamble illegally, most citizens do not. Legalized gambling entices people to gamble who normally would not gamble at all. Duke University researchers have found that the lottery is a “powerful recruiting device” because one-fourth of those who otherwise would not gamble at all do bet on lotteries.

Legal gambling does not drive out illegal gambling. If anything, just the opposite is true. As legalized gambling comes into the country, it provides additional momentum for illegal gambling. People are living with a mind-set that gambling has official sanction – this extends to card games, dominoes etc. etc. Another important issue is the corrupting influence legalized gambling can have on society. First, legalized gambling can have a very corrupting influence on the government. In the last few years there have been numerous allegations of corruption and fraud in some lotteries and at the amusement centers. Second, there is the corrupting influence on the citizens themselves. Gambling breeds greed. The number of compulsive gamblers increases when legalized gambling is brought into an area. Every month end, State pensioners who are otherwise sane people bet large amounts of money in the lotteries and at the amusement centre because they hope they will win the jackpot. Moreover, these various gambling establishments produce tempting adverts, happy hours etc. etc. that appeal to people’s greed in order to entice them to risk even more than they can afford. The Government should be promoting positive social values like thrift and integrity rather than negative ones like greed and avarice. They should be promoting the public welfare rather than seducing citizens to engage in state-sponsored vice.

NATIONAL Economic Costs

Gambling adversely affects the country’s economy. Legalized gambling depresses businesses because it diverts money that could have been spent in the capital economy into gambling that does not stimulate the economy. Stories abound in Seychelles of businesses gone bankrupt because of gambling, but, the effect on the entire economy is even more devastating than may be at first apparent. Money that could be invested, loaned, and recycled through the economy is instead risked in a legalized gambling scheme. Legalized gambling draws off a lot of money from the economy. Food for thought for President Michel.

(contributed)