Just like any other sector of economic activity, the gambling business does not exist in a vacuum. In order to function, it needs to interact with dozens of other services and industries; gambling companies hire and train employees, invest in infrastructure and social responsibility projects. But what is happening to the industries and business niches that go on par with gambling?
What Are the Associated Niches?
In the process of formation, any sector of the economy conducts an active commercial activity. New economic areas are developing especially actively after their legalization, and the gambling industry is not an exception. In addition to the direct royalties that legal gambling organizers use to fund the state budget, they also generate profits in other sectors of the economy by purchasing goods and services, renting premises and resorting other means of production. In such a way, they contribute to the development of different economy sectors.
Here are some of the niches that are majorly afected by the organizers of gambling today:
Consulting – Legislative regulation of gambling is quite strict, so it is not easy to go through the procedures for obtaining licenses and launching a business. This requires lawyers and business consultants, especially if a foreign company plans to obtain a license without experience in a particular jurisdiction;
Recruiting and training of personnel – The gambling market is rather new, so the search and training of personnel requires a lot of time and resources. Legal organizers are actively investing in HR and recruiting, which not only contributes to an increase in the number of formal jobs but also provides an opportunity to earn money for companies specializing in the search and hiring of personnel;
Rent and repair of premises – Casinos, slot machine halls, bookmakers invest tens of millions of dollars in renting and renovating hotel rooms to bring them in line with licensing requirements. Some organizers are even building new four- and five-star hotels in order to open gambling establishments there;
Purchase, certification, maintenance of gambling equipment – For example, one modern slot machine costs $15,000 – $20,000 on average. There are also the costs for its maintenance, software support, etc.;
Investment in IT – For online gambling operators, the main products are their online platforms and gambling applications, whose development, improvement, and maintenance require constant investments. Some companies rely on their own IT departments, while others resort to outsource developers. However, in both cases, they invest tens of millions of dollars in IT. It is especially true about premium-class casinos featured in Casinoluck.ca ratings;
Marketing, advertising, and PR – Legal gambling business is designed to give positive emotions. And one of the most effective tools for communicating their own mission and attracting clients for legal organizers are advertising and PR.
Nowadays, the gambling industry is one of the largest advertisers in both online and offline segments, along with FMCG goods and retail technology. In addition, socially responsible gambling advertising must comply with a number of rules, which is also associated with economic consequences for the gambling business.
Sponsorship contracts – Most of the legal gambling organizers, especially in the betting industry, sponsor sports events and teams;
Financing projects in the field of social responsibility and charity – Legal organizers of gambling actively invest in social responsibility projects and donate to charity. This makes it possible to better convey the real value of the gambling business to society and create a positive social effect outside the gambling sphere.
This is not a complete list of areas where the gambling business generates profit directly or indirectly. There is also the purchase of furniture, uniforms for employees, the cost of maintaining the infrastructure of gambling facilities, renting offices, transport services, etc. There are dozens of other areas where the gambling business acts as a customer and pays money. Obviously, gambling occupies its place the global economy ecosystem and contributes to its scaling.
What’s Happening in the Most Gambling Cities?
Analysts estimate global gambling revenues at $130 billion per year. The largest casinos in Las Vegas are capable of earning up to $14 billion in 2 months. At the same time, such organizations provide a lot of high-paying jobs. And this is how gambling affects the economies of the most famous cities where this type of activity is fully legalized.
#1 – Las Vegas
Las Vegas is a synonym for gambling. It is one of the most famous cities in the world that tourists from all over the world lead to to play their favorite casino games. Thus, more than 42 million tourists visit the city annually. Each of them spends an average of $540 on gambling and another $400 on other non-casino-related needs. In general, the city spends about $23.68 billion annually in casinos, and the total expenses of tourists in the city reach $40 billion.
The average salary of casino employees is over $50 thousand per year, and there are about 160,000 of them in the city. LA casinos and hotels pay about $1 billion in taxes annually. Casino winnings are also taxed.
#2 – Macau
Macau is called the world’s largest gambling center. It is now the only city in China where you can gamble legally. Macau has become a real tourist destination mainly for locals. Tourism brings about 45% of the city’s GDP, and the income from the gambling industry is $39.6 billion. This business employs about 65% of the city’s working-age population. Casinos bring about 78% of all local budget revenues or $14.3 billion annually.
#3 – Monaco
The city-state of Monaco is one of the smallest in Europe, but it is famous for its chic casinos. Interestingly, gambling is forbidden for those who reside in Monaco, but this rule does not apply to foreign tourists.
Each year, four casinos in Monaco earn about 210 million euros, employing more than 1,300 residents of the city. The share of the gambling sector in the country’s economy is rather small (slightly more than 7% of GDP), but casinos attract tourists from all over the world. Among casino visitors are the richest people, sportsmen, and other celebrities. Monaco is a low-tax territory, so only value added tax is paid there.
This article does not necessarily reflect the opinions of the editors or the management of EconoTimes