Gambling addicts more than a safe bet for casino operators
GAMBLING addicts make a huge difference to casino profits worldwide. Studies in the US and Canada show that problem gamblers account for between 30% and 40% of total gaming revenue, and up to 60% of machine revenue.
In the absence of tough enforcement, the incentive for operators to look the other way is irresistible.
Local casino operators defend their passive approach to problem gambling by pointing to their funding of the National Responsible Gambling Foundation, which receives 0.1% of their gross gaming revenue.
In 2014, that came to R23.3million. Although the foundation has won plaudits for its prevention and treatment programme, its counsellors and psychiatrists are largely confined to helping those who seek help.
The operators also trumpet their economic contributions, which are indeed significant: a National Gambling Board study found that the gambling sector directly added R11-billion to GDP in 2012, with an indirect GDP contribution of R21.9billion.
The study also estimated that 29 679 jobs had been directly created by the sector, and a further 136 523 jobs indirectly created, on the optimistic assumption that each gambling job sustains 4.6 jobs in other sectors.
But these rosy figures do not account for gamblers’ losses. South Africans bled R17.2billion in casinos in 2014, according to a PwC report — an average of R314 for every citizen. When averaged for gamblers only, the losses are much steeper: Industry insiders say that patrons of a major casino, many of whom are low earners, lose an average of nearly R3 000 a month.
Nor do the estimates factor in the spending that would move to other sectors if casinos were more tightly controlled.
In 2014, casinos paid 21.4% in taxes, or R3.7-billion, on the R17.2 billion they took from gamblers, plus a portion of the 28% corporate tax paid by the holding company.
But Professor Peter Collins, who was executive director of the gambling foundation from its launch in 2000 until 2012, says local casinos are undertaxed, given South Africa’s poverty crisis.
“Gambling tax is 39% in Macau. In Berlin it’s 92%. If you tell the Germans they’d get more tax if the rate was lower and more gambling happened, they’ll say that’s exactly what they don’t want.”