Beyond the Poker Face: Growth in the Gambling Industry

The gambling industry has always been the subject of fierce political debate. This is the case in nations throughout the Caribbean, the Americas and around the world. Opinions will differ over which side has the winning argument but, with a predicted yield in 2019 of US$ 495bn, and a projected value of $525bn by 2023, nobody can dispute the colossal financial aspect.

Between the back and forth, research has been done on the gambling industry — its economic pros and social cons, and its impact, for better or worse, on the community. With the gambling industry set to expand, in Saint Lucia via the Pearl of the Caribbean project, and further abroad via other new casinos and online gambling, it’s a fitting time to go beyond the day-to-day of the debate and look in-depth at the industry 

Putting your Cards on the Table

Whether you love or loathe the existence of the industry in the region, the wider debate surrounding it usually falls along one of two lines. On one side there is the argument that the introduction of a new gambling venue, like a casino, can create many jobs in a local community. On the other side, it can be countered that a new venue may also give rise to social problems like increased gambling addiction, crimes such as prostitution, and questionable economic benefits due to the often unusual taxation structures. 

Advocates point to the immense economic benefits that can be brought to a community in terms of service and entertainment jobs. Critics accuse proponents of the industry of ‘hollowing out’ the community by introducing a commercial operation that sees local economic benefits offset by the need for new social support programmes.

The History of the Gambling Industry in the Caribbean

The Caribbean will always be a locale that entices visitors from all walks of life. Just as it is a dream domain for holidaymakers, sailors, athletes and adventurers, so too is its reputation as an entertainment epicentre well established. But, as with any region that holds such a history, organised crime has made its presence felt here throughout the decades.

The story of the American mafia’s link with the casinos in pre-Castro Cuba is infamous and has been the subject of numerous retellings, including the Hollywood classic The Godfather II. But while this era may be the most famous, the years since have seen the sagas of the Sicilian Cuntrera-Caruana clan in Aruba and Venezuela, the Russian Mafia becoming a “ferociously corrupting influence” (according to Barry McCaffrey, President Clinton’s Director of the Office of National Drug Control Policy) in the region, and the growth of transnational narcotics trafficking. Casinos have always been ideal meeting places for both legal and illegal profiteers.

As venues that are usually open late at night, if not 24 hours a day, with plenty of cash on hand among visitors, and with alcohol free-flowing and games of risk encouraged, many casinos offer a solid customer base to dealers of all sorts. For those higher up the chain, the potential for the laundering of illicit profits can be huge. And the reward for the risk of illegal activity in this field is set to only get bigger. 

A Game Changer: The Rise of Online Gambling

The online gambling industry does not require the bricks and mortar of traditional casinos. Unlike physical institutions, which will always require employees working on the casino floor, online gambling sites can operate not only in the cloud, but also drastically minimise the reinvestment of their earnings into local economies.

In some respects, the shift to greater online gaming is unavoidable. Since the launch of the iPhone in 2007 and the iPad in 2010, ownership of hand-held devices has skyrocketed, alongside the growth of industries that cater for them. But while the evolution of technology is unstoppable, the capacity of online gambling outfits to earn billions but pay just a few hundreds of thousands (if that) in tax revenue, is rightfully controversial.

This is further evidence of the greater divide growing between those who utilise the gambling industry and those who work within it. It is why, in recent months, the gambling debate in the Bahamas has been such an important one, not only for the nation of 400,000, but for the Caribbean family as a whole. While there was considerable outcry by gambling businesses over the proposed tax of up to 50% on earnings, the existing taxation rate of 25% of earnings or 11% of gaming revenue — whichever is greater — could fairly be seen by many as outdated, given the explosive growth of the online gambling industry.  

Making an Even Bet

Research results can, of course, be contested and sometimes debunked. This is especially true when there can be so many variables within gambling, from one community to the next. But legalised gambling does offer one additional benefit: when it comes to the online arena, legalised gambling sites will always be more popular than illegal or unauthorised ones. This is not surprising given the strict regulations that surround a legal website, and the potentially grave security risks (not to mention the risk of criminal charges) that can come with using or operating an illegal website. 

The growth of illegal gambling would cause an increase in the loss of revenue suffered by governments and authorised gambling businesses so, as the online component grows, legalised gambling may well become a candidate for reform of the most stringent rules. The longstanding ability of the gambling industry to be used for illicit activity, compounded by the rise of technology and use of methods like cryptocurrency to conceal profits and ill-gotten gains, means that all parties have an interest in seeing strong, modern reform in the sector. Doing so may be painful to some but beneficial to all. Failing to do so could mean that, before long, only criminals would hold a winning hand.