For years, Japan's economy has been looking for a suitable strategy to end its long-lasting recession. Among the measures that the Japanese have seriously considered, the one to legalize casinos stands out. Tokyo's win to host the 2020 Olympic Games has already created great interest among the world's leading casino operators who are waiting for the expected legalization some time in 2013. The world's casino operators are in line to link up with local partners to build casinos in Japan, which are expected to stimulate the Japanese economy and create thousands of jobs.
Japan's economy is the third largest in the world, so the opinion of its leaders should not be ridiculed, as we tend to do in Israel, not always justifiably, when talking about gambling in emerging markets that grant permits to operate casinos in their jurisdictions.
The casino market is a huge industry with a turnover of $147 billion in 2012, $60 billion of which came from the operations of 450 casinos in the US. Gambling income in Nevada, especially in Las Vegas, was $11 billion last year, and 170,000 Americans are employed in casinos in that state alone.
A study by Channel 2 before the last Knesset elections found that objections to casinos in Israel cross party lines, and that it was one of the few issues on which almost everyone agreed. The opponents' main arguments against establishing a casino in Israel are that it is liable to be basis for organized crime and have undesirable effects, such as drug use and money laundering. But studies examining links between a rise in crime and the operation of casinos are ambiguous, and increased police activity can properly handle the risk.
The opponents point to casinos as a danger to the country's poor. In the casino opponents' methodology, the projected gambling losses by the poor mean the levying of an indirect tax on the poor, so no casino should be built in Israel. The assumption that the poor will be part of the casinos' target clientele is astonishing, and is not anchored in the data of the world's casinos.
The opponents also assert that gambling at casinos relies on crude exploitation of weakness, distress, and sometimes people's uncontrollable addictions, which jeopardizes the gambler and his family.
Gambling addiction is indeed a terrible affliction, but given the wide range of available gambling channels, foregoing an Israeli casino will not change the general picture, which requires handling through special public relations and programs.
The opponents to building a casino in Israel ignore the fact that Israel has a huge illegal gambling and games of chance market operated by dubious characters online and in other arenas, and that there is a tourist gambling industry. The operation of an established and supervised, possibly even government-owned, casino might drive out the dubious characters, and transfer the profits from black capital to the treasury. The government will make sure that the casino operator will not be a crime family, but a multinational with acceptable local partners which will receive an operating license, following due diligence, just like the license required for opening a financial institution.
The fact that Israel allows gambling through Mifal Hapayis (the state lottery), Lotto, and Toto (the Israel Sports Betting Board), and announces the winners with great fanfare, also raises questions about the disqualification of the idea of establishing a casino in the country, given that the government does not reject gambling, and even encourages it in the abovementioned cases. The establishment of a casino will spur investment, boost foreign and domestic tourism, create jobs in the periphery, and enrich the state treasury with a flood of revenues.
Objections to a casino that are not based on research, but on slogans and clichés ostensibly wrapped in pious values are an expensive privilege for Israel's people who are seeking to receive more services from the state without constantly increasing their taxes to finance them.
At the level of values, what is true for great powers like the US, Canada, the UK, Germany, and Australia, where casinos abound, could be the moral basis for the operation of casinos in Israel too, given their economic justification. In a country with scores of committees discussing how to divide the national pie, any legitimate way to increase the pie should also be examined, with an emphasis on finding the necessary checks and balances to minimize the potential harm from the establishment of a local casino.
The author is the chief strategist at Ayalon Group
Published by Globes [online], Israel business news - www.globes-online.com - on October 1, 2013
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