What started as crusade to outlaw gambling advertisements has morphed
into a push to prohibit casinos in Georgia. Lawmakers say they want
to protect youth from the iniquitous vice of gambling, but they're
betting on the wrong horse. Closing casinos won't keep children
and teenagers out because they are already prohibited from entering
them.
The most popular — and addictive — forms of gambling are electronic
machines and Internet gambling. Until last year, slot parlors were
unregulated and proliferated all over the country, contributing to a
boost in gambling addiction. But when the government implemented
a flat-tax regime and raised the annual fee for a slot parlor in Tbilisi
from $12,000 to $60,000, virtually every slot club shut down. But young
Georgians and addictive gamblers just moved to on-line sites, which are
booming.
In Georgia, only land casinos have the right to operate online gaming
sites at quarterly fees of up to $36,000. If the government wants
to combat problem gambling, then it should restrict online betting
sites, not casinos.
Last year, casinos contributed more than $10 million in licensing
fees alone to the state budget. Rather than banning casinos,
the government should be fine-tuning its efforts to turn the Black Sea
port of Batumi into a regional gaming haven. With an average of 208
rainy days a year and a tourist season that barely lasts two months,
Batumi needs all the help it can get to attract vacationers and other
visitors.
The previous government banked on luring investors by offering
dirt-cheap licensing fees, tax-free incentives and letting the free
market take care of itself to lure gamblers from neighboring countries
like Azerbaijan, Turkey, Iran and Russia, where gambling is forbidden or
restricted. Having a vision is great, but it will just be a mirage
without a plan to go with it.
The flat-tax system, in which table and slot fees are set, is fine
for an established casino but terrible for a casino that is just
starting up. This might explain why no other country uses such a system.
Moreover, Georgia has not established a limitation on permits. For an
investor, limitation equals return and lack of a limitation is a sign
the government has no strategy.
The government expected that the more casinos they build, the more people would come to gamble, but it doesn't work like that.
Since the tax incentives were enacted in 2005, Batumi has only
managed to accommodate four casinos. No studies have been done
to determine the city's gambling capacity. Infrastructure remains
a hurdle as Batumi has one small airport that serves about six small
airlines, while Tbilisi is eight hours away, reachable only by a mostly
treacherous road.
Casino clients are either tourists that drop a few bucks for fun or
serious players that can typically afford to lose. Prohibiting casinos
will do nothing to prevent children from gambling, and it will eliminate
an opportunity to use the funds that casinos bring to help establish
gambling-treatment programs the country severely lacks. Gambling is
an addiction that goes in hand with drug and alcohol addiction.
Therapists in Tbilisi state that 90 percent of those they treat
for substance abuse are gambling addicts, too. The problem in Tbilisi is
that there are too many fiends and far too little treatment facilities.
I don't see anything wrong with restricting the obnoxious gambling
advertisements that are plastered across the city, but they shouldn't
ban casinos. If the prohibition of alcohol and drugs has failed, then
why should the prohibition of gambling succeed? It, too, will drive
people underground, and it will be the house that gets nothing
for something.
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