Although we might not typically think of it in these terms, the gambling sector often contributes a surprising amount of money to the economic health of a country. While it is by no means the biggest sector of the economy, it nevertheless represents a notable contribution to a country’s overall economic health.
One thing that is particularly interesting about the contribution the gambling sector makes to the economy of a particular nation, is how much it varies between different nations, regions and parts of the world. While in some countries, this sector barely makes an economic blip, in others, it contributes billions of dollars in direct tax revenue as well as millions in employment-related contributions.
With this point in mind, in this short article, we will take a look at the kind of contributions the gambling sector can make to the economy, followed by a look at the contributions it makes in different parts of the world.
How do we measure the economic contribution of the gambling and casino sector?
When we want to measure the health and status of a country’s economy, the two main metrics we look at are GNP (Gross National Product) and GDP (Gross Domestic Product). Both of these measure the total market value of all goods and services produced within a certain timeframe in a certain country, although they are calculated in different ways.
The latter — GDP — looks at the value of finished domestic goods and services produced within a country, while GNP looks at the value of all finished goods and services owned by the citizens or inhabitants of a country, regardless of whether they are produced in that country.
When we look at the contribution that the gambling sector or casinos make to the economy of a country, it is generally these two measures we will use to see how it fits into the overall picture.
What types of contributions does it make?
Broadly speaking, there are three main ways that the gambling and casino sector might contribute to the economy.
Firstly, there is direct tax revenue. This is gained by governments levying specific taxes on any revenue generated by casinos or other gambling operators. For example, any money generated by casinos offering a list of online casino bonuses in Russia on any of their games would be subject to certain government taxes. These will be collected by the government and put to use with the other tax revenues they collect.
Secondly, there are also indirect sources of revenue generated by the gambling sector. These are not necessarily generated directly by gambling as an activity but are generated through closely related sectors, such as the hospitality industry. Visitors to a casino might also spend money on drinks, food or a hotel stay as part of their visit. These closely related activities will make a direct contribution to the economy.
Finally, casinos, whether online or in-person, and the gambling sector more generally, will also contribute to the economy indirectly through employment. Employees in the casino and gambling sector will obviously pay taxes on their wages, which eventually contribute to a country’s tax receipts.
Although there might be other ways that the gambling sector contributes to the GNP or GDP of a sector — such as through the development of software for online casinos — the three contributions identified above are the main ones.
Gambling, casinos and the global economy: How does it fit in?
With the above in mind, let’s take a look at how the gambling sector fits into the global economy.
As noted earlier, this varies considerably between different countries. There are many different reasons for this. For example, the overall legality of gambling and the openness of a particular country to casinos will have an obvious impact. In countries with fewer restrictions on gambling, it obviously has the opportunity to make a bigger contribution.
There might also be cultural reasons for this variation. For example, in countries that are more religious, this might impact attitudes towards gambling and casinos more generally versus those countries that have traditionally been more open.
These factors definitely seem to be present in the data that has been collected on this topic. One recent report by the Betting and Gaming Council in the UK estimated that the gambling industry contributes around £7.7bn to the British economy, as well as 61,000 directly and 58,000 indirectly related jobs.
Within the European Union, there is also considerable variation between different member states. Greece receives the highest contribution made by the gaming revenue as a share of GDP at 1.16%, while Poland has the lowest at 0.3%.
In the US, these figures are even higher, with the US commercial gaming revenue growing to $53bn in 2021 — although this ultimately represents a fairly small slice of the US economy.