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| Opinion |
| My Turn |
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by
Samuel Kadyakale, 03 January 2007
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03:47:44
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The other side of gambling
We may not admit it but we are all, no matter how pious we maybe, once in a while fascinated by riches and the rich. Given a choice most of us would rather be another billionaire Bill Gates than another the late Mother Theresa of Calcutta.
While we easily express anger when for instance certain sections of our nation award themselves huge salary increases while the majority cannot even afford a decent meal every day, we would happily exchange places if given a chance. The bottom line is most of us are rather mad and sad that we are not rich. It is, therefore, not surprising that a number of Malawians are jumping at the opportunity to become millionaires through gambling at the mushrooming casinos or the lottery.
In the past due to pressure from the church and other quarters gambling was considered illegal in most countries. But over the years in order to balance their books governments have resorted to establishing national lotteries and legalising gambling in the hope of raising more revenue. They have thus avoided the politically risky option of raising taxes.
In Malawi the main reason given has been that legalising gambling would promote tourism and in turn increase revenue for the government. But while the benefits of gambling have been trumpeted it appears little has been said about the disadvantages of gambling. It is as if there are no risks in gambling. It is as if gambling is like any other “investment”. Gambling itself produces nothing of value other than taking money from the many people who lose and giving it to a few winners.
I would, of course, be hiding my head in the sand if I did not acknowledge the fact that some good things have or may come out of legalised gambling. For instance, revenues from gambling may be used in poverty alleviation projects. However, we cannot ignore the fact that as a consequence of our search of the fool’s gold of gambling a lot of undesirable consequences have or will befall the poor the revenues are supposed to assist.
It is a proven fact worldwide that the majority of the people mostly likely to engage in gambling are the poor. And yet this is the group that can least afford to engage in gambling. The result has been that income that could have been used to purchase food and other basic necessities of life is instead spent on gambling.
Being the least educated, in most cases, the poor may have a poor understanding of basic probability and not understand their low likelihood of winning. This is especially exacerbated by the fact that the gambling industry usually does not advertise or warn those playing or buying the lottery tickets of this. In any case, owners of gambling machines and in some instances governments are more interested in making more money.
The fact of the matter is that most of the people who buy the lottery ticket will lose. You may have to spend millions of kwacha to be sure of winning the jackpot. While the rich can afford to spend their excess money in gambling it is tragic when the poor use their meagre resources in gambling. I recently heard of a gentleman who spent all his monthly salary in a casino.
Some may say that since the people who engage in gambling do so voluntarily and are grown ups, then it is not our problem but theirs. I only wish it were so, unfortunately, the pathological gambler imposes hurt not only on herself or himself but on her associates, family members and the general public. This is so because to finance his or her gambling habits and debts they may have to borrow money from those close to them. If this does not materialise they may even involve themselves in theft and fraud to fund it. We, therefore, cannot say that the problem will remain with him or her alone.
Gambling is addictive and those who eventually become addicted do not set out to become addicted. We, therefore, need to take steps to assist those who get addicted to it in the same way we need to help those who get addicted to tobacco and alcohol. According to the American Insurance Institute at least 40 percent of white collar crime in America is committed by and on behalf of problem gamblers. In fact, two out of every three compulsive gamblers in America report that they would resort to crime to pay for their gambling habits. Relying on compulsive gamblers to raise money for the government amounts to taking advantage of their addiction.
Research in other countries has also shown that claims that gambling aids and benefits the local communities are not totally true. This is because this revenue is offset by the increased costs of crime, policing and societal disruption. The National Council on Problem Gambling in America reports that compulsive gamblers annually cost American businesses a staggering $40 billion in lost wages and insurance claims.
Even the argument that legalised gambling increases revenue to the government is a weak one. This is so because it is a question substituting sources of revenues from one sector of the economy to another. In other words money that was supposed to have spent in buying goods and services from other sectors is now spent on gambling. As a result loss of revenues from taxes that should have been collected from these sectors is now obtained from the gambling sector.
Maybe the only benefit that we would get is from tourism receipts if we have an increase in tourists because of the casinos. But we all live in one world we should not ignore the side effects of gambling on the tourists.
While there is a law that prevents children below the age of 16 from gambling I wonder if mechanisms were put in place to prevent them from buying lottery tickets and frequenting casinos. Children are more likely to get addicted to gambling than adults and need our protection. It is quite obvious to me that addicted children will eventually steal from their parents and engage in other anti social behaviours which may have far more serious consequences on the nation than those from the elderly.
Some have argued that gambling revenues is a form of a voluntary tax especially in nations where they have national lotteries run by the government. If that is the case then that tax does not meet the principles of a good tax system since it is a regressive tax because all pay the same amount for a lottery ticket. In other words the poor pay a greater proportion of their income than the rich when it is supposed to be the opposite.
I hope that this article may stimulate a healthy debate on the dangers of gambling. It is also my sincere hope that in future owners of gambling machines and lotteries would be forced to put warning labels on tickets and in their adverts on the odds of winning and potential for addiction.
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