Sports betting is big in some countries while in others restrictions have hindered the participation of citizens in either online or offline platforms. For those who have been following sports betting Philippines as well as in other countries, the effects of legalized sports betting are evident. From taxes, sponsorship and the fortune changes for those who have won varied prizes, the positive effects of sports betting are even convincing states which have been stringent on betting to relax the conditions. In this article, Evelyn Balyton looks at the effects of sports betting on the economy while also delving into the benefits that individuals and states can derive from this activity.
Some years back, a report that was produced by Oxford University stated that the legalization of sports betting in the United States would inject more than fourteen billion dollars into the annual Gross Domestic Product. This is a huge amount given that this is just one component of the betting industry. When you consider the contribution of the whole gambling industry, the amount that would be injected through allowing or relaxation of the rules would be mind-boggling. This means that the legalization of sports betting in countries that have not done so yet should not only be celebrated by the betting enthusiasts, it is something that should be hailed by anyone who wants to see economic growth. When most of the economies are grappling with the effects of COVID-19 lockdowns, this is something that can ignite growth.
So apart from the capital injection of billions of dollars into the economy what other benefits will sports betting bring to economies that are currently struggling due to the COVID -19 pandemic and other causes?
- Creation of employment
- Contributing to tax revenue
- Economic growth
Creation of employment
With most people having lost jobs during the lockdowns, news that there are vacancies to be filled would be good to many. Sports betting companies have a string of jobs that are created when they open shop in a given economy. Different betting agencies will need personnel to man them, ranging from administrators, accountants, managers, marketers, storekeepers among others, directly and indirectly, related jobs. It is not only agents who would be deriving income from sports betting activities.
The betting centers will require entertainers as well as outsourcing some of the services which help in the smooth running of the establishment. There also some other indirect services which will come as a result of the establishment of sports betting in a country; talk of web developers as well as teams that maintain these platform. All these and many other services will emerge and people will be deriving some income. With this, betting will have added the number of people who are moving from the unemployment support schemes. This essentially helps to save and also dignifies the lives of individuals who have made that shift.
Betting is one of the activities that are taxed heavily. Any government looking to raise taxes to finance its economic activities targets the gambling industry as the first source. Together with the liquor industry among others; they are referred to as Sin Taxes. Many governments especially those that are looking to regulate the industry see tax increments as very effective tools. With the legalization of sports betting an economy will not only be widening the tax net but also creating a chance to raise a huge amount from a single source.
Sports betting companies are paying huge amounts of money from their earnings in form of taxes. In some countries, this amount is as high as fifty percent. There are situations where some of these companies are closing shop citing tax burden. The importance of sports betting firms in raising tax cannot be ignored, whether it is done to regulate the industry or make the business contribute their share to the economy, the amount raised is something that can significantly impact an economy.
For economies to benefit from the tax revenue that is promised by the sports betting companies they need to put in place laws that favor these businesses. The registration process should be in such a way that the company can start operation as soon as possible. The process of setting a shop should be easy to comply with for the genuine players but stringent enough to discourage exploiters from setting shop in a given country. Money derived from sports betting activities will continue to help governments fund big projects. It will continue to remain attractive to tax agencies due to its ease of administration and the effectiveness it exhibits in terms of compliance.
Creation of employment and business opportunities as well as injecting some money in an economy in form of tax revenue will lead to economic growth. This is the fuel that many economies need as they struggle to stay afloat at a time when fortunes have dwindled due to the current pandemic. Countries that have legalized sports betting can enjoy whole lots of benefits. Those that fear negative effects that the activity may have on its citizen can impose restrictions on who should bet and when. Sport betting firms are law-abiding corporate citizens and they will do everything legal and ethical to ensure that the industry contributes its fair share in getting economies out of the current recession.