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Governments have high stakes in Gambling
The Stakes Get Higher
Richard C. Morais, 04.29.02
From: Forbes.com
In the past decade, countries across the globe have embraced all forms of gambling. That spells business opportunity and social trouble. For governments, it is an immediate jackpot.
Curzon Street in London is a kind of Savile Row for Mayfair's high-rolling casinos, No. 30 being occupied by Crockfords. Once the head office of Royal Worcester china, Crockfords is a James Bond--type casino: Asian women in slinky dresses and Middle Eastern businessman bet millions of pounds on baccarat and roulette wheels spinning under chandeliers.
For all its elegance, however, Crockfords isn't Las Vegas. Gamblers have to be club members for 24 hours before they can actually place a chip, and the casino can't serve alcohol to gambling clients. Britain has 118 casinos, pretty much the same number it's had for the past 35 years, and only ten slot machines are permitted under each roof.
Next year, however, is shaping up as the local gambling industry's Big Bang, as the U.K. government moves to liberalize. Among the planned changes: a new regulatory body offering a potentially unlimited number of casino licenses; eight slot machines per gaming table and no caps on jackpots; no 24-hour rule; and casino advertising for the first time.
Merrill Lynch predicts that in a couple of years Britain will have 250 landbased casinos, including Vegas-sized "gambling hypermarkets" offering slots, fixed-odds sports betting, bingo, table games and pari-mutuel (pooled bets, usually at the racetrack).
This is one corner of a global gambling boom. According to Britain's Global Betting & Gaming Consultants, gamblers across the globe spent an estimated $900 billion on bets last year, leaving gross gaming revenues (wagers minus payouts) of $270 billion.
The industry (excluding Japan) averaged annual double-digit growth during the past decade, slowing to an estimated 8% growth rate in the past two years. (Japanese activity has been flat since the economic bubble burst there more than a decade ago).
Despite all this lucre, gambling has not spawned the sort of multinational corporate giants common in other industries. Myriad local strictures and customs have militated against them. The two European casino operators that moved into Las Vegas wound up with properties in bankruptcy. U.S. gaming giants are branching out but only tentatively. The most successful global operators may be a privately held, old-world monopolist: Casinos Austria.
But this may change as governments across the globe, like Britain's, move rapidly to liberalize betting laws. Driving this change is a state appetite for revenues. Lotteries, casinos, racetrack and sport betting--the impetus is no longer to contain the action to a limited number of state-sanctioned outlets but to let it flower and reap a bounty.
Consider North America. As recently as 1988, the U.S. was one of the world's most restrictive gambling markets, the industry limited to Nevada; Atlantic City, New Jersey; horse and dog tracks, charity bingo; and some state lotteries. Breakthroughs occurred in the recession of the early 1990s, turning America's into the world's fastest-growing gaming industry. Today, 48 of 50 states allow some form of legal wagering, with casinos lately coming on in a big way in California and New York.
In the face of an economic slump last year, Americans spent an estimated $64 billion gambling, according to the consultants Christiansen Capital Advisors, up 5% from 2000. That's more than they spend on movie tickets, theme parks, spectator sports and video games combined. Assorted gambling initiatives have provoked sustained battles--internet wagering remains a particularly contentious issue--but the trend is clear.
Richard C. Morais, 04.29.02
From: Forbes.com
In the past decade, countries across the globe have embraced all forms of gambling. That spells business opportunity and social trouble. For governments, it is an immediate jackpot.
Curzon Street in London is a kind of Savile Row for Mayfair's high-rolling casinos, No. 30 being occupied by Crockfords. Once the head office of Royal Worcester china, Crockfords is a James Bond--type casino: Asian women in slinky dresses and Middle Eastern businessman bet millions of pounds on baccarat and roulette wheels spinning under chandeliers.
For all its elegance, however, Crockfords isn't Las Vegas. Gamblers have to be club members for 24 hours before they can actually place a chip, and the casino can't serve alcohol to gambling clients. Britain has 118 casinos, pretty much the same number it's had for the past 35 years, and only ten slot machines are permitted under each roof.
Next year, however, is shaping up as the local gambling industry's Big Bang, as the U.K. government moves to liberalize. Among the planned changes: a new regulatory body offering a potentially unlimited number of casino licenses; eight slot machines per gaming table and no caps on jackpots; no 24-hour rule; and casino advertising for the first time.
Merrill Lynch predicts that in a couple of years Britain will have 250 landbased casinos, including Vegas-sized "gambling hypermarkets" offering slots, fixed-odds sports betting, bingo, table games and pari-mutuel (pooled bets, usually at the racetrack).
This is one corner of a global gambling boom. According to Britain's Global Betting & Gaming Consultants, gamblers across the globe spent an estimated $900 billion on bets last year, leaving gross gaming revenues (wagers minus payouts) of $270 billion.
The industry (excluding Japan) averaged annual double-digit growth during the past decade, slowing to an estimated 8% growth rate in the past two years. (Japanese activity has been flat since the economic bubble burst there more than a decade ago).
Despite all this lucre, gambling has not spawned the sort of multinational corporate giants common in other industries. Myriad local strictures and customs have militated against them. The two European casino operators that moved into Las Vegas wound up with properties in bankruptcy. U.S. gaming giants are branching out but only tentatively. The most successful global operators may be a privately held, old-world monopolist: Casinos Austria.
But this may change as governments across the globe, like Britain's, move rapidly to liberalize betting laws. Driving this change is a state appetite for revenues. Lotteries, casinos, racetrack and sport betting--the impetus is no longer to contain the action to a limited number of state-sanctioned outlets but to let it flower and reap a bounty.
Consider North America. As recently as 1988, the U.S. was one of the world's most restrictive gambling markets, the industry limited to Nevada; Atlantic City, New Jersey; horse and dog tracks, charity bingo; and some state lotteries. Breakthroughs occurred in the recession of the early 1990s, turning America's into the world's fastest-growing gaming industry. Today, 48 of 50 states allow some form of legal wagering, with casinos lately coming on in a big way in California and New York.
In the face of an economic slump last year, Americans spent an estimated $64 billion gambling, according to the consultants Christiansen Capital Advisors, up 5% from 2000. That's more than they spend on movie tickets, theme parks, spectator sports and video games combined. Assorted gambling initiatives have provoked sustained battles--internet wagering remains a particularly contentious issue--but the trend is clear.