Who is winning: the Gamblers or the Casinos?

There’s no denying that gambling can be thrilling. The anticipation of possibly winning immense draws many people to casinos and other gambling establishments. But who is indeed winning when it comes to gambling? The players or the casinos themselves? In this blog post, we’ll take a closer look at the numbers to see who is coming out on top.

Casinos vs. Gamblers

The vast majority of casinos are corporations that act as multi-billion-dollar businesses. Depending on the state or country in which they’re located, these casinos may also be exempt from taxes if their profits take a substantial enough dive below what is required to stay afloat. This is because the casinos have already been taxed when they first acquired their license.

In terms of gambling, those who play at these establishments are forking over a lot of money to do so. According to a study released by PricewaterhouseCoopers, “the global casino gaming market is expected to reach US$441 billion by 2021”. This makes them a multi-billion dollar business and one that is only gaining popularity. At the same time, banks such as Goldman Sachs have issued warnings about these companies due to excessive debt and other issues.

The Numbers

According to research done by PwC in 2016, “the global casino gaming market is expected to reach US$441 billion by 2021”. This makes the gaming industry about $88 billion in revenue per year.

On the other hand, “the global gambling win was approximately US$533 billion in 2016, up 2 percent from 2015”. These numbers show an increase of 6.5% in global gambling wins since 2014.

The Role of Taxes

As mentioned in the opening paragraph, taxes significantly impact gambling. Taxing entities vary by country or state, but the only factors to consider are whether these governing bodies give tax breaks to companies that do business within their borders and if said businesses rake in much more money than they payout.

Las Vegas is the perfect example of this. The casinos in Las Vegas have low tax rates, which allow them to undercut the competition by offering perks such as free hotel rooms and reduced food costs.

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Casino counter argument

The overall goal is to make money, not lose it. Some might argue that gamblers win more per capita than they lose; thus, casinos lose. However, this argument would be that people gamble more often because they won in the past or because there are perks involved.

Even though gamblers win more than they lose, if you look at the big picture, it is easy to see that casino operators consistently rake in big bucks year after year.

This isn’t the case everywhere, though. One example is Macau, which experienced a significant downturn in gambling revenues due to China’s economic slowdown. The city earned about $29 billion per year at its peak, even though it only had six casinos. However, after the drop-off in financial growth within China hit 40%, the amount of money earned in Macau dropped to $15 billion.

The casinos in Las Vegas have low tax rates, which allow them to undercut the competition by offering perks such as free hotel rooms and reduced food costs. According to research done by PwC in 2016, “the global casino gaming market is expected to reach US$441 billion by 2021”. This makes the gaming industry about $88 billion in revenue per year. On the other hand, “the global gambling win was approximately US$533 billion in 2016, up 2 percent from 2015”. These numbers show an increase of 6.5% since 2014.

Taxes play a massive role in gambling because the only factors to consider are whether these governing bodies give tax breaks to companies that do business within their borders and if said businesses rake in much more money than they payout.

As mentioned earlier, Las Vegas is a perfect example of this. The casinos in Las Vegas have low tax rates, which allow them to undercut the competition by offering perks such as free hotel rooms and reduced food costs. This isn’t the case everywhere, though. One example is Macau, which experienced a significant downturn in gambling revenues due to China’s economic slowdown. The city earned about $29 billion per year at its peak, even though it only had six casinos. However, after the drop-off in financial growth within China hit 40%, the amount of money earned in Macau dropped to $15 billion.

Conclusion

Who is winning the gamblers or the casinos? If we go by sheer numbers, it would seem that casino operators rake in big bucks year after year — regardless of what country they’re running their operations out of.

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