Should Casino Taxes Be Used For Local Regeneration?

12.28.2007 | 8:46 pm | Taxes

There are few industries in the world which can prompt such differing views and opinions than the casino industry.  On the one hand you have the people who want to play and support freedom of choice, but on the other hand you have those who say they are dangerous and can cause major problems for the players and the surrounding areas (for offline casinos).  However, over the last few years we have also seen a new player enter the arena, the politician (or the tax man!).

More and more we are seeing examples of politicians caught between a rock and a hard place when confronted with applications to build new casinos.  The need to balance the needs and opinions of all in the areas affected have seen a number of agreements which mean that taxes from local casino operations are “ear marked” for local needs.  But is this the right way to attract casino operations?

When it comes down to the bottom line, the various local authorities in any country in the world could always do with extra taxes to bolster services, etc.  There are few industries in the world which can offer such high tax income - and on a surprisingly regular basis when you consider the laws of probability associated with the industry.  The truth is that while there may be short term blips, the income from casino profits is often fairly regular when taken over an appropriate timescale.  But is it right to offset the authorisation of casinos with the funds raised for local regeneration?

When you get down to it, if a local authority were to reject an application for a casino the operators  would only go to the next state, town, city, etc and apply there.  So the trend towards ear marking casino taxation for local regeneration is probably not a bad policy, although you will never please all of the people all of the time!