Gambling industry in the world and in Kazakhstan

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Al-Farabi Kazakh National University

GAMBLING INDUSTRY IN THE WORLD AND IN KAZAKHSTAN

Zh. Turlybaeva

Abstract

gambling industry entertainment tourism

The article investigates the range of one of the entertainment tourism, exactly gambling industry in the world, main destinations, its problems affecting to society and perspectives in the future. The general condition of gambling industry and the ways to developing it in Kazakhstan.

The paper aim is the defining of global gambling industry in the world and in Kazakhstan. The main contribution of this paper based on statistical research, the controversial aspects of influence the gambling industry to environmental, social and economic impact. Objectives of the paper are: defining the concept of gambling, defining the major destinations, explaining historical overview, analyze the role of gambling industry in the world, determining perspectives of development of gambling industry in the world. The author will analyze the gambling regions. The paper will be illustrated by a literature review analyzing previous examples in other parts of the world.

Keywords: gambling industry, tourism, gambling destinations, problems and perspectives of gambling.

Introduction

The rapid expansion of legalized gambling and the increasing reliance of governments on gambling revenues in the last decade have fostered a rapid rise in gambling activity worldwide.

Over the past 50 years, world gambling industry accumulate billions of dollars and is a significant part of the economy of most countries. Despite the immensity of the gambling industry, the system of economic knowledge in regard to this scope of research has vague and ambiguous character [1].

In order to understand the broad effects of gambling and to minimize its potentially harmful effects, societies need an unbiased, clear accounting of both its costs and benefits within a social and economic context that is multidisciplinary and holistic.

Gambling is a complex and extraordinary phenomenon. The desire to try one's luck, to challenge fate, receive a special feeling, quickly and easily get rich was and still an integral part of human nature. Development of gambling, in which all determine the case, excitement, counted by thousands of years. Therefor game was not only fun, but also an effective implement of conflict resolution. To this day, the individual elements of gambling are successfully applied in solution important public issues and rules are often contained in the text of the constitutions of some foreign countries.

Recently, the spread of casino gambling has been remarkable as economic evolution for some countries. Casino gambling is now a short trip away from the vast majority of the world's population. Casino ownership has gone from wealthy individuals with questionable character to corporations with stock traded on international exchanges.

In the first half of the twentieth century, the Dutch thinker Johan Huizinga - author of the most fundamental research the phenomenon of the game for today noticed "in the history of mankind game is perhaps the most ancient manifestation of life, since it was born earlier than the culture was formed. "Gambling came when mankind has invented the equivalent of the cost of natural products, at the same time can be regarded as the beginning of the history of gambling prosecutions.

In this context, the goal of the course work is investigating the global gambling industry in the world, the history of emergence, defining the biggest destinations in the world, determining the perspectives of development of gambling industry in Kazakhstan, by studying world gambling industry.

The main contribution of this paper based on statistical research, the controversial aspects of influence the gambling industry to environmental, social and economic impact.

The aim of the course work is the investigation of global gambling industry in the world and in Kazakhstan.

Objectives:

- defining the concept of gambling;

- defining the major destinations;

- explaining historical overview;

- analyze the role of gambling industry in the world;

- determining perspectives of development of gambling industry in Kazakhstan.

Correlation analysis

Evolutionary development of gambling market as a form of entertainment and relaxation accompanied by the development of legal forms integration of casinos into the world economy. Globalization of gambling market is determined by increasing the concentration of organizations and management in corporations, for example in the US, as well as development cooperation of local gambling market scattered around the world.

Statistics on global gambling insufficiently standardized, which can be explained by differences in gambling market structures by countries. Usually, in assessing the legal gambling industry trying to avoid comparing the value of bets and the actual expenditures of participants. In practice, the main statistical indicators are the gross revenues of the gambling business (the Global Gambling Yield / GGY / or the Gross Gambling Revenue / GGR /). Gross revenues are defined as the difference of the total amount of received bids and paid winnings amount. This indicator measures the gross casino revenue, betting, lotteries and are not counted in the calculation of costs and taxes on gambling establishments, it means, characterized volume by sales / service, but not profits [3].

In general, gambling can be divided into two categories: commercial gambling and state lotteries. However, it is difficult to hold a rigid distinction of gambling by commercialization criterion. Also, the lottery can be organized on a commercial basis in the casino or in the form of gambling, although in general case, the bulk of the revenue in this segment of the gaming industry is represented by state lotteries.

In 2014, the global gambling market was estimated at 340 billion. euro and has increased in comparison with 2003 in 1, 8 times. Intensive development of the gambling market was accompanied by structural changes. In the new millennium years, the most dynamic develops interactive (online) gambling. During the period 2003-2014 years of online gaming market increased by 4.6 times during the growth of gambling in the traditional format by 1.7 times. The market shares of interactive forms of gambling in 2003 increased from 3.6% to 9.4% in the total global gambling market, while maintaining a dominant share of the traditional forms of gambling

The global gaming market is quite sensitive to changes in the dynamics of economic development. The financial crisis of 2007-2008 led to decline the market of traditional forms of gambling in 2009 by 0.8% comparing with the previous year. It should be noted that the stabilization of the overall situation in the market of gambling has achieved by increasing in volumes and the acceleration in growth of the interactive gambling market. In 2011, the online gambling sector was observed stabilization at strengthening the demand for traditional forms of 11,3gambling business and a wide range of leisure and entertainment services to casino operators. Since 2012 the gambling business began to show a fairly steady growth in market segments with leading the pace of development of the interactive gambling sector comparing with traditional forms of gambling (figure 1) [4, 5].

Figure 1 World market of gambling gross income in 2003-2015 years, (in billion euros)

The development of the global gambling market is determined by the dominant share of casinos and lottery revenues. In 2014, almost 2/3 of the gross income of the global gambling market accounted for casino activities and the lotteries organization. With the development of new technologies are marked increase in the share of revenue from slot machines outside casinos that form to 1/5 revenues of world gambling market. It should be considered, that the total revenue from the use of slot machines is much higher given the fact that in casino this category of products covers a substantial niche and strengthens its presence (figure 2) [6].

Figure 2 Global gambling market by product category in 2014, in % of total

Features of development of gambling are defined by the expansion of geographical boundaries. Changing attitudes to gambling, the development of regulatory framework and their active involvement into the leisure industry have become factors of structural and territorial characteristics for development of the international gambling market. Comparative analysis of the revenues from gambling by country shows that the United States (31.7%) and China (20.3%) occupy more than half, while Europe - more than a quarter of the global gambling market. The legalization of gambling in Australia and Latin America, followed by the dynamic development of traditional and interactive forms of gambling in these regions of the world and increasing their contribution to the world market. In Australia, the share in 2013 accounted for almost 5% in Latin America and 1.6% of world income gambling (figure 3) [7, 8].

The total annual gross revenue of the gaming market of the EU countries in 2011 are estimated about 84.9 billion euros with an average annual growth rate of 3%, and the Internet gambling - 9.3 billion euros and the average annual growth rate reached 15% (figure 4) [9, 10].

Figure 3 The structure of global gross income of gambling industry in 2013, in % amount

Figure 4 Aggregate gross gambling income for 27 EU countries, in billion euro

Almost 90% of European gambling market in 2013 accounted for Italy, Great Britain, Germany and France. A large proportion of gambling market belonged to Italian, from eight EU Member States, is the fourth largest market in the world and the first in the EU-27, with a total EUR 17.5 billion gross income in 2012. Data analysis should take into account not only the differences in the scope, accessibility and structure of the products, but, most importantly should reckon in the peculiarities of the regulatory legal national controlling the traditional and emerging forms of interactive gambling market (figure 5) [11, 12].

Figure 5 The structure of gambling gross income in 2013, in % total

Kazakhstan today is among the CIS states with the most promising gambling market. Country has over 20 casinos and lots of betting shops. Foreign investors are willing to deposit into this market, and are going to create many resorts in gaming zones. The Law “On Gambling Business” (the “Gambling Law”) dated 12 January 2007, No.219 (amended and restated on 24.04.2015). The Gambling Law provides that the following are considered as gambling: casinos; slot machine halls; bookmaking (betting); and totalizator. Any other forms of gambling are prohibited in Kazakhstan, including electronic and internet casinos, the organization of gambling and betting, where the prize is paid in.

Iran is going to build a casino in the Kenderli resort. The Kenderli resort complex is located on the coast of the Caspian Sea, 210 km from Aktau. There are all conditions for amazing recreations on the shore of the warm sea gulf. That is why the Kenderli resort has become popular over 12 years not only among many Kazakhstanis but also among visitors from other regions. During the season, which lasts only 4 months, thousands of tourists from Kazakhstan and other states, especially from Iran, want to attend this resort. Therefore, Kenderli is waiting for a large construction project.

Problem gambling is not just about the loss of money, but how it can affect the person 's whole life. Gambling is a problem when it:

- interferes with work, school or other activities

- leads to emotional or physical health problems

- causes ?nancial problems

- harms the family or other relationships.

Risk Factors. There are risk factors that can contribute to the development of gambling problems or make it more dif?cult to stop. People are more at risk if they:

- have an early big win (leading to false expectations of future wins)

- have easy access to their preferred form of gambling

- hold mistaken beliefs about the odds of winning

- do not take steps to monitor gambling wins and losses

- have had a recent loss or change, such as divorce, job loss, retirement or death of a loved one

- often feel bored or lonely, or have a history of risk-taking or impulsive behavior

- have ?nancial problems

- have few interests or hobbies, or feel their lives lack direction

- have a history of mental health problems, particularly depression and anxiety have been abused or traumatized

- have a parent who also has (or has had) problems with gambling

- have (or have had) problems with alcohol or other drugs, gambling or overspending

- tie their self-esteem to gambling wins or losses.

Impact on the Community. The cost of problem gambling is dif?cult to quantify, but it can affect communities in many ways. The community is usually called upon to cover the costs of health care, problem gambling treatment, bankruptcy losses, civil and criminal court proceedings as well as increased policing, incarceration and security. The harm it can cause to families and workplaces is also part of its impact on the community.

Crime. Among the most troublesome and least understood costs of gambling is gambling-related crime. Several studies have reported high rates of gambling-related criminal activity among problem gamblers. A recent study of incarcerated Canadian male federal offenders in the Milhaven Assessment Unit found that 26.9 per cent experienced some degree of problem gambling. The rate of pathological gambling using the Canadian Problem Gambling Index (CPGI) was 9.7 per cent.1 Studies of gambling in jails and prisons in other countries have shown that gambling problems are strongly related to criminal behavior. These studies show that between 17 and 60 per cent of inmates have problems with gambling [14]. Compare this with the general population, where just four per cent have problems with gambling. Incarceration can also make an existing gambling problem worse. Inmates have easy access to many forms of gambling. Gambling is a part of the subculture within prison populations. Inmates may be at risk of serious injury or even death if gambling debts are left unpaid.

In terms of public perception, casinos have quickly been transformed from pernicious dens of iniquity to major catalysts for addressing a wide variety of economic concerns. With the exception of Asia, most regions of the world have softened their stance on prohibition against casino gambling, and have instead attempted to use casinos to address various economic objectives, including tourism development, economic development, tax revenue generation, job creation, foreign exchange enhancement, and combating illegal gambling operations.

Conclusion

This paper has attempted to review the most compelling empirical evidence about the legalized gambling sectors, the most demanded types of gambling establishments and its social, economic impact. Most of the research reviewed here on casino gambling has focused on documenting the impacts of casinos on surrounding communities. This work outlines gambling industry in Kazakhstan and the ways to develop in the future.

Gambling activities provide entertainment, venues for socializing, and some kind of hope, however illusory, for a better life at least financially for some participants. As we have seen, gambling activities, which basically depend on gamblers waging money and generally losing in the long run, bring a great deal of revenue to governments in the form of implicit taxes. This money may be used to support governmental and non-governmental programs for the public good.

Also offered the future for casino gaming, in terms of public perception, casinos have quickly been transformed from pernicious dens of iniquity to major catalysts for addressing a wide variety of economic concerns. With the exception of Asia, most regions of the world have softened their stance on prohibition against casino gambling, and have instead attempted to use casinos to address various economic objectives, including tourism development, economic development, tax revenue generation, job creation, foreign exchange enhancement, and combating illegal gambling operations.

The industry trends that are emerging today indicate a convergence of gaming with racing, of gambling with other forms of recreation and entertainment. Gambling is no longer confined to specific sites such as casinos, clubs or racetracks; it increasingly crosses jurisdictional borders and operates globally. From its organic origins as community based recreation, it is now a national and international industry. There are major gambling destinations like USA, Macao, Singapore, Monte-Carlo and Australia, which lead the world in the legalization of internet and online interactive gambling. In the next decades of the dominance economy it is likely we will see the increased integration of gaming business into entertainment conglomerates, extending even further the presence of gambling throughout the spheres of everyday life.

Reference

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