How Politicians Are Shaping the Gambling Industry

Have you noticed the increase in lobbying efforts on the part of gambling operators? How about the campaign donations that bookies and casinos have made in recent years? These efforts are not for naught – instead, they are in place to sway lawmakers in favor of gambling operators. After all, the latter have a lot of pull when it comes to the following aspects:

The Legislations

Politicians have a lot of power when it comes to the legalization or lack thereof of gambling operators. Not only do they decide whether these activities are legal, but they also determine where they can take place and who can provide these services. Take the example of the UK. A huge part of the reason this region leads in the gambling industry is that the politicians are in favor of the operators. But when you look at a country like the US, it is clear that lawmakers in several states are against the establishment of gambling venues.

In addition to legalizing gambling, politicians also set out the licensing requirements, thus determining the conditions under which an operator can offer their services in a region. So, at the end of the day, it is the lawmakers who have the final say.

The Taxations

Many politicians often rule in favor of gambling as it is an excellent source of revenue, which goes a long way in bettering the lives of people. In this regard, it is up to the politicians to decide just how much operators will pay to the government, as well as where this money will go. For example, the UK subjects operators to different taxes based on the type of gambling activity. It also has a mandatory levy that operators must contribute to in a bid to provide for people who have been negatively affected by gambling activities.

So, how do these taxes impact operators?

• They reduce their profits. Taxes in some regions can be so high that they can reduce an operator’s overall margins. New York is a good example of this, as operators are subject to a whopping 51% tax on mobile sports bets. But regardless of whether an operator is paying 51% or 10%, there is no denying that this amount reduces what they take home.
• They increase market competition. The higher the taxes, the harder that operators must work to pay what they owe the government while turning a profit. As a result, many operators have turned to marketing strategies such as bonuses, loyalty programmes, and other incentives to get a larger market share. As such, entry into the market in highly-taxed regions often proves difficult.

Politicians have also been known to use high taxes as a way to discourage people from investing in the gambling industry.