What does Ukraine lose prohibiting gambling business?

What does Ukraine lose prohibiting gambling business?

Prohibition of gambling business in Ukraine has caused loss of millions of dollars annually, rise of corruption and increase in gambling addiction among the poorest citizens. 

 

According to experts’ approximate estimation, the turnover of illegal business of gambling venues equals to 300 mln dollars. The money falls out of the economy because taxes are not paid. There’s a little chance that any part of it is staying in the country. In order to make sure that criminal capital is safe, it is better to hide it somewhere in foreign offshores. Talking about getting money out by organizers of illegal gambling, the member of the parliament Pavlo Kyshkar gives the number of 25 mln UAH – and it’s only for the last year.

 

Fight with windmills

Underground gambling parlors in Ukraine work with minimal masking as anyone can easily find a place where they can drop a bundle on slot machines. Easy access for clients influences revenues and is achieved by bribing policemen, officials and everyone who is connected to government. 

High level of corruption is acknowledged even by the head of MIA Arsen Avakov. He has recently appealed to deputies of  Verkhovna Rada to close the source of bribes by making gambling business legal. He named the attempts to resist gambling crime in existing circumstances “fight with windmills”.

 

Remedy against ludomania

As far as the epidemic of ludomania is concerned, if there’s law obliging entrepreneurs to limit entering casinos, sums of bets, maximum losses and paybacks, some citizens’ addiction to gambling won’t be social disaster on a national scale. Let us note that according to Western scientists’ researches, not more than 3% of gamblers suffer from addiction. 

The Prosecutor General Yuriy Lutsenko is also in favor of implementing regulations. He thinks that casinos should be located in five-star hotels where low-income citizens and teenagers cannot enter.

What does Ukraine lose prohibiting gambling business (1)

At the same time greed for gain of owners of illegal gambling clubs isn’t limited at all. Most of their visitors are looking for ways to switch off from the problems of poverty waiting for fortune to be merciful and give them a big win. For these people game quickly turns into addiction. It’s enough to pretend to be a gambler and visit any of these venues in order to make sure that it’s true.

The aforementioned problems are used by opponents of industry legalization. Even regulated gambling is considered to be the opportunity for money laundering and the source of bribes for dishonest officials the worst of them being people’s pathological addiction to gambling.  But the experience of Ukraine suggests the opposite.

 

“Locomotive” for the economy

There is also international experience which shows that gambling business is comparatively easy way of attracting investments. The casino itself attracts tourists who secure a profit of tour and transport operators, restaurateurs, hoteliers, merchants, etc. Casino pulls up the service sector. For example, Las Vegas receives only 10% of its revenues from gambling.

However, in order to see that gambling industry positively affects economy one should just look around. In Georgia the liberalization of legislation resulted in large foreign investors entering the country and raising tourism to a brand-new level. For example, last year the budget of Batumi only from casino reached almost 5,5 mln dollars. Not bad for a city of 15 000 citizens. 

What does Ukraine lose prohibiting gambling business (2)

Nowadays, it is not just a local resort as the increase of foreign tourist flow has been continuing for several years. Sure, not everybody goes here to gamble but tourists need good conditions for rest. The city owes its hotels with high level service to gambling business. The investor gets fringe benefits if he opens casino in a large hotel.

Lots of representatives of Ukrainian authorities understand the need to regulate gambling business. It is proved by corresponding bills discussed in Verkhovna Rada. But the opposition to such initiatives is still quite serious. Some politicians sincerely believe that passage of law will enable existing criminal venues to operate openly but there are those who see it as personal benefit.

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