State treasury seeking adequate financial support through gaming revenues
In the realm of economic development, the integration of the gambling industry has proven to be a significant catalyst for job creation, tax revenues, and foreign investment in various countries. This is particularly evident in the examples of the United States, China, and the South Caucasus region, with Azerbaijan and Georgia serving as notable examples.
Experts propose the introduction of a separate tax schedule for casinos in Azerbaijan, including special licenses with an annual fixed fee, tax on gross gaming revenue, win taxes, social contributions, and collections for local administration budgets. This move could lead to the development of the hotel business, restaurants and cafes, transportation logistics, service and entertainment sector, construction, and development, particularly relevant for the Caspian Sea coast and resort areas.
In the United States, such as Pennsylvania, casino legalization has spurred direct employment exceeding 15,000 jobs across gaming, hospitality, and related fields. This has boosted local economies by increasing demand for housing and services, enhancing workforce skills, and supporting regional economic stability. In 2021, tax revenues from casinos generated over $1.4 billion, funding education, infrastructure, and public safety, thereby reducing the tax burden on residents and catalyzing broader economic growth.
For the broader US market, successful integration fosters a competitive environment that attracts considerable capital investment from major companies, which spend on licensing, infrastructure, and marketing. This formalized market enhances consumer protection, data security, and operational efficiency, creating safer and more trustworthy gaming environments.
In China, particularly Macau, the gambling sector drives enormous economic activity by establishing a comprehensive ecosystem that supports hotel services, retail, entertainment, and ancillary suppliers, contributing to a diversified local economy. This integration ensures scalability and profitability for the entire industry, reinforcing the importance of market-wide coordination rather than isolated ventures.
Regarding the South Caucasus region, while specific data in the search results is limited, the examples from these regions and comparable emerging markets indicate similar benefits: job creation through direct employment in gaming and support services, taxation and fiscal contributions that support public services and infrastructure, attraction of foreign investment, and development of supporting industries.
In Georgia, casinos attract foreign tourists, including those from the Middle East and the CIS. The Azerbaijani state strategy for developing the non-oil sector of the economy is discussing the possibility of legalizing casinos. The Tax Code of Azerbaijan sets corporate tax at 20 percent and personal income tax at 14 percent.
In conclusion, integrating the gambling industry into the economy yields direct tax revenues, job creation across various skill levels and sectors, attraction of capital investment and formalization of markets, growth of ancillary industries, and the establishment of integrated gaming ecosystems that enhance market efficiency and sustainability. These benefits underscore why governments regulate and incorporate gambling into their formal economies despite associated risks, which are mitigated through compliance and governance frameworks.
What about the potential impact of introducing casinos on sports sectors in these countries? The legalization and development of casinos could lead to increased funding for sports, as tax revenues generated from casinos could be allocated to support sports infrastructure, teams, and athletes, potentially boosting the popularity and competitiveness of domestic sports.
