Friday, January 05, 2007

We may not admit it but we are all, no matter how pious we maybe, once in a
while fascinated by riches and the rich. Given a choice most of us would
rather be another billionaire Bill Gates than another the late Mother
Theresa of Calcutta. While we easily express anger when for instance
certain sections of our nation award themselves huge salary increases while
the majority cannot even afford a decent meal every day, we would happily
exchange places if given a chance. The bottom line is most of us are rather
mad and sad that we are not rich. It is, therefore, not surprising that a
number of Malawians are jumping at the opportunity to become millionaires
through gambling at the mushrooming casinos or the lottery. In the past due
to pressure from the church and other quarters gambling was considered
illegal in most countries. But over the years in order to balance their
books governments have resorted to establishing national lotteries and
legalising gambling in the hope of raising more revenue. They have thus
avoided the politically risky option of raising taxes. In Malawi the main
reason given has been that legalising gambling would promote tourism and in
turn increase revenue for the government. But while the benefits of gambling
have been trumpeted it appears little has been said about the disadvantages
of gambling. It is as if there are no risks in gambling. It is as if
gambling is like any other "investment". Gambling itself produces nothing of
value other than taking money from the many people who lose and giving it to
a few winners. I would, of course, be hiding my head in the sand if I did
not acknowledge the fact that some good things have or may come out of
legalised gambling. For instance, revenues from gambling may be used in
poverty alleviation projects. However, we cannot ignore the fact that as a
consequence of our search of the fool's gold of gambling a lot of
undesirable consequences have or will befall the poor the revenues are
supposed to assist. It is a proven fact worldwide that the majority of the
people mostly likely to engage in gambling are the poor. And yet this is the
group that can least afford to engage in gambling. The result has been that
income that could have been used to purchase food and other basic
necessities of life is instead spent on gambling. Being the least educated,
in most cases, the poor may have a poor understanding of basic probability
and not understand their low likelihood of winning. This is especially
exacerbated by the fact that the gambling industry usually does not
advertise or warn those playing or buying the lottery tickets of this. In
any case, owners of gambling machines and in some instances governments are
more interested in making more money.
The fact of the matter is that most of the people who buy the lottery ticket
will lose. You may have to spend millions of kwacha to be sure of winning
the jackpot. While the rich can afford to spend their excess money in
gambling it is tragic when the poor use their meagre resources in gambling.
I recently heard of a gentleman who spent all his monthly salary in a
casino. Some may say that since the people who engage in gambling do so
voluntarily and are grown ups, then it is not our problem but theirs. I only
wish it were so, unfortunately, the pathological gambler imposes hurt not
only on herself or himself but on her associates, family members and the
general public. This is so because to finance his or her gambling habits and
debts they may have to borrow money from those close to them. If this does
not materialise they may even involve themselves in theft and fraud to fund
it. We, therefore, cannot say that the problem will remain with him or her
alone.
Gambling is addictive and those who eventually become addicted do not set
out to become addicted. We, therefore, need to take steps to assist those
who get addicted to it in the same way we need to help those who get
addicted to tobacco and alcohol. According to the American Insurance
Institute at least 40 percent of white collar crime in America is committed
by and on behalf of problem gamblers. In fact, two out of every three
compulsive gamblers in America report that they would resort to crime to pay
for their gambling habits. Relying on compulsive gamblers to raise money for
the government amounts to taking advantage of their addiction. Research in
other countries has also shown that claims that gambling aids and benefits
the local communities are not totally true. This is because this revenue is
offset by the increased costs of crime, policing and societal disruption.
The National Council on Problem Gambling in America reports that compulsive
gamblers annually cost American businesses a staggering $40 billion in lost
wages and insurance claims. Even the argument that legalised gambling
increases revenue to the government is a weak one. This is so because it is
a question substituting sources of revenues from one sector of the economy
to another. In other words money that was supposed to have spent in buying
goods and services from other sectors is now spent on gambling. As a result
loss of revenues from taxes that should have been collected from these
sectors is now obtained from the gambling sector. Maybe the only benefit
that we would get is from tourism receipts if we have an increase in
tourists because of the casinos. But we all live in one world we should not
ignore the side effects of gambling on the tourists. While there is a law
that prevents children below the age of 16 from gambling I wonder if
mechanisms were put in place to prevent them from buying lottery tickets and
frequenting casinos. Children are more likely to get addicted to gambling
than adults and need our protection. It is quite obvious to me that addicted
children will eventually steal from their parents and engage in other anti
social behaviours which may have far more serious consequences on the nation
than those from the elderly.
Some have argued that gambling revenues is a form of a voluntary tax
especially in nations where they have national lotteries run by the
government. If that is the case then that tax does not meet the principles
of a good tax system since it is a regressive tax because all pay the same
amount for a lottery ticket. In other words the poor pay a greater
proportion of their income than the rich when it is supposed to be the
opposite. I hope that this article may stimulate a healthy debate on the
dangers of gambling. It is also my sincere hope that in future owners of
gambling machines and lotteries would be forced to put warning labels on
tickets and in their adverts on the odds of winning and potential for
addiction.