Casinos teach bad habits

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Casinos teach bad habits

The government in July held its first joint public-private convention to promote the tourism industry and introduced an ambitious plan to promote the development of integrated resort areas that are burgeoning and blooming in Singapore and other tourism destinations. At the news, foreign casino and leisure companies are proposing large-scale investments if the government authorizes open casinos in resort venues.

The government currently has no plan to change the foreigners-only policy on casinos. But foreign investors are continuing to pressure the government. However, the timing for lifting the ban is not convenient considering traditional social sentiment toward gambling, economic circumstances, concerns for capital flight and regional imbalance.

Even for conservative Asian standards, Koreans are strict on gambling. It has to do with a wide belief about Koreans’ weakness for gambling. If entry to casinos is allowed, addictions and family breakdowns could not only hurt individuals but also overall society. Even with various programs to promote gaming as leisure, gambling cannot be easily contained once it’s started.

If entry for local citizens is allowed, regional economies could benefit. But other negative downsides, like overspending, addiction, predatory lending and money laundering, could proliferate.

Even considering the upsides - foreign investment, increased tax revenue and jobs - the national benefits are unrelated to individual income and living standards. The per capita gross national income increased from $17,000 in 2007 to $24,000 this year but largely because of stronger won value. Restraint on local access to casinos should be kept until Korean individuals earn an average income of $40,000 and common people can afford to visit casinos as a past-time.

Open casinos can lead to controversy about capital flight and overseas gambling excursions. Last year’s introduction of preliminary reviews of casino licenses underscored that foreign companies had been given excessive privileges. If foreign companies are allowed to run open casinos, there is a possibility that they could cash out on their early investment.

Some argue that overseas gambling could ease if Koreans are able to enter casinos at home. But addicted gamblers could go overseas to escape the supervision of local authorities.

According to the National Gambling Control Commission study in 2011, 35 percent of gamblers that frequented foreign casinos spent more than 3 million won ($2,846). About 13 percent played games with more than 10 million won. Of them, 67 percent were compulsive players with their habits built from home.

Licenses for open casinos can also spur conflict among regional governments. If a casino opens that accepts Koreans in Incheon, then Kangwonland, which primarily pulls in customers from the capital, would be hard hit. The regional development plan would flop and the capital area could be resented as a hub for gambling.

Before considering the economic benefits of an open casino, social costs and its repercussions must be taken into account. The liberalization of casinos should not be approached simply from an industrial aspect. We must pay attention to the sprawling growth of illegal gambling, which cost an estimated 75 trillion won last year. Legalizing casinos could only worsen the bad habit.

Translation by the Korea JoongAng Daily staff

*The author is a professor in the hotel and tourism management department at Howon University.

By Chang Byung-kwon

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