Despite the struggling Italian economy, people are still hoping to hit that big jackpot that may lurk on every street corner. In a neighborhood located near the ancient Roman walls, players can enjoy bingo and slot machines at a gambling parlor that was once a movie theater. This parlor is complete with a bar, tobacco shop, video betting games, horse race betting, bingo, lottery tickets and scratch cards. Italy is Europe’s largest gambling market and one of the largest in the world which weakens consumer spending during a time of economic crisis.
Italian Bingo Problems
Bingo, as well as other forms of gambling, as started to create many problems for the Italian government and operators alike. A Christian charity located in Rome called Sant’Edigio, has seen an increase in problem gamblers since Italy began loosening its gambling regulations as gambling addicts pour into the parlors each day. Initially, the de-regulation was welcome as many thought this would reduce the power of organized crime syndicates and increase state revenue. However, revenues have only slightly risen since 2001 while the turnover has quadrupled. The mob is also adapting to the de-regulation as it is moving its operations to legal gambling ventures. Many Italian lawmakers are now starting to believe that the deregulation has gotten out of control and some regulation should be reinstated.
The Start of Bingo Deregulation
The deregulation of bingo and other types of gambling started in 2991 when Italy was in desperate need of additional revenue during the economic crisis similar to the one that Italy is facing today. Last year, the Italian government received approximately 8.5 million euros in tax revenues but this number has only increased by 3 billion euros from 2001 to 2011 while consumer gambling spending has increased by 60 billion euros. There is a 21% sales tax on most consumer goods, excluding food, but gambling operators are subject to much lower taxes as an incentive. The tax on gambling revenue was less than 11% in 2011. Experts believe that the Italian economy will shrink by 2% this year but revenue from gambling is expected to increase by more than 12% to over 90 billion euros. This figure makes up approximately 5% of Italy’s annual GDP. It is estimate that the gaming industry in Italy has generated about ¼ of the world’s entire $368 million in gaming revenue in 2010.
The Effects of Bingo Deregulation
Unlike companies that product consumer goods, bingo and other gaming operations do not create wealth but simply redistribute it. The car company Fiat generated less than half of the income that the gaming industry did in 2011 but the production of cars supports many other industries that help create more than 10 times the amount of Italian jobs that the gaming industry does. In a time of economic recession, additional consumer spending is needed to compensate for it but when consumers spend more money on gambling, they are less likely to buy consumer goods. Before the deregulation of Italian gambling began, there were only lotteries and soccer game betting. Other gambling activities were only allowed in the 4 legal casinos in Venice, Campion d’Italia, Saint Vincent and San Remo. The state concessions buyers were given a low tax rate that allowed them to set high percentage payouts to peak interest in new games. This means that a player would get small payouts that gave the illusion that the odds could be beat.
This has resulted in more than 700,000 gambling addicts in Italy and the 400,000 Italian video slot machines make up more than half of all the betting that takes place in Italy. This has caused much concern to many people because it has been made so easy for gamblers to play anywhere. For gambling addicts, this means greater access to their addiction which leads many of them to incur large debts, become estranged from family and even lose their homes. People who have been affected by gambling addiction believe that Italian gambling halls need to be shut down completely and all video and slot machines need to be destroyed. The Italian gambling environment has made it even more difficult for addicts because there are very few places that do not offer gambling. It seems that the deregulation of gambling in Italy has caused even more economic and social problems than it has fixed.