Legalization of Casino Gambling in Hong Kong

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Table of Contents

Summary
Problem
Context
Alternatives
Recommendations
Implementation Plan
Action
Reference

Summary

Gambling is a rather controversial social phenomenon. Scholars disagree on its positive and negative influence. Hong Kong is not recommended to legalize gambling as such a step might lead to considerable social problems including pathological gambling, an increase of income gap between the rich and the poor, further development of poverty. As well, legalized gambling does not mean additional income to Hong Kong’s budget, as Macau has a more developed gambling industry and Hong Kong will not stand the competition with Macau. As an alternative to gambling, tourism development is recommended for Hong Kong as a tool to boost economic development and create new jobs.

Problem

The problem is the danger of legalizing casino gambling activities in Hong Kong. Scholars like Cheng (2008) and Hang-tai and Ngai-kuen (2005) argue that gambling takes pathological forms and can be dangerous from both social and economic points of view. At the same time, Hong Kong Government considers gambling activity legalization as one of the most effective economic development tools that would allow increasing fiscal revenue within a short period (McCartney, 2006, p. 41). Thus, the problem is in the controversy of the allegedly positive and negative effects of gambling legalization on the social and economic development of Hong Kong.

Context

The problem should be viewed in the context of the specific Hong Kong position as a part of China, the rather difficult global economic conditions, and the rates of gambling observed in Hong Kong. Macau is the only Chinese special administrative region (SAR) where gambling is legalized ($3.5 billion of annual gambling revenue), and Hong Kong will not benefit from legalization as the competition with Macau will be too strong (McCartney, 2006, p. 41). Moreover, the global economic crisis might condition unlawful use of gambling activities by Hong Kong officials if gambling is legalized (Hang-tai and Ngai-kuen, 2005, p. 2). Finally, according to Key Statistics (2005), gambling is a serious issue in Hong Kong with 80.4% of citizens participating in legal (or illegal) gambling and 25.4% spending over $1000 for gambling per month (Key Statistics, 2005, pp. 5 – 6). Drawing from these data, gambling is a serious social and economic threat to Hong Kong, and its legalization is rather dangerous.

Table 1: Hong Kong Gambling Statistics

Factor	Percentage
Participation in legal gambling, 2005	80.4%
Participation in illegal gambling, 2005	2.1%
Spent up to $50 on gambling	28.1%
Spent $500 – 1000 on gambling	10.5%
Spent over $1000 on gambling	18.5%
Tried gambling at the age of 10 – 14	16.4%
Tried gambling at the age of 15 – 19	39.9%
Tried gambling at the age of 45 – 49	0.6%
Probable pathological gamblers	11.4%

Alternatives

To avoid this dangerous step, the further development of the tourism industry in Hong Kong should be considered. As far as Tai (2005) and Lo (2009) argue that gambling legalization is viewed by the Hong Kong Government as the tool of economic development, employment facilitation, creation of new working places, and easing the tax climate in the region, tourism can be seen as an equally effective alternative. According to McCartney (2006), the location near Macau can also be used for tourism development in Hong Kong thus allowing both regions, Hong Kong and Macau, to develop their spheres of activity, tourism and gambling respectively, without harm to any party (p. 43).

Recommendations

Accordingly, it is recommended that Hong Kong should not legalize gambling activities. Instead, the SAR should develop the tourism industry as another, safer and equally effective, means of creating jobs and facilitating employment in Hong Kong.

Implementation Plan

The recommended alternative activity should be implemented according to the following plan outlined in brief:

Hong Kong Gambling statistics (see Table 1) should be studied by the Government to see the danger of gambling legalization in Hong Kong;
Additional funding should be directed to tourism industry;
Contacts should be established (resumed) with Macau officials to facilitate the cooperation of the governments of Macau and Hong Kong on gambling development in Macau and tourism development in Hong Kong;
A cheap and accessible transportation system between Macau and Hong Kong should be developed.

Action

The specific actions outlined above should also include such details as the calculation of the potential benefit from tourist industry and its potential influence on tax climate in Hong Kong. As well, the pros and cons of gambling legalization should be re-assessed to ensure the correct choice is being made. Finally, the potential cost of gambling legalization to society should be forecasted not to legalize gambling and find another alternative to stimulate economy and increase fiscal revenue. Tourism will be a perfect match in this case, as people traveling to Hong Kong might satisfy their gambling needs in the close region of Macau. If both regions cooperate effectively, their joint work will boost their economies considerably, which is especially important under the circumstances of the global economic crisis (see Table 2).

Table 2: Hong Kong GDP Dynamics before and after the global economic crisis

GDP Factor	Percentage of change
GDP Factor	2006	2007	2008
Total GDP	+9%	+9.5%	+3.9%
Current dollars	+9%	+9.5%	+3.9%
Chained dollars	+5.8%	+6.4%	+2.5%
GDP per capita	+7.8%	+8.4%	+3.2%
Current dollars	+7.8%	+8.4%	+3.2%
Chained dollars	+4.7%	+5.3%	+1.7%

Reference

Cheng, H 2008, ‘Evaluation Study on the Impacts of Gambling Liberalization in Nearby Cities on Hong Kong Peoples’ Participation in Gambling Activities and Development of Counselling and Treatment Services for Problem Gamblers’, Department of Applied Social Sciences The Hong Kong Polytechnic University, pp. i – 100.

Hang-Tai, S and Ngai-kuen, K 2005, ‘No Longer an Entertainment:Social Cost of Problem Gambling in Hong Kong’, pp. 1 – 17.

Key Statistics 2005, ‘Study on Hong Kong People’s Participation in Gambling Activities’, KeyStat, pp. 1 – 25.

Lo, S 2009, ‘Casino Capitalism and Its Legitimacy Impact on the Politico-administrative State in Macau’, Journal of Current Chinese Affairs, vol. 1, no. 1, pp. 19 – 47.

McCartney, G 2006, ‘ Casinos as a Tourism Redevelopment Strategy – The Case of Macao’, Journal of Macau Gaming Research Association, vol. 2, pp. 40 – 54.

Tai, S 2005, ‘The Obstacles for Introduction of Responsible Gambling Policy: A Case Study of Hong Kong and Singapore’, MIEF Rehabilitation Centre for Problem Gamblers, pp. 1 – 18.

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