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The Economic Contribution of the Australian Gaming Machine Industry

The gaming machine industry is among the most profitable industries in countries which permit this activity. The services provided by this industry cut across various forms of gaming such as poker games, bingo, raffles as well as playing lotteries and casino game which are provided in places such as clubs, pubs, hotels and casinos. This industry has impacted the economies of various countries in different continents, providing revenue, jobs amongst other positive effects. This text focuses on Australia, exploring the various ways the gaming machine industry has had an impact on the Australian economy.

The term ‘gaming’ in Australia refers to all forms of legal gambling other than racing and sports betting. This includes poker and gaming machines, casino gaming, raffles, bingo, and lotteries. Gaming machines contributed $8.32 Billion to the Australian economy in value added:

  1. Direct Employment across all industries (Include Manufacturing)

  2. Exports and the sale of machine overseas

  3. Tax revenue for state and commonwealth governments.

According to the Australian gambling laws the only form of online gambling that's currently completely legal in is betting on auto racing, sports betting, and online lottery. Sports betting and betting on auto racing is only legal provided the betting is not done in-game. All other forms of online gambling are prohibited, however if you’d like to have full overview you’ll find more information on this from here.

In 2016/2017, the Centre of International Economics (CIE) in Australia carried out a report in Australia which estimated the economic contributions which the electronic gaming machines had in Australia; these reports took into account the effect of the gaming machines on direct employment, the value to the economy, the income in terms of exports as well as based on taxations:

Direct Employment: In Australia, gaming machines are found in locations such as taverns or pubs, clubs as well as casinos (though in Western Australia, they’re only permitted within casinos). When discussing direct employment in relation to the gaming machine industry, this extends to persons such as those who manufacture the gaming machines, the licensed staff who install them as well as the persons who service these gaming machines. Based on the report, the analysis relied on were estimates of direct employment based on studies carried out in locations such as Tasmania and South Australia. Based on the report, the direct employment ascribed to the electronic gaming machines in casinos was assessed for manufacturers to be at 2052 employees, the employees in casinos to be at 1884, whereas those in pubs and clubs assessed at 42724. With the increased growth and interest in gaming machines, these numbers will have considerable risen by 2019.

Increased economic value: By economic value, this refers to how the gaming machine industry increased the value of the Australian economy, the CIE evaluated this through gross outputs at the basic prices as against the intermediate consumption at the prices of the buyers or through including the wages, taxes as well as the gross operating surplus as against the production subsidies. The report measured the value added to the economy by the gaming machine industry based on manufacturing (which involves producing and maintaining the machines) as well as recreational basis (through wagering done by customers at gaming machines in clubs, pubs, hotels, casinos). It was also estimated that the gaming machine industry contributed approximately the sum of $8.3 billion to the Australian economy, with majority of the value generated from the recreational use of the gaming machines across clubs, pubs, hotels and casinos.

Exports: The CIE estimated the income from exports based on two particular factors: the machines which got manufactured to be exported as well as how gaming machines were used by foreign travellers in clubs, hotels, casinos. The report estimated that the exports attached to the manufactured machines was evaluated to have raked into the Australian economy the sum of up to $199 million, whereas the exports that were linked to the use of these machines by foreign tourists and travellers was estimated to be up to $85 million.

Tax revenue: In countries that legalize gaming and the likes, this is usually a very good source of revenue. In Australia, the total tax raked in from the production and the recreational use of electronic gaming machines was reported to be approximately $5.5 billion.

If extensive details are taken into account, the economic contribution of the Australian gaming industry will definitely be wider than reported, as the reports by the CIE are based on the direct estimates of how electronic gaming machines had impacted Australia and did not rely on other wider economic impacts such as indirect employments or factors such as the consumer surplus profits. It may be difficult to perfectly and completely capture the exact effect or impact that the gaming machine industry has had on the Australian economy; however, based on the collected reports by the CIE, the gaming machine industry is one that is flourishing and booming and is a good source of revenue for the Australian economy. You can find more relevant industry and business related nuggets here.

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