Business & Economy

Bingo halls and casinos: The way to save Venezuela’s economy?

By Sarai Coscojuela

Caracas, Sep 22 (EFE).- The Venezuelan government, involved in a process of economic opening and creating more flexibility, has authorized casinos and bingo halls to operate around the country but several experts do not believe this move will significantly aid the nation’s suffering economy.

Venezuelan economist Manuel Sutherland told EFE that President Nicolas Maduro implemented the measure – contradicting what his predecessor and political mentor, Hugo Chavez, had done 10 years ago – “because he’s in the process of opening things up, in some way, to help the economy recover, although in a very precarious, very improvised way.”

Chavez, who governed from 1999-2013, ordered gaming houses closed, believing them to be – among other things – “houses of ruin,” but now Maduro has authorized 30 casinos to operate around the country, seeing them as an economic life jacket, a view that seems to vary widely from that of the former president.

But, against what many believe, economic Leonardo Buniak told EFE that Maduro’s decision does not necessarily mean that his stance is contrary to that of Chavez.

“For Maduro, it’s necessary and important to open the casinos due to, among other things, the possibility of spurring certain economic activities,” said Buniak, adding that the president is taking steps toward an “accelerated opening” to try and revive the economy “and he believes that this is one way to do it.”

Some experts agree that opening up casinos is not a negative, but rather – according to Sutherland – this type of measure is a private sector initiative and not one coming from the government, which is limiting itself to authorizing their operation.

“The government is not going to invest a single dollar in casinos and isn’t going to buy any infrastructure, so there’s no diversion of resources from one area to another,” he said.

Meanwhile, he added that the move would not have a significant impact on the country’s GDP, although it could help recreate jobs that were lost 10 years ago and result in higher tax revenues on the municipal level.

“Mainly in the country’s interior, casino activity … could generate some taxes … for those municipalities (for) painting sidewalks, remodeling something or planting a tree here and there,” he said.

Buniak said that the initiative could create some 12,000 direct jobs, thus benefiting an equal number of families.

“It’s not going to have an impact on employment in Venezuela, but it’s going to create jobs and that’s positive,” he said.

The economist said that, on the international level, casinos are businesses that generate substantial wealth and pay big taxes, and that money is then returned to society in the form of public services.

There is also the element of social responsibility, where these casinos have the obligation to maintain schools, hospitals and infrastructure.

“The question is whether these Venezuelan casinos are going to have the social responsibility to return to society, to the cities where they’re going to operate, part of the wealth that they’re going to create,” he said.

In January 2020, when Maduro announced the opening of an international casino in the remodeled Humboldt Hotel, located at the summit of El Avila Hill in Caracas, he said that the tax resources collected would be invested in different sectors, including healthcare and education.

However, Sutherland said that this kind of business is difficult to keep financial tabs on because it’s an all-cash operation where there’s little or no accounting, or money is transferred via Zelle or the casinos in some other way avoid paying taxes on their profits. “Thus, it is very difficult to really generate any significant taxes out of it,” he noted.

Buniak said that opening casinos also will not have much of an impact on national or international tourism because just a small portion of tourists travel to visit casinos.

“The tourist is seeking basic services, infrastructure. On the level of tourist infrastructure, the country suffers from big weaknesses, among other things, because there’s no water, electricity or gasoline,” he said.

In Sutherland’s opinion, the casino industry is a sector that can really give the country’s economy a push but “currently no investments are being made in that area because the persistence of legal and political lack of security.”

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