Online Gambling Can Bolster the US Economy

Prior to the passage of the Unlawful Internet Gambling Enforcement Act, the online gambling industry boasted that it was a billion dollar industry with 80 percent or more of bets originating in the United States.  A billion dollars that can be used to bolster the US economy at a time when it appears we are nose diving into a recession (assuming there is not one already).

To make matters worse, the US government was recently ordered to pay millions of dollars to the tiny island nation of Antigua, a penalty for its failing to comply with a World Trade Organization decision involving online gambling. 

Regulation could be in the cards as some of the US Presidential candidates have latched onto the concept of online gambling's role in American society as part of a legalized platform.  Republican Ron Paul has denounced any form of Web gambling prohibition.  Hillary Clinton and Barack Obama (a known poker player) have come forward stating they would support a study into the benefits of legalized gambling. 

The benefits are clear, however, as gambling time and time again has shown to be "recession proof".  The billions of dollars leaving US soil can be taxed.  Internet gambling firms would eventually be able to employ those living in the States.

One only needs to look at the online gambling Mecca of Costa Rica to see just how beneficial the industry is.

Since setting up in the Central American nation back in 1997, Internet gambling ventures (most sportsbooks) have employed upwards of 10,000 locals.  Indirectly, the industry single-handedly helped bolster other sectors including technology, real estate, food and beverage, and the list goes on.  If one were to travel to Costa Rica and visit a popular dining spot, for example, chances are there would be at least a handful of online gambling operators patronizing the place.

"And they would be spending large sums of money," says Payton O'Brien, Senior Editor of Gambling911.com.  "These operators pump millions of dollars back into the Costa Rican economy."

Before BetonSports was forced to shut down after the US indicted the company's founder, Gary Kaplan, and CEO, David Carruthers, that firm was among the top five largest employers in Costa Rica.  At its peak, BetonSports enjoyed a workforce of over 1000 people.  It operated in the 9 story Mall San Pedro.  The mall was full of various stores, many of which appealed to BetonSports most college age employees.

"It's a ghost town now!" harped Thomas Jensen, Proprietor of Point-Spreads.com.  "BetonSports employees provided those shops with most of their business."

And there is a reason for this.  The online gambling sector is among the highest paying in Costa Rica. 

"They (the industry) requires a skilled work force knowledgeable in English," O'Brien says.  Hence the reason why the early industry set up shop in and around the local university in San Pedro. 

BetonSports was once a thriving business that helped fuel the Costa Rican economy, adding upwards of 1500 new jobs  

After only one year of operation, success came fast and furious for the early settlers like the original founders of Betmaker.com, Sportbet and BetonSports.  The owners quickly invested a good chunk of their riches in real estate. 

For the founders of BetCRIS, money went towards a brand new 9 story complex that hosts various other industries besides its own.  The fact is that San Jose, Costa Rica could barely keep up with the demand for more office space required by the Web gambling sector. 

Online gambling in many ways illustrates just what is wrong with the US economy today.  Jobs and whole industries are blossoming elsewhere in the world with less and less being fed back into the American economy. 

With a major downturn predicted for the U.S. economy, the world's largest economy, the whole world was feared to be dragged down.

The International Monetary Fund (IMF) chief Dominique Strauss-Kahn said here Saturday he expected a "serious slowdown" in the U.S. economy.

"Whatever the answer is on a recession, what is clear is there will be a serious slowdown" in the United States, the managing director of the IMF told a panel at the annual meeting of the World Economic Forum. He called for a serious response.

As 2,500 political and business leaders gathered at the Swiss skiing resort of Davos, the meeting was clouded by mounting concern over the U.S. economic outlook in the aftermath of the sub-prime mortgage market crisis, with some economists even warning the U.S. economy is headed for a recession.

Strauss-Kahn said the IMF was scheduled to update its economic forecasts next week, which is certain to have a lower growth figure for the U.S.

As to emerging economies like Costa Rica, taken by some as a substitute support of the world economy, Strauss-Kahn said though they would largely perform well, it was unlikely for them to be immune from the U.S. slowdown as their links with the U.S. economy do exist.

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Christopher Costigan, Gambling911.com Publisher CCostigan@CostiganMedia.com

Originally published January 27, 2008 2:31 pm EST