Venezuela authorizes bingo halls and casinos, which Chávez had closed: will they be the salvation of the country's economy?

Venezuela authorizes bingo halls and casinos, which Chávez had closed: will they be the salvation of the country’s economy?

The government of Venezuela, in a process of opening up and economic flexibility, authorized casinos and bingo halls to operate in the country ten years later, but several experts consider that this measure will not significantly affect the economy of the Caribbean nation.

Venezuelan economist Manuel Sutherland explained to Efe that the country’s president, Nicolas Maduro, took this measure, contrary to the one proposed by his predecessor and political father, Hugo Chávez (1999-2013), ten years ago, “because it is in a process of opening up to, in some way, recover the economy, although in a very precarious, very improvised way ”.

Chávez ordered the closure of these gambling houses considering them, among other things, “places of perdition,” but now Mature gave the authorization to 30 casinos to operate in the country, seeing them as an economic lifeline, a vision that is far from that of his mentor.

But, contrary to what many think, the economist Leonardo Buniak explained to Efe that Maduro’s decision does not necessarily mean that he is against Chávez.

“For Maduro it is necessary and important to open casinos because, among other things, the possibility of revitalizing certain economic activities,” said Buniak, who maintained that the president is taking steps of “accelerated opening” to try to revive the economy and believes that this is a way to do it.

A POSITIVE IMPACT

Experts agree that the opening of casinos is not negative, but, according to Sutherland, these types of measures are initiatives of the private sector and not the Executive, which is limited to authorizing openings.

“The Government is not going to invest a dollar in the casino or buy infrastructure, so there is no diversion of resources from one area to another”, he pointed.

He also stressed that it will not have a significant impact on the country’s Gross Domestic Product (GDP), although it can help to recover the jobs that were lost ten years ago and in the collection of taxes at the municipal level.

“Especially in the interior of the country, the activity of the casino could generate some taxes especially for those municipalities, (to) paint a sidewalk, remodel something or plant a tree”, he said.

For his part, Buniak said that this initiative could generate some 12,000 direct jobs, benefiting the same number of families.

“It will not have an impact on employment in Venezuela, but it will generate jobs and that is positive”, he added.

The economist pointed out that, internationally, casinos are a business that generates high wealth for which they pay large taxes that are then returned to society in the form of public services.

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

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

CASINOS ARE NOT ENOUGH

In January of last year, when Maduro announced the opening of an international casino in the remodeled Humboldt hotel, located on top of El Ávila hill, in Caracas, he said that the resources collected would be invested in various areas of the State, such as health and the education.

However, Sutherland said that these types of businesses are difficult to control because, one can “come in and buy five million tokens in cash and not go through the accounting, or make transfers via Zelle or anything that somehow eludes the tribute; so it is very difficult for that to really generate any important tax”.

For Buniak, the opening of casinos will not affect national and international tourism either, because only a small proportion of people travel through casinos.

“The tourist looks for basic services, infrastructure. At the tourist infrastructure level, the country suffers from great weaknesses, among other things, because there is no water, electricity or gasoline,” he stressed.

BIG CHANGES NEEDED

In Sutherland’s opinion, industry is the sector that can truly boost the country’s economy, but “currently no investments are being made in this area because legal and political insecurity persists.”

He ratified that in Venezuela “very big and radical” economic measures are needed for it to grow again.

“You have to look for a macroeconomic stabilization plan, an adjustment plan, an international loan, you have to change a lot of things in Venezuela and obviously the casino is a drop in an ocean of changes that are needed and changes that have not yet come,” he said.

Melissa Galbraith
Melissa Galbraith is the World News reporter for Globe Live Media. She covers all the major events happening around the World. From Europe to Americas, from Asia to Antarctica, Melissa covers it all. Never miss another Major World Event by bookmarking her author page right here.