Regulation and Taxation of Casinos under State-Monopoly, Private Monopoly and Casino Association Regimes

This paper considers alternative forms of regulation and taxation of the casino sector. The model considers the situation of a typical tourist destination country that is using casinos to attract and entertain foreign tourists. The objective is to invest in the sector efficiently while maximizing the amount of government revenue or profits accruing to the country. The regulator must determine how the price of gambling will be set, how many casinos will be allowed to enter the industry and the form and rates of taxation. Four alternative forms of regulation are considered: price regulation, state-owned monopoly, private monopoly and casino association regulation. Turnover taxes on the amount of funds gambled and also annual taxation of the fixed costs of the casinos are evaluated. Applications of the models are carried out for North Cyprus. The conclusion is that the economic efficiency costs and the revenue losses from the absence of effective regulation in these tourist destinations can be very substantial with welfare costs equal to the approximately 75 percent of the tax revenue generated by this sector. Furthermore it shows that while a tax on turnover can be efficient in the case of a competitive industry or a cartel association form of regulation, it will be distortionary if a multi-plant private monopoly is controlling the sector. In contrast a tax on fixed costs will lead to an efficient result in the case of a competitive industry, but it will lead to economic inefficiencies if the sector is regulated by a casino association that controls the number of casino entering the sector.Casino regulation, taxation, state-monopoly, welfare cost

Regulation and Taxation of Casinos under State-Monopoly, Private Monopoly and Casino Association Regimes

This paper considers alternative forms of regulation and taxation of the casino sector. The model considers the situation of a typical tourist destination country that is using casinos to attract and entertain foreign tourists. The objective is to invest in the sector efficiently while maximizing the amount of government revenue or profits accruing to the country. The regulator must determine how the price of gambling will be set, how many casinos will be allowed to enter the industry and the form and rates of taxation. Four alternative forms of regulation are considered: price regulation, state-owned monopoly, private monopoly and casino association regulation. Turnover taxes on the amount of funds gambled and also annual taxation of the fixed costs of the casinos are evaluated. Applications of the models are carried out for North Cyprus. The conclusion is that the economic efficiency costs and the revenue losses from the absence of effective regulation in these tourist destinations can be very substantial with welfare costs equal to the approximately 75 percent of the tax revenue generated by this sector. Furthermore it shows that while a tax on turnover can be efficient in the case of a competitive industry or a cartel association form of regulation, it will be distortunary if a private monopoly is controlling the sector. In contrast a tax on fixed costs will lead to an efficient result in the case of a competitive or private monopoly cases, but it will lead to allocate inefficiencies if the sector is regulated by a casino association that can only control the number of casino entering the sector.Casino regulation, taxation, state-monopoly, welfare cost

Financial Development, Trade and Growth Triangle: The Case of India

The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.This paper aims to investigate the possible co‐integration and the direction of causality between financial development, international trade, and economic growth in India. Annual data covering the 1965‐2004 period have been used to investigate co‐integration and Granger causality tests between financial development, international trade, and growth after employing unit root tests to see if the variables under consideration are stationary. Results reveal that there is a long‐run equilibrium relationship between financial development, international trade and real income growth in the case of India. Furthermore, unidirectional causality was investigated that runs from real income to exports and imports, from exports to imports, M2 and domestic credits, from M2 to imports, from imports to domestic credits. Bidirectional causality has also been obtained between real income and M2, and between real income and domestic credits. Finally, no direction of causality has been obtained between M2 and domestic credits. This study has shown that the supply‐leading and the demand‐following hypotheses cannot be inferred for the Indian economy alone themselves. And furthermore, the export‐led and the import‐led hypotheses again cannot be inferred for the Indian economy based on the sample period, 1965‐2004. This study is the first of its kind, which investigates the possible co‐integration and the direction of causality between the financial development, international trade and economic growth triangle not only in the case of India but also in the relevant literature to the best of one's knowledge

The Economics of Casino Taxation

In this paper, a model of the costs of a casino is developed that focuses on the implications for economic welfare of different taxation schemes for casinos. The situation being considered is in a country where casinos cater exclusively to foreign tourists. The goal of the country is to determine the maximum amount of taxes that can be extracted from the activities of this sector under different systems of taxation. When the price of gambling is set by regulation above its competitive level, the economic losses created by excessive investment in the sector can be reduced by taxation. A turnover tax on the amount gambled can maximize both tax revenue and the economic welfare of the country. Due administrative constraints, a number of countries rely on the taxation of the casinos’ fixed assets or a combination of a turnover tax and a tax on fixed costs. The model is applied to the situation in North Cyprus. The annual economic efficiency loss from its poorly designed tax policies on casino gambling is estimated to be about 0.5 percent of GDP.Casino, taxation, gambling, tourism, economic benefit

ESTIMATION OF UNDERGROUND ECONOMY IN NORTH CYPRUS: NEW RESULTS WITH MIMIC MODEL APPROACH AND BRIEF MODEL COMPARISONS

This study measures the informal economy of North Cyprus (NC) by using the MIMIC Model Approach. The data, picked up from the website of the North Cyprus State Planning Organization, start from 1977 and go to 2015. Because North Cyprus is a small island, the applicability of different models are discussed and compared. As a conclusion, dynamic MIMIC Model approach has been found to be the most efficient model and the results obtained by using Lisrel 8.7 indicate that if there is an increase in unemployment rate, inflation rate, per capita electricity consumption, total tax revenue ratio, and the number of self-employed people, the informal economy responds to the increase as a rise. On the other hand, there is a negative relationship between the growth rate of employment and real GNP and the informal economy

Regulation and Taxation of Casinos under State-Monopoly, Private Monopoly and Casino Association Regimes

This paper considers alternative forms of regulation and taxation of the casino sector. The model considers the situation of a typical tourist destination country that is using casinos to attract and entertain foreign tourists. The objective is to invest in the sector efficiently while maximizing the amount of government revenue or profits accruing to the country. The regulator must determine how the price of gambling will be set, how many casinos will be allowed to enter the industry and the form and rates of taxation. Four alternative forms of regulation are considered: price regulation, state-owned monopoly, private monopoly and casino association regulation. Turnover taxes on the amount of funds gambled and also annual taxation of the fixed costs of the casinos are evaluated. Applications of the models are carried out for North Cyprus. The conclusion is that the economic efficiency costs and the revenue losses from the absence of effective regulation in these tourist destinations can be very substantial with welfare costs equal to the approximately 75 percent of the tax revenue generated by this sector. Furthermore it shows that while a tax on turnover can be efficient in the case of a competitive industry or a cartel association form of regulation, it will be distortionary if a multi-plant private monopoly is controlling the sector. In contrast a tax on fixed costs will lead to an efficient result in the case of a competitive industry, but it will lead to economic inefficiencies if the sector is regulated by a casino association that controls the number of casino entering the sector

Comparison of Macroeconomic Performance of Selected Asian Countries. An Econometric Analysis of China Economic Growth and Policy Implications

This paper compares the key macroeconomics indicators for the selected countries: China, Malaysia, Indonesia, Korea, Rep. and India and also makes an econometric analysis for China for the period 1961-2007. These countries are chosen on the basis of comparability of data and time without measurement errors. This study also investigates six hypotheses considering the impact of several key macroeconomic variables such as domestic saving rate, domestic investment rate, and volatility of savings, volatility of inflation, growth rate of exports and growth rate of real GNP. By using suitable statistical and econometric tests, this paper finds that prevailing performance of China depends on its superior rates of domestic saving and exports. Policies are also suggested from the differentials between the economic performances of China and other chosen Asian countries

The Economics of Casino Taxation

In this paper, a model of the costs of a casino is developed that focuses on the implications for economic welfare of different taxation schemes for casinos. The situation being considered is in a country where casinos cater exclusively to foreign tourists. The goal of the country is to determine the maximum amount of taxes that can be extracted from the activities of this sector under different systems of taxation. When the price of gambling is set by regulation above its competitive level, the economic losses created by excessive investment in the sector can be reduced by taxation. A turnover tax on the amount gambled can maximize both tax revenue and the economic welfare of the country. Due administrative constraints, a number of countries rely on the taxation of the casinos' fixed assets or a combination of a turnover tax and a tax on fixed costs. The model is applied to the situation in North Cyprus. The annual economic efficiency loss from its poorly designed tax policies on casino gambling is estimated to be about 0.5 percent of GDP