Masters Degrees (Economics)

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Browsing Masters Degrees (Economics) by browse.metadata.advisor "Black, Philip A."

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    The Cape Town International Convention Centre : a positive economic impact created through the legalisation of gambling
    (Stellenbosch : University of Stellenbosch, 2004-04) Voges, Pierre; Black, Philip A.; University of Stellenbosch. Faculty of Economic and Management Sciences. Dept. of Economics.
    ENGLISH ABSTRACT: The legalisation of gambling in South Africa was perceived by many as an unnecessary vice that would bring social decay in a country that is already battling to cope with a wide array of social woes, such as unemployment, crime, etc. Anti gambling protestors argued that South African society is not sufficiently developed to cope with an industry that diverts money from normal household budgetary expenditure patterns to the many forms of gambling that suddenly became legal. Protestors also argued that gambling tax is just another tax on an already overtaxed society. Many of these arguments were justified and the legalisation of gambling was clearly an issue, which had to be dealt with carefully. Politicians, the custodians of a well-managed political system through pro-active policies that will be to the benefit of a country and its people were in a particularly difficult position with the creation of a legalized gambling industry and had to weigh policy between the advantage of additional tax revenue and the disadvantage of adding to the social ills of South African society. In terms of the Constitution of South Africa gambling was a concurrent competence and the respective provinces had an opportunity to develop gambling policy that will be beneficial to the relevant province. Although the national Gambling Act provided the broad parameters in which provincial legislation had to be developed, provinces had ample opportunity to be innovative in respect of provincial gambling legislation. After the legalisation of gambling provinces moved quickly to ensure that casinos were developed, mainly to create a larger revenue base through gambling tax. Most provinces were cash-strapped, as their share of the national budget was not sufficient to deal with the long list of provincial development priorities. A way had to be found to supplement the national government contributions and gambling tax was an attractive option. The Western Cape Province moved somewhat slower in the promulgation of provincial gambling legislation. There was a clear realisation that gambling was going to have a massive social impact on the population of the Western Cape and therefore had a clear objective to find ways to develop casinos in such a way that it would offset the negative impact of gambling. This thesis did not place any emphasis on the quantification of the social impact (such as lack of productivity, loss of employment, bankruptcy, domestic violence, divorce, etc). The objective was to show that the allocation of a gambling licence could be used to create infrastructure that is not linked or related to a casino. Such infrastructure is normally in high demand in cities or regions, which are emerging as tourist destinations, but the infrastructure would not be developed by the government, as the capital cost is too high, nor by the private sectors as the profit margins are too low. The Western Cape used its allocation of five casino licences in terms of the National Gambling Act to create an impact on the whole of the region by dividing the province into five regions and allocating a casino licence to each of the regions. Since 1994 Cape Town and the Western Cape have gained prominence internationally as a tourist destination. It was soon clear that the city and region would not be able to cope with the influx of tourists due to a lack of hotel rooms and other tourism infrastructure. It was also clear that the tourism industry would not show the required growth without facilities, such as a convention centres. It is particularly a convention centre that became an urgent element in Cape Town as convention business has become a rapidly growing business with a potentially significant impact in terms of convention expenditure and the resulting economic impact on a city. The Western Cape developed gambling policy determinations made it clear that in the case of the five regions, casino bid companies were obliged to include tourism infrastructure that would add value to a particular region. It was made clear that such infrastructure should not necessarily be linked with a casino and could be off-site. The policy determinations were clear in its stipulations that stand-alone casinos would not be entertained in the adjudication process. The development of an international convention centre became an important criterion in the allocation of a casino licence in the Cape Metropole. Although casino bid companies included different kinds of infrastructure in their bids (mostly projects that would have a positive impact on tourism) the development of an international convention centre became a strong factor and the casino licence for the Cape Metropole was allocated to the company that included the development of an international convention centre in the their casino bid application. Although convention centers are rarely profitable they are known to change the face of cities and regions in terms of their economic impact, not only the impact in terms of urban renewal opportunity, but also attracting domestic and international convention center delegate expenditure and the expenditure on hotels, food and beverage, transport, and general tourism expenditure. The direct, indirect and induced economic impact of this expenditure in the Western Cape and Cape Town result in the off-setting of the negative social impact and ensure that the benefits of the legalisation of gambling is extended to projects that would be unlikely developments in the absence of a casino licence allocated. The study undertaken demonstrates the economic impact (direct, indirect and induced) of the Cape Town International Convention Centre. It also shows the impact of the center on the promotion of tourism, including convention center delegates returning to the Western Cape for leisure purposes in the future. It culminates in the conclusion that the allocation of a casino licence should not only be the development of a stand-alone casino, but also the creation of tourism infrastructure that offsets the negative impact of gambling.