BDI: 3 casinos will create 1,200 new jobs

Business Data Israel: Casinos will generate NIS 117-150 million in state revenues and save $150 million in foreign currency per year.

Establishing three casinos in Israel will create, directly and indirectly, 1,200 new jobs; generate NIS 117-150 million in state revenues; and save $150 million in foreign currency per year, according to a Business Data Israel analysis.

Each casino will employ 200 workers, amounting to 600 direct jobs, and 600 jobs will also be created indirectly. The new jobs will help unemployed persons having difficulty finding work because of a lack of qualifications.

The added state revenues will consist of taxes and royalties from the casino, and from taxes on gambling profits, estimated at $3.8 million per year.

Based on average annual proceeds of $88,000 per employee (the average in British casinos), and assuming that an average casino has 200 employees, the expected annual proceeds are $17.6 million per casino per year. Given the prevailing global 20% profit margin for casinos, each casino will generate profits of $3.5 million per year.

Taxes on labor will total $4.1 million per year, at an average effective income tax rate of 20%, a 5% health tax, and National Insurance Institute payments of 13%.

Taxes on the casinos’ gambling profits are estimated at $18 million per year, assuming that gamblers lose 20% of the amount gambled, and a 25% tax on the casinos’ profits. These taxes will generate a further $5.9 million per casino in yearly state revenue.

These calculations yield NIS 117 million in state revenues, which could rise to NIS 149 million, if the state operates the casinos.

The savings in foreign currency assume that 300,000 Israelis travel overseas to gamble per year, and that gamblers lose an average of $500. Tourists visiting the casinos, for whom there is no current estimate, will provide additional revenue.

BDI general manager Tehila Tamir-Yanay said, “Legal casinos could eliminate the illegal ones.”

Published by Globes [online] - www.globes.co.il - on December 10, 2003

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