Economic impact of illegal gambling (Cuba)

In Cuba, commercial gambling is prohibited. Any casinos, bets and paid lotteries exist only in the shadows - from "home" tables and pain to offshore online sites. The economic effect of such a market is fundamentally different from the legal one: income is concentrated among the organizers, and costs are dispersed among households, the community and the state. Below is a systematic analysis where a "shadow" is born, who pays for its consequences and how the economic logic of districts and tourist zones changes.

1) Cash flows and "leaks"

Cash and P2P: quick settlements reduce the footprint, but increase the risk of theft/extortion and make a consumer dispute impossible.

Offshore/crypto: part of the rates flows abroad, forming a net leak of currency without counter imports of goods.

High margin organizer: "house rules" are opaque, RTP and coefficients are arbitrary → structural minus for the player, the local multiplier is weak.

2) Fiscal losses and "dead" turnover

Taxes are not collected: there are no licenses and declarations → the budget loses potential revenues from both GGR and profit/salaries.

Shadow quasi-taxes: "commissions" to intermediaries and non-payment of winnings are actually a "penalty for credulity" that does not turn into public goods.

3) Enforcement costs

Raids and investigations: burden on the police and courts, confiscations, storage of evidence.

Administrative costs: monitoring of "gray" points, preventive campaigns, technical blocking of offshore companies.

Opportunity cost: resources are moving away from other priorities (domestic crime, road safety, etc.).

4) Households: microfinance and debt spirals

Shifting costs: "game" spending displaces food, medicine, education of children.

Debts from acquaintances/intermediaries: increased conflicts, blackmail and violence; formation of non-bank "credit chains."

Risk of addiction: loss of labor discipline, reduced productivity, growth of hidden unemployment.

5) Local economy and entrepreneurship

Negative multiplier: win/lose does not turn into an investment - it "burns out" in cash turnover and leaks.

Gray competition: "room" points draw cash from the legal night economy (cafes, concerts, crafts), without paying for the safety and improvement of the area.

Reputational risk of quarters: a drop in family tourism, an increase in transaction costs for legal business.

6) Tourism and country brand

Repelling a responsible tourist: rumors of underground, fraud and "indoor games" worsen reviews.

Shift in demand: instead of predictable spending on culture/gastronomy, some visitors look for "monetary emotions," enhancing the criminogenic environment - harm to the image and repeated visits.

7) Digital shadow: offshore sites and mobile "casinos"

Cyber risks: phishing, Trojans, theft of cards and documents hit private savings.

Financial locks: delays/non-payment turn deposits into "dead" assets; the chargeback doesn't work.

Burnout effect: Small but frequent micropayments wash out the budget without creating local value.

8) Social and health costs

Mental health: Anxiety, depression, family conflicts → hidden health care costs.

Stigma and legal tails: Participation/mediation protocols/convictions reduce labor mobility, reducing the future tax base.

Vulnerable groups: poor households and young people suffer the greatest damage - a regressive effect.

9) Balance of benefits and costs (for key actors)

Actor	Short-term benefits	Long-term costs
Organizers/intermediaries	High margin, cache	Risks of criminal prosecution, confiscation, violent conflict
Players	Emotion, rare winnings	Financial loss, debt, loss of trust/reputation
Communities	"Cheap" entertainment nearby	Crime, falling environmental quality, outflow of family tourism
State	Episodic confiscations	Persistent fiscal losses, control costs and social impacts

10) Scenario analysis of the scale of damage (qualitatively)

Conservative scenario (foci of shadow): small checks are sore, episodic "indoor" games → economic damage manifests itself as dispersed poverty and local conflicts; fiscal losses are moderate but persistent.

Baseline scenario (mixed): stable pain + offshore "electronic" leakage → the share of irretrievable household losses and currency leaks is growing; the burden on law enforcement is increasing.

Stress scenario (offshore surges): short-term growth of deposits in offshore/crypto → peak of non-payment, growth of fraud claims, deterioration of tourist reputation; after the raids - a sharp rollback, but the "scars" of the families remain.

11) Indicators for monitoring (without legalization)

Number of raids/seizures and dynamics after prevention campaigns.

Anonymous surveys: Proportion of households with "gaming" spending and debt

Cyber fraud signals: complaints about "mirrors," theft of cards/accounts.

Travel Review Profile: Frequency of references to "underground gaming/cheating."

Local indicators of disadvantage: conflicts, P2P disputes, an increase in petty street crime.

12) Harm reduction measures (within the framework of the ban)

1. Financial literacy: simple calculators "how much is a habit," visual stories of non-payment.

2. Anti-fraud and cybersecurity: campaigns against "mirrors" and fake wallets; consultation hotlines.

3. Community alternatives: tournaments without money (sports, board games), cultural evening programs in tourist zones.

4. Support for addicts: anonymous mutual assistance groups, access to consultations, family protocols ("budget agreement").

5. Point control: prioritizing the suppression of organized networks and intermediaries instead of "hunting players" in order to reduce violence and corruption incentives.

6. Communication for tourists: clear disclaimers in hotels/guides: "no money," "no bets," "beware of private invitations."

13) What is important for politicians and businesses to understand

Illegal gambling is a negative multiplier: each "underground peso" gives less local value than alternative spending on food, culture and transport.

Shadow rents undermine trust in institutions and commerce; this reduces the investment attractiveness of the districts.

Poor households and the reputation of tourist clusters are the hardest hit - two key resources for future growth.

The economic effect of illegal gambling in Cuba is a concentrated benefit for the few and a dispersed cost for the majority. Currency leaks, fiscal losses, the growth of household conflicts and the deterioration of tourist reputation form a negative net result even with small average checks. In the context of maintaining the ban, a rational strategy is harm reduction: financial education, cyber hygiene, support for addicts, clear communication for tourists and targeted suppression of organizers. So the shadow loses its economic meaning, and communities get a chance for more sustainable and transparent night leisure.