Monday, March 29, 2010

Micro Wager Sharing -- another form of Micro Profit Sharing


Tapping another unlimited pool of capital for Charity -- the Betting Pool!

Taxing the betting receipts of the Japan Racing Association (JRA) -- a semi-markets-based means to fund charitable activities in Japan

Betting against the micro-debt-laced status quo in microfinance

In addition to the almost unlimited pools of capital discussed earlier in this blog that can be tapped via markets-based mechanisms for charitable or income-equilibration purposes -- (1) the global carbon-trading markets, and (2) consumer discretionary spending -- a third attractive pool is...... (3) betting receipts !

Japan presents a good example in the JRA -- the Japan Racing Association, which controls all betting on horse racing in Japan. To quote the JRA's web site:

"JRA contributes 10% of its turnover to the National Treasury, as well as 50% of any surplus profits remaining at the end of the fiscal year. In fiscal 2007, JRA paid approximately 2,862 million US dollars into the National Treasury, the use of which is specified by law: three-quarters must be designated for improvement of livestock breeding and the remaining one-quarter for public or social welfare."

In short, in 2007 (the latest data available) taxation of betting revenue & profits supplied about US$ 700 million to support charitable organizations in Japan. Thus, every individual bet on a horse in Japan is equivalent to a micro-donation to charity or social programs.

Of course, the involvement of the Japanese government means this mechanism is not completely markets-based; however, bettors in Japan willingly wager their money on the races and willingly lose it to the JRA, to the Japanese government and to downstream charities.

Could more such sin tax-based mechanisms be conceived and used to spread income / donations / wealth more broadly worldwide to elevate the Poor ? Certainly. Let your imaginations run wild...

Aaaaaaand they're off !

David A. Palella
San Diego, California

cell: 619-787-5767
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