Kessel was a pretty awful place. When Glitterstim Spice was discovered there, it was thought to be a magical substance that could cure all kinds of disease. Also, it got you really high. Not surprisingly, demand was very high for the substance. Mining companies moved in, but the street value of the planet also attracted drug lords and other assorted scum. The Republic didn't want to deal with a costly and pointless war on drugs, so they moved swiftly and took complete control over the mining operations, and declared the planet to be Republic property. Rather than paying expensive unionized miners, the Republic merely assigned the captured drug lords, and other prisoners, to the mines. The free labor really pushed up the profits, and for awhile, the Spice trade was completely funding the government. Unfortunately some housewives and squares pushed to make Glitterstim illegal. After the bill was passed, people were basically being punished for using the drug by being forced to mine it in a prison facility. The production of the drug fell, as a lot of it was being used before it made it off the planet, and a lucrative smuggling market opened up. At any given time, there were so many smugglers on Kessel that a very successful TGIFridays opened there.
Nobody really lived there except prisoners, and nobody cares about them.