Economic Costs of Gambling

[Woodie]

I would like to know what really causes gambling addiction because everywhere in the world of Gambling people will advice
on  how to address Gambling problems and they have gone an extra mile to offer some one to talk to about this problem....so where is the real problem.

Why is it that the negatives were only stated? Gambling is a big contributor a country's economy, think about Las Vegas, Macau and other countries that have been opened and known to be the gambling capitals.

Very true for those running a gambling business am without a doubt that this is a profitable business and to some players they have found a profitable way of playing their favorite games.

[1715562460]

1715562460

[Zilon]

What are your thoughts on this topic?

Gambling addiction is really a call for concern and has cost a whole lot of havoc to societal and economic growth. Lately the rate of gambling addicts is highly on the increase leading to insecurity of lives by this addictors causing negative externalities In my own opinion I would suggest more agencies be set up to help curb this addiction by helping most gambling addicts recover from their addiction before it cost their lives

[Oceat]

I think it's not right to generalized gambling addicts or simply someone is playing gambling is involved in criminal activities. Laws may vary from country to country while all I know if they play gambling on an unregistered casino that's one of illegal or they go to the underground gambling places which is illegal.

There are certain places for people who are addicted to gambling but of course, most casinos nowadays have their own people like that to access someone who is suffering from addiction.

[South Park]

Hi,

in this thread I would like to address a very important topic: Economic Costs of gambling.

From economic theory we know the concept of externalities:

In economics, an externality is a cost or benefit that is imposed on a third party who did not agree to incur that cost or benefit. For the purpose of these statements, overall cost and benefit to society is defined as the sum of the imputed monetary value of benefits and costs to all parties involved.

Source: https://en.wikipedia.org/wiki/Externality



1. Gambling in fact has many negative externalities. If someone gets addicted, the likelihood is much higher to be depressed. Depression is factor, which leads to high costs for the society.

2. Gambling addiction leads to economic costs because of crime actions. Other market actors have to increase their security standards, which means higher costs.

3. Many gambling addicts go as a consequence to jail. Jail means EXTREMELY high costs to society.

What are your thoughts on this topic?

You are not wrong, this is an effect that gambling may have in a low percentage of people, however we need to wonder what is the alternative? To make it illegal? In that case you add even more negative factors, now the games are most likely not fair, people now have to gamble in an establishment that is manged by members of organized crime, no one wins and the few that do have to give back their profits in fear something happens to them, on the other hand if gambling is legal then nothing of the things I mentioned before happens and we get a lot of positive effects, like employment for many people, taxes paid to the government and a reliable way for most people that like to gamble to get their fun in a safe place.

[aioc]

Too much of everything is very harmful and more so on gambling, there are a lot of problems that have an economic cost but the government is allowing it, like smoking, liquor, and even gaming and even things that people think are harmless, they sometimes cost a lot to the society to bear, if the guy is wrecked he will be wrecked in everything he does, in gambling, in gaming in drinking liquor or smoking, we cannot stop people from indulging and blame the government.

[magneto]

I think that this is a very skewed way of looking at it.

These negative externalities only apply to problem gambling. Normal gambling is welfare maximising in that it gives those who consume the product utility in the form of enjoyment/entertainment, with the price paid being the house edge.

Definitely a flawed argument imo. There is no need to slander and generalise the gambling industry as a whole when the vast majority of players are simply in it for fun.

[cabron]

Casinos attract tourists just like Vegas that's surrounded by businesses like hotels, spa, and stores of any kind that provides jobs to people.
That's economic growth but it comes with a price we know that. I sure government departments can handle such.

If you are just going to look at the gambling industry as a cause of a problem that wouldn't be fair for the people in the industry. In fact, some foundations and government projects are funded by casinos.

[MCobian]

Casinos attract tourists just like Vegas that's surrounded by businesses like hotels, spa, and stores of any kind that provides jobs to people.
That's economic growth but it comes with a price we know that. I sure government departments can handle such.

If you are just going to look at the gambling industry as a cause of a problem that wouldn't be fair for the people in the industry. In fact, some foundations and government projects are funded by casinos.

Everything will have a negative effect if excessive, as well as gambling, can cause addiction that will cause problems. But we must also be fair
in our view of gambling, because on the other hand the gambling industry has created jobs and it helps economic growth. And the large
circulation of money in the gambling industry, makes the government get quite a large tax revenue from the gambling industry.
Which can be used to fund several government projects. Therefore, do not continue to judge the gambling industry is a bad thing.
We must be wise in making decisions regarding the gambling industry.

[xSkylarx]

1. Gambling in fact has many negative externalities. If someone gets addicted, the likelihood is much higher to be depressed. Depression is factor, which leads to high costs for the society.

2. Gambling addiction leads to economic costs because of crime actions. Other market actors have to increase their security standards, which means higher costs.

3. Many gambling addicts go as a consequence to jail. Jail means EXTREMELY high costs to society.

What are your thoughts on this topic?

Not all people are like this, there are still many who gambles for entertainment. And for me, the criteria above only apply for people who get addicted in gambling because they are in desperate need of money that they see gambling as a way to make money to surpass their struggle. In the first place, registered gambling casinos help the country's economy and I think they get a lot of tax from these businesses. Casinos or any type of gambling business are not responsible and should not be blamed if addiction in that country increases.

[lienfaye]

What are your thoughts on this topic?

This is not only applied in gambling but in other addictions as well like drugs, liquor etc. Any addictions has a bad effect not only for ourselves but also for the people around us, on the society and the economy. The worse scenarios that can happen if we became addicted in gambling (or in other addiction) are family problem, having debt, committing crimes or having a mental health that can lead to suicide. It has many bad effects but this also depend on how the gambler control himself when playing. Because every gamblers are different in dealing worse situation such as losing their money.

[Wexnident]

1. Gambling in fact has many negative externalities. If someone gets addicted, the likelihood is much higher to be depressed. Depression is factor, which leads to high costs for the society.

2. Gambling addiction leads to economic costs because of crime actions. Other market actors have to increase their security standards, which means higher costs.

3. Many gambling addicts go as a consequence to jail. Jail means EXTREMELY high costs to society.

What are your thoughts on this topic?

Uhm 1, even if we do consider that addiction leads to depression, the ratio between it and other causes of depression seem large enough to completely neglect on how gambling is even a reason for depression.

Both 2 and 3 follow the same idea with one imo. The size between the people affected due to gambling compared to the general size affected due to other reasons is big enough imo that fixing the gambling side wouldn't have any effects even if fixed. The post of Just_alice should be more than enough to back up my argument.

Sure, paint gamblers in a way so that addictive and compulsive gamblers would stop, but it shouldn't be a method to stop the entire industry itself. It's operating in a way that actually helps with the economy after all, speaking from the tax gained from it itself. As far as I'm concerned, there are a LOT bigger problems to be solved before gambling, corrupted government, broken families, financial issues due to corruption, etc. Plus the blame is wrongly placed here ngl, blaming Gambling is not gonna do anything, it's a bloody activity for entertainment after all.

[michellee]

If someone addicted to gambling, he could become depressed and curious why he can not win the games. Yes, gambling addiction can leads someone lives will ruin and it could make his life cost higher as he wants to play gambling and fills his needs. Gambling addicts can go to jail if they commit a crime such as a robbery, steal others money, and else. But gambling addicts can also make someone losing his life because of suicide.

But if someone can manage his money to play gambling, I think he can prevent from becoming addicted and allocate his money to others. I think that will depend on how those people will react to gambling, and if he can control himself not to become addicted, he does not have to worry about other things because he will make sure that playing gambling will not disturb his life.

[Alisha-k]

Hi,

2. Gambling addiction leads to economic costs because of crime actions. Other market actors have to increase their security standards, which means higher costs.

In every society gambling addicts contributes massively to economic and societal crimes this pushes gamblers into diverse criminal activities so has to afford their gambling activities. A whole lot of gambling addicts has lost a whole lot of fortune trying to meet up their game and when the can no longer afford this the begin to engage in criminal activities so as to meet up. This is really eating up our societal norms

[Oshosondy]

I don't think you got my point. I want to focus here exclusively on the economic effects. You just mentioned jobs, this is a very bad argument, because if someone digs random & useless holes in the ground while I pay this person 10 USD is this job really good? Why not giving the 10 USD directy to this person?

If you are talking about how gambling is helping the economy, the only thing you can talk about is job creation, there are many people that will be employed, there are programmers that are also needed and many more. About how it is affecting the life of people negatively, I do not know how it is related to economy.

[famososMuertos]

I do not understand very well why you have to be so punctual with the Gambling, when the economic costs for other events are more damaging, for example someone who steals a candy goes to prison and it is a high cost for the state to have a guy in prison who does a crime, petty theft e.g., in fact it is pejorative to have used "candy" petty theft is more appropriate, but it is so you understand my point of view.

Believe me something, the players/gambling are not a high cost for society,  that it if does exist, but social spending by the state in other areas or citizens who incur negative externalities is greater in other social areas.

In any case, the taxes paid by  industry and by the individuals themselves are part of the solution.

[Smartprofit]

Hi,

in this thread I would like to address a very important topic: Economic Costs of gambling.

From economic theory we know the concept of externalities:

In economics, an externality is a cost or benefit that is imposed on a third party who did not agree to incur that cost or benefit. For the purpose of these statements, overall cost and benefit to society is defined as the sum of the imputed monetary value of benefits and costs to all parties involved.

Source: https://en.wikipedia.org/wiki/Externality



1. Gambling in fact has many negative externalities. If someone gets addicted, the likelihood is much higher to be depressed. Depression is factor, which leads to high costs for the society.

2. Gambling addiction leads to economic costs because of crime actions. Other market actors have to increase their security standards, which means higher costs.

3. Many gambling addicts go as a consequence to jail. Jail means EXTREMELY high costs to society.

What are your thoughts on this topic?

However, gambling has been around for a very long time. 

The Indians of the Mayan and Aztec empires gambled.  Ancient Egyptians and Chinese played.  D'Artagnan and the three Musketeers were also very fond of playing dice.  But these are fictional literary heroes ...

And the real Blaise Pascal and Cyrano de Bergerac, studying the game of dice, formulated the principles of the theory of probability. 

Many people are addicted to gambling.  People need a sense of excitement and drive.  Perhaps gambling reduces stress levels and releases beneficial hormones in people.

[mv1986]

1. Gambling in fact has many negative externalities. If someone gets addicted, the likelihood is much higher to be depressed. Depression is factor, which leads to high costs for the society.

2. Gambling addiction leads to economic costs because of crime actions. Other market actors have to increase their security standards, which means higher costs.

3. Many gambling addicts go as a consequence to jail. Jail means EXTREMELY high costs to society.

What are your thoughts on this topic?

While I do mostly agree with the points you raised, the claims that you made are all fallacious, being a slippery slope.

Any addiction caused to a person has always its negative externalities, not just gambling. While gambling may be considered one of those addictions that are common, you must also consider those other addictions as they contribute to the costs in society.

In addition, while those negative externalities in gambling are present, you cannot escape the fact that gambling brings revenue to the government. The revenue garnered from these gambling establishments enable to government to construct infrastructures which bring positive externalities as a result.

It is thus, imperative to know where to draw the line on how to balance these negative and positive externalities. While the result of gambling addiction is detrimental to the society, we also cannot disregard the financial aspect on how it brings revenue to the government.

Short answer: OP is right and there is absolutely no way the tax raised from gambling could cover the costs society incurs due to gambling/addicts.
Long answer: it requires extensive and fundamental research to actually come up with concrete numbers.

Especially online gambling socially isolates the players. One could argue that the five friends playing poker in the garden having a barbecue is even a net positive to society because of the recreational effect. How recreational the effect still is to someone sitting alone in front of his screen, I don't know.

Anyway, the topic is certainly interesting and a very good idea to look at it from the angle OP brought up!

[acquafredda]

I found a study on estimating the social costs of problem gambling in Italy. As a reference year, based on available data, 2014 was analyzed. In that calendar year, the collection related to public gaming was 84.5 billion euros, of which 7.9 billion euros went to the Treasury. All this against winnings of 67.6 billion and a total expenditure of players of 16.9 billion(Agency of Customs and Monopolies, 2015).
The estimate of social costs obtained in the study amounts to 2.7 billion euros. (Estimated cost per player was €2,211).
Now, imagine what could be done what all that money.

[BTCLiz]

I found a study on estimating the social costs of problem gambling in Italy. As a reference year, based on available data, 2014 was analyzed. In that calendar year, the collection related to public gaming was 84.5 billion euros, of which 7.9 billion euros went to the Treasury. All this against winnings of 67.6 billion and a total expenditure of players of 16.9 billion(Agency of Customs and Monopolies, 2015).
The estimate of social costs obtained in the study amounts to 2.7 billion euros. (Estimated cost per player was €2,211).
Now, imagine what could be done what all that money.

Very interesting! Could you please share the link to the paper? I am very curious how the study design was in this case. It is nearly impossible ti measure all negative externalities 100%, we are dependend on studies like this.

It really gets interesting if we also consider secondary effects, e.g. if a family member gets addicted to gambling and as a consequence you get a depression and so on. So assuming the 2,7 million don't count this into their estimations, we can multiply it with a factor X.

[fullhdpixel]

Casinos attract tourists just like Vegas that's surrounded by businesses like hotels, spa, and stores of any kind that provides jobs to people.
That's economic growth but it comes with a price we know that. I sure government departments can handle such.

If you are just going to look at the gambling industry as a cause of a problem that wouldn't be fair for the people in the industry. In fact, some foundations and government projects are funded by casinos.

Rightly said and having a high economic cost doesn't necessarily mean bad things because having a higher economy certainly defines the standard of the group in the ociety. I mean how do we define some states are rich while others are poor? That is because the average income and hence the expenses are high in those states.

One who spends more will find more ways to earn, that's a fact and one who earns more will impact the society and economy in a positive way. If we didn't have had the hobbies and eagerness to earn more, we won't have all the technologies and advancements we have now days. Raise the bar of the economic costs and people will find a way to match it, as simple as that.