Economic Costs of Gambling

[passwordnow]

It is a profitable business that's why we see casinos keep on establishing themselves and there will always be the new casino that has been made. If it's not profitable then it won't be noticed by other businessmen. There's a strategy that those players who are making their lives through it and have already dedicated themselves to gamble as much as they can. There must be something that we don't know but if they're making their lives better from it, there's no need to question them if they're doing it legally.

You are right. Gambling as a profitable business attracts people who have a lot of money to create their own casino and each of them will have their own strategy to invite a gambler or more to playing gambling at their site. It does not just happen to online gambling, but it also happens in offline casino and will establish their reputations better.

It needs awareness from the gambler not to become addicting to gambling. They can play gambling anytime and in any casino they want, but they must always control themselves and leave the place as soon as possible before something worst happens.

But not as the old casinos are becoming successful with the newer casinos that come. Only a few of them survive and strive to enter the competition because it's tough this time as gamblers are staying to specific casinos where they've experienced good and quality service for the games of their choice. There's always been a reminder to gamblers that they should gamble moderately and it's an individual problem if they don't stop when they're losing a lot already.

[1715010768]

1715010768

[1715010768]

1715010768

[1715010768]

1715010768

[Rengga Jati]

For the negative sides, yeah, gambling is really bad for the economic costs and makes the financial system of somebody worse day to day. Moreover, if they cannot manage or control themself in gambling, low self-management, risk, and also fund management. And many people with gambling addictions will experience those three bad sides of gambling for economic costs.
Furthermore, if someone has been addicted to gambling, it is surely difficult to make them go outside to have good social activities with others. They may prefer to play gambling, whatever happens, expecting big bonuses or winning to have every day, but the result is nothing.
Stressful, addiction, criminal are the result of negative gambling sides that always ahppen

[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!

Since it takes extensive research to come up concrete numbers I think we can't say gambling taxes collected by the government aren't enough to cover costs with problem gamblers. This industry profits a lot of money. Most people will never see such amounts of money during their life, so it's even harder to have some notion about this huge income application.
It's also hard to have notion regards the number of gamblers who will create such issues for the society. There are many people involved on this market and only a minority of them will present negative behaviors. Moreover, many addicted gamblers are rich people who can't control themselves. I think it's unlikely they will start robbing people or stores around to keep gambling.

I just saw I forgot to add that it does of course depend on the country and the tax laws. In some countries there is no tax whatsoever on gambling while in others there might be a pretty high tax. What is even more important is from what angle are you looking at the problem? Nationally? Globally? Here is why it is important:

First of all I would say that intuitively an activity where your loss is my gain and your gain is my pain doesn't sound like it could ever be a net positive in terms of social cost. But apart from that, if we look at a country with a gambling industry (take Nevada, Vegas), of course the statistics will show that Vegas is in an awesome position in terms of social cost. That is the national perspective. But what about the countries that the players came from and spend their money in Vegas? If they win money in Vegas they bring it home, spend it at home and reduce social cost. But no matter how you look at it, it is obvious that that had to come from somewhere in the first place.
So moneys balance can't be the basic measure for social costs here, I think we agree on that.
One of the questions that remains is does the winner spread so much positive energy that his surrounding society becomes more productive, and does that net out or even exceed the serious cost (maybe he lost it all) incurred by the loser? While the marginal effect of joy is strongly decreasing (that is scientifically proven), the loser could literally lose the ground under his feet, become an alcoholic, lose the job and destroy the family, cause the kids to get off track, maybe is forced to attend psychotherapists and what not.

I don't know, just some thoughts on the issue. I wouldn't look at isolated geographical areas. It is like: hey I got some statistics from Monaco, let's see if gambling their supports or undermines the socioeconomic system...

[Darker45]

I do not have the numbers but I think the revenue that majority of the countries derive from gambling is significantly higher than the cost of the services the state provides to the gambling public.

Gambling businesses pay regular taxes to the government. Aside from that, winning gamblers are also paying taxes to the government. On the other hand, what are the specific programs the government spend on for the gambling public? It is not common that a gambler is addicted and is seeking free public professional help. It is also not common for a gambler to get so addicted to the point of committing a crime and gets imprisoned.

[ethereumhunter]

It is a profitable business that's why we see casinos keep on establishing themselves and there will always be the new casino that has been made. If it's not profitable then it won't be noticed by other businessmen. There's a strategy that those players who are making their lives through it and have already dedicated themselves to gamble as much as they can. There must be something that we don't know but if they're making their lives better from it, there's no need to question them if they're doing it legally.

You are right. Gambling as a profitable business attracts people who have a lot of money to create their own casino and each of them will have their own strategy to invite a gambler or more to playing gambling at their site. It does not just happen to online gambling, but it also happens in offline casino and will establish their reputations better.

It needs awareness from the gambler not to become addicting to gambling. They can play gambling anytime and in any casino they want, but they must always control themselves and leave the place as soon as possible before something worst happens.

But not as the old casinos are becoming successful with the newer casinos that come. Only a few of them survive and strive to enter the competition because it's tough this time as gamblers are staying to specific casinos where they've experienced good and quality service for the games of their choice. There's always been a reminder to gamblers that they should gamble moderately and it's an individual problem if they don't stop when they're losing a lot already.

If the casino can survive and succeed in inviting more gamblers to come to their place, they will have a chance to compete with the others. But yes, it is tough if we see the situation now as many casinos do not want to be late to rise again in this pandemic. A gambler should already see many others losing their money in gambling places. So they must have control and always remember that gambling is not for making money, so they must control their money.

[Xinarae*]

The gambling economy around the world is also very large the number of people rushing to the casino with huge amount of money in their pockets is also much higher although there is no government intervention for online gambling casinos cover a large part of the public gambling industry. Apart from this the industry is growing day by day in lottery and house and sports betting and other segments developing countries in asia improve their economies through casinos.

[Reatim]

Hi,




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.

Society ? well it is for the family effect only , and eventually for the community .

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

Yups , the cost will increase once the addiction comes to the max.

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

What are your thoughts on this topic?

and others comes to death mate. and that cost smaller than jailing .

[hahay]

Maybe with the high costs at least the gambler or player will reconsider spending his money in gambling, we know so far the cost to gamble may be relatively cheap so they don't consider it. Yes, if we relate it, it does have a correlation, because with them becoming gambling addicts, of course slowly with the addiction they experience they will have a high cost. Maybe by making high fees many of them will leave gambling, but the consequence is that the gambling industry will probably suffer a decline and therefore, making high fees in gambling seem like something that will not be easy to realize.

[passwordnow]

But not as the old casinos are becoming successful with the newer casinos that come. Only a few of them survive and strive to enter the competition because it's tough this time as gamblers are staying to specific casinos where they've experienced good and quality service for the games of their choice. There's always been a reminder to gamblers that they should gamble moderately and it's an individual problem if they don't stop when they're losing a lot already.

If the casino can survive and succeed in inviting more gamblers to come to their place, they will have a chance to compete with the others. But yes, it is tough if we see the situation now as many casinos do not want to be late to rise again in this pandemic. A gambler should already see many others losing their money in gambling places. So they must have control and always remember that gambling is not for making money, so they must control their money.

The competition has already started when they've entered in the gambling scene. And that's also the start that they are about to add and contribute to the economy because they're going to make money from their gamblers. But if they've failed to make their business became popular as the other casinos then they have to strategized how they're going to maintain their operations and at the same time get as much as customers as they can for which it will fall for a good marketing team.

[AakZaki]

Casinos are really big taxpayers in my country and I think I am not speaking for myself when I say that Asians love gambling because it is an industry here in my country. Plus, the tourism that it provides is also a big help as it bolster the tourism economy of the country which contributes to overall growth of the economy.

In some countries including mine gambling is prohibited. My country is Muslim majority so the country has clearly prohibited it in government regulations. But some people still do it even in secret. In fact, I think that nowadays the world is progressing, many people are participating in online gambling. So I thought collecting taxes from gambling in my country was impossible. There are even reports that some of the perpetrators have been arrested by the police.

With the online casino, now I think it will make it easier for everyone to participate in gambling. This will be easy and invisible to the police. So now gambling fans don't have to gather with cash.

[Sterbens]

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?

Exactly, and this situation is really experienced in my place, the situation got worse when the pandemic hit. Most people stay home and start gambling because of the stress of their job not making any money. in their paradigm gambling can make money instantly. even though without basic knowledge in gambling it is very minimal. unless it has very strong luck.

The psychological level that I often pay attention to is a lot of complaints because they keep losing bets, their wives complain because they don't make money for the risks of daily life, but it's true what you say addiction is a closely related thing in gambling whether it has become an inseparable factor or just a person's emotion that cannot be controlled.

[dothebeats]

Gambling operators would never care for the implications of them just existing and profiting. What's important to them is money, and at the end of the day, they will get it from people that are lowkey having fun and those who are extremely addicted. As long as the industry is thriving, pays their taxes, and does not really do harm that is easily recognizable, the government will allow it—except of course on countries with a firm stance against gambling.

[abel1337]

Gambling operators would never care for the implications of them just existing and profiting. What's important to them is money, and at the end of the day, they will get it from people that are lowkey having fun and those who are extremely addicted. As long as the industry is thriving, pays their taxes, and does not really do harm that is easily recognizable, the government will allow it—except of course on countries with a firm stance against gambling.

I agree, Actually from many years of my gambling experience, I still don't see any casino tell us to slow down from gambling activities and dictate or guide us that gambling is really addictive that it can harm us. It is a business that you won't get anything if you messed up and casino operators really like that as long as the government is allowing them. Still, they are in the right position on doing things as long as they don't do anything illegal. This is also why Countries which is open for gambling tend to have so many casinos.

[yazher]

People who are addicted to gambling always know where to find a gambling site or casino where they will continue to gamble. The threshold is a lot lower at a physical casino. If you have 2 million euros in your bank account, it is more likely to be gambled online than you are using it in a casino. I think that the gambling market has only improved because of corona, seen online. More people at home, and those people think they can earn money by gambling with all the consequences that entails.

I completely agree with this especially those people who know the spot where to go whenever they want to play. It's easy for them since they have lots of contact and other resources to get there. That's right, the number of players has increased since the pandemic has begun where people need to stay at their homes. 

As for the OP, basically, that's the reality when you calculate all of the side effects and I don't think that's all the lists you can provide. I'm sure there are lots more consequences and most of the time the government will take action if the cons will affect them as well. that's the time you will see them raiding illegal casinos and gambling activities. But whenever they will have the upper hand, they won't take action like what you see with the cockfighting, they allowed it because the cons don't affect them anyway.

[peter0425]

The gambling economy around the world is also very large the number of people rushing to the casino with huge amount of money in their pockets is also much higher although there is no government intervention for online gambling casinos cover a large part of the public gambling industry.

Wait , what about no intervention from the government about  Online gambling? who told you that?

governments are running thru online gambling i just don't know if your governmetn do the same thing.

Apart from this the industry is growing day by day in lottery and house and sports betting and other segments developing countries in asia improve their economies through casinos.

Wrong, the countries in Asia is not improving their economy because of gambling instead it is dropping because gamblers are losing their money and only casino operators are gaining here.

[ethereumhunter]

But not as the old casinos are becoming successful with the newer casinos that come. Only a few of them survive and strive to enter the competition because it's tough this time as gamblers are staying to specific casinos where they've experienced good and quality service for the games of their choice. There's always been a reminder to gamblers that they should gamble moderately and it's an individual problem if they don't stop when they're losing a lot already.

If the casino can survive and succeed in inviting more gamblers to come to their place, they will have a chance to compete with the others. But yes, it is tough if we see the situation now as many casinos do not want to be late to rise again in this pandemic. A gambler should already see many others losing their money in gambling places. So they must have control and always remember that gambling is not for making money, so they must control their money.

The competition has already started when they've entered in the gambling scene. And that's also the start that they are about to add and contribute to the economy because they're going to make money from their gamblers. But if they've failed to make their business became popular as the other casinos then they have to strategized how they're going to maintain their operations and at the same time get as much as customers as they can for which it will fall for a good marketing team.

They will use many media promotions to attract attention from people out there, including the gamblers who still search for where they can playing gambling. The important thing here how they can invite the gambler and what type of promotion. The gambler needs to search for the right gambling site to play any game he wants and not all gambling sites can satisfy them. Maybe the gambler will search for the casino to give them a big welcome bonus than the other site.

[mu_enrico]

Any business has externalities, not only gambling. Ask people near a factory, mall, or a big office building on how they pollute the environment. But it will be allowed as long as there is net positive on the economic growth or government revenue.

Casinos often integrated with luxury resort/hotel and mainly serve as entertainment for the rich. Thus the operation will bring in tourists and their money. Also, there are employers who depend on the casino for their living.

+ Taxes
+ Revenue from tourism
+ Employment rate

I still think gambling will boost tourism and grow the economic activity in the area. BUT, the government must educate* locals that gambling is for the rich tourist, not for them.
*not a fan of Monaco's way.

[Kong Hey Pakboy]

Gambling operators would never care for the implications of them just existing and profiting. What's important to them is money, and at the end of the day, they will get it from people that are lowkey having fun and those who are extremely addicted. As long as the industry is thriving, pays their taxes, and does not really do harm that is easily recognizable, the government will allow it—except of course on countries with a firm stance against gambling.

Exactly, they will care much more about profits than the wellbeing of their users because what's the point of curing your customers if them being sick is the way that you can make a lot of money. Also, regarding the economic cost, I think gamblong industry is a big contributor with taxes and tourism, just look at Las Vegas, Macau and Hongkong.

[michellee]

Gambling operators would never care for the implications of them just existing and profiting. What's important to them is money, and at the end of the day, they will get it from people that are lowkey having fun and those who are extremely addicted. As long as the industry is thriving, pays their taxes, and does not really do harm that is easily recognizable, the government will allow it—except of course on countries with a firm stance against gambling.

Exactly, they will care much more about profits than the wellbeing of their users because what's the point of curing your customers if them being sick is the way that you can make a lot of money. Also, regarding the economic cost, I think gamblong industry is a big contributor with taxes and tourism, just look at Las Vegas, Macau and Hongkong.

Yes, both of you are right as long as the casino can attract many gamblers and they can get more money from them. The casino will not care about the addicted gamblers, how they can solve the addiction, and how the gambler can avoid committing a crime. A gambling industry contributes a big income for the government in the country that allows gambling. The casino does not think much about the side effect of the player in the gambling games because they think that is the gambler's responsibility.

[Kakmakr]

You are just focused on the negative externalities and you forget about the positive externalities, namely :

1. Gambling create jobs. (3rd party Slot and Game developers / Gambling hosts / Site admins & Mods... etc)
2. Gambling (licensed sites) pay taxes in a regulated capacity. (Less of a burned on individual tax payers)
3. Gambling sites give sponsorship and donations to charity.
4. Gambling sites make some people rich. (Yes, might be a small percentage, but it happens)
5. Gambling sites give some people entertainment and it helps them with stress. (A lot of people get stressed, when they get addicted) 

So, yes..... there are some positive things that come from gambling too...