Advertisement

Casinonomics pp 153-175 | Cite as

The Social Costs of Gambling

  • Douglas M. Walker
Chapter
Part of the Management for Professionals book series (MANAGPROF)

Abstract

Perhaps the most controversial issue surrounding the casino legalization debate is the “social costs” that accompany gambling. The casino industry maintains that its product is simply a form of entertainment like going to movies and football games, and consumers are willing to pay a price for entertainment. But many researchers argue that gambling is fundamentally different from other forms of entertainment because gambling, unlike movies and football games, can lead to addiction. As noted in Chap. 10, the prevalence rate of disordered gambling has been estimated to be between 0.4 and 2.0 % of the general population.

Keywords

Problem Gambling Social Cost Pathological Gambler Government Spending Indifference Curve 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

References

  1. ACIL Consulting. 1999. Australia’s gambling industries: A submission to the Productivity Commission’s inquiry into Australia’s gambling industry.Google Scholar
  2. Anielski Management Inc. 2008. The socio-economic impact of gambling (SEIG) framework: An assessment framework for Canada: In search of the gold standard. Inter-provincial consortium for the development of methodology to assess the social and economic impact of gambling.Google Scholar
  3. Barnett, A.H. 1978. Taxation for the control of environmental externalities. Ph.D. dissertation, University of Virginia, Charlottesville, VA.Google Scholar
  4. Barnett, A.H. 1980. The Pigouvian tax rule under monopoly. American Economic Review 70: 1037–1041.Google Scholar
  5. Barnett, A.H., and J. Bradley. 1981. An extension of the Dolbear triangle. Southern Economic Journal 47: 792–798.CrossRefGoogle Scholar
  6. Barnett, A.H., and D.L. Kaserman. 1998. The simple welfare economics of network externalities and the uneasy case for subscribership subsidies. Journal of Regulatory Economics 13: 245–254.CrossRefGoogle Scholar
  7. Baumol, W.J., and W.E. Oates. 1988. The theory of environmental policy, 2nd ed. New York, NY: Cambridge University Press.CrossRefGoogle Scholar
  8. Becker, G.S. 1968. Crime and punishment: An economic approach. Journal of Political Economy 76: 169–217.CrossRefGoogle Scholar
  9. Bhagwati, J.N. 1983. DUP activities and rent seeking. Kyklos 36: 634–637.Google Scholar
  10. Bhagwati, J.N., R.A. Brecher, and T.N. Srinivasan. 1984. DUP activities and economic theory. European Economic Review 24: 291–307.CrossRefGoogle Scholar
  11. Boreham, P., M. Dickerson, and B. Harley. 1996. What are the social costs of gambling?: The case of the Queensland machine gaming industry. Australian Journal of Social Issues 31(4): 425–442.Google Scholar
  12. Browning, E.K. 1999. The myth of fiscal externalities. Public Finance Review 27: 3–18.CrossRefGoogle Scholar
  13. Carbaugh, R.J. 2004. International economics, 9th ed. Mason, OH: South-Western.Google Scholar
  14. Clement, D. 2003. Gambling: A sure thing? In Fedgazette. Minneapolis, MN: Federal Reserve Bank of Minneapolis.Google Scholar
  15. Collins, D., and H. Lapsley. 2003. The social costs and benefits of gambling: An introduction to the economic issues. Journal of Gambling Studies 19: 123–148.CrossRefGoogle Scholar
  16. Dixit, A., and G.M. Grossman. 1984. Directly unproductive prophet-seeking activities. American Economic Review 74: 1087–1088.Google Scholar
  17. Eadington, W.R. 2003. Measuring costs from permitted gaming: Concepts and categories in evaluating gambling’s consequences. Journal of Gambling Studies 19: 185–213.CrossRefGoogle Scholar
  18. Gazel, R.C. 1998. The economic impacts of casino gambling at the state and local levels. Annals of Economic and Social Measurement 556: 66–84.Google Scholar
  19. Goodman, R. 1994a. Legalized gambling as a strategy for economic development. Northampton, MA: United States Gambling Study.Google Scholar
  20. Goodman, R. 1994b. Testimony and prepared statement. In U.S. House (1995), “The national impact of casino gambling proliferation,” pp. 4–8 and 56–70.Google Scholar
  21. Goodman, R. 1995a. Legalized gambling: Public policy and economic development issues. Economic Development Review 13: 55–57.Google Scholar
  22. Goodman, R. 1995b. The luck business: The devastating consequences and broken promises of America’s gambling explosion. New York, NY: The Free Press.Google Scholar
  23. Grinols, E.L. 1994a. Bluff or winning hand? Riverboat gambling and regional employment and unemployment. Illinois Business Review 51: 8–11.Google Scholar
  24. Grinols, E.L. 1994b. Testimony and prepared statement. In U.S. House (1995), “The national impact of casino gambling proliferation,” pp. 8–11 and 71–76.Google Scholar
  25. Grinols, E.L. 1995. Gambling as economic policy: Enumerating why losses exceed gains. Illinois Business Review 52: 6–12.Google Scholar
  26. Grinols, E.L. 2004. Gambling in America: Costs and benefits. New York: Cambridge University Press.CrossRefGoogle Scholar
  27. Grinols, E.L., and D.B. Mustard. 2001. Business profitability versus social profitability: Evaluating industries with externalities, the case of casinos. Managerial and Decision Economics 22: 143–162.CrossRefGoogle Scholar
  28. Grinols, E.L., and D.B. Mustard. 2006. Casinos, crime, and community costs. The Review of Economics and Statistics 88(1): 28–45.Google Scholar
  29. Grinols, E.L., and J.D. Omorov. 1996. Development or dreamfield delusions? Assessing casino gambling’s costs and benefits. Journal of Law and Commerce 16: 49–87.Google Scholar
  30. Gross, M. 1998. Legal gambling as a strategy for economic development. Economic Development Quarterly 12: 203–213.CrossRefGoogle Scholar
  31. Harberger, A.C. 1971. Three basic postulates for applied welfare economics: An interpretive essay. Journal of Economic Literature 9: 785–797.Google Scholar
  32. Hicks, J.R. 1940. The valuation of the social income. Economica 7: 105–124.CrossRefGoogle Scholar
  33. Johnson, D.B. 1991. Public choice: An introduction to the new political economy. Mountain View, CA: Bristlecone Books.Google Scholar
  34. Kaldor, N. 1939. Welfare propositions of economics and interpersonal comparisons of utility. Economic Journal 49: 549–551.CrossRefGoogle Scholar
  35. Kindt, J.W. 1994. The economic impacts of legalized gambling activities. Drake Law Review 43: 51–95.Google Scholar
  36. Kindt, J.W. 1995. U.S. national security and the strategic economic base: The business/economic impacts of the legalization of gambling activities. Saint Louis University Law Journal 39: 567–584.Google Scholar
  37. Kindt, J.W. 2001. The costs of addicted gamblers: should the states initiate mega-lawsuits similar to the tobacco cases? Managerial and Decision Economics 22: 17–63.CrossRefGoogle Scholar
  38. Krueger, A.O. 1974. The political economy of the rent-seeking society. American Economic Review 64(3): 291–303.Google Scholar
  39. Ladd, H.F. 1995. Introduction to Panel III: Social costs. In Casino development: How would casinos affect New England's economy? ed. R. Tannenwald. Boston, MA: Federal Reserve Bank of Boston.Google Scholar
  40. LaFalce, J.J. 1994. Opening statement. In U.S. House (1995), “The national impact of casino gambling proliferation.”Google Scholar
  41. Landsburg, S.E. 1993. The armchair economist. New York, NY: Free Press.Google Scholar
  42. Layard, P.R., and A.A. Walters. 1978. Microeconomic theory. New York, NY: McGraw-Hill.Google Scholar
  43. Lesieur, H.R. 1995. The social impacts of expanded gaming. In Future of gaming conference.Google Scholar
  44. Lesieur, H.R. 2003. Email message to W. Eadington.Google Scholar
  45. Manning, W., E. Keeler, J.P. Newhouse, E. Sloss, and J. Wasserman. 1991. The costs of poor health habits. Cambridge, MA: Harvard University Press.Google Scholar
  46. Markandya, A., and D.W. Pearce. 1989. The social costs of tobacco smoking. British Journal of Addiction 84: 1139–1150.CrossRefGoogle Scholar
  47. McCormick, R.E. 1998. The economic impact of the video poker industry in South Carolina. Report prepared for Collins Entertainment.Google Scholar
  48. McGowan, R.A. 1999. A comment on Walker and Barnett’s “The Social Costs of Gambling: An Economic Perspective”. Journal of Gambling Studies 15: 213–215.CrossRefGoogle Scholar
  49. McGowan, R.A. 2001. Government and the transformation of the gaming industry. Northampton, MA: Edward Elgar.Google Scholar
  50. Mueller, D.C. 1989. Public choice II. New York, NY: Cambridge University Press.Google Scholar
  51. National Gambling Impact Study Commission. 1999. Final report. Washington, DC: Author.Google Scholar
  52. U.S. House of Representatives. 1995. Committee on small business. The National Impact of Casino Gambling Proliferation. 2nd sess, 103rd Congress. 21 September 1994.Google Scholar
  53. National Opinion Research Center. 1999. Report to the National Gambling Impact Study Commission. Chicago, IL: Author.Google Scholar
  54. National Research Council. 1999. Pathological gambling. Washington, DC: National Academy Press.Google Scholar
  55. Nower, L.M. 1998. Social impact on individuals, families, communities and society: An analysis of the empirical literature. St. Louis, MO: Washington University.Google Scholar
  56. Office of Planning and Budgeting. 1995. Casinos in Florida. Tallahassee, FL: Author.Google Scholar
  57. Politzer, R.M., J.S. Morrow, and S.B. Leavey. 1985. Report on the cost-benefit/effective-eness of treatment at the Johns Hopkins Center for Pathological Gambling. Journal of Gambling Behavior 1(2): 131–142.CrossRefGoogle Scholar
  58. Posner, R.A. 1975. The social costs of monopoly and regulation. Journal of Political Economy 83: 807–827.CrossRefGoogle Scholar
  59. Single, E. 2003. Estimating the costs of substance abuse: Implications to the estimation of the costs and benefits of gambling. Journal of Gambling Studies 19: 215–233.CrossRefGoogle Scholar
  60. Single, E., D. Collins, B. Easton, H. Harwood, H. Lapsley, P. Kopp, and E. Wilson. 2003. International guidelines for estimating the costs of substance abuse. Geneva, Switzerland: World Health Organization.Google Scholar
  61. Sloan, F.A., J. Ostermann, G. Picone, C. Conover, and D.H. Taylor. 2004. The price of smoking. Cambridge, MA: MIT Press.Google Scholar
  62. Tannenwald, R. (ed.). 1995. Casino development: How would casinos affect New England’s economy? Boston, MA: Federal Reserve Bank of Boston.Google Scholar
  63. Task Force on Gambling Addiction in Maryland. 1990. Final report. Baltimore, MD: Maryland Department of Health and Mental Hygiene.Google Scholar
  64. Thompson, W.N. 1996. An economic analysis of a proposal to legalize casino gambling in Ohio: Sometimes the best defense is to NOT take the field. Las Vegas, NV: UNLV working paper.Google Scholar
  65. Thompson, W.N. 1997. Sorting out some fiscal policy matters regarding gambling. Paper presented at the Southern Economic Association meeting.Google Scholar
  66. Thompson, W.N., R.C. Gazel, and D. Rickman. 1997. Social and legal costs of compulsive gambling. Gaming Law Review 1: 81–89.CrossRefGoogle Scholar
  67. Thompson, W.N., R.C. Gazel, and D. Rickman. 1999. The social costs of gambling: A comparative study of nutmeg and cheese state gamblers. UNLV Gaming Research & Review Journal 5: 1–15.Google Scholar
  68. Thompson, W.N., R.C. Gazel, and D.S. Rickman. 1996. The social costs of gambling in Wisconsin. Policy Research Institute Report.Google Scholar
  69. Tollison, R.D. 1982. Rent seeking: A survey. Kyklos 35: 575–602.CrossRefGoogle Scholar
  70. Tullock, G. 1967. The welfare costs of tariffs, monopolies, and theft. Western Economic Journal 5: 224–232.Google Scholar
  71. Viner, J. 1931. Cost curves and supply curves. Zeitschrift für Nationalökonomie 111: 23–46.Google Scholar
  72. Walker, D.M. 2003. Methodological issues in the social cost of gambling studies. Journal of Gambling Studies 19(2): 149–184.CrossRefGoogle Scholar
  73. Walker, D.M. 2004. Kindt’s paper epitomizes the problems in gambling research. Managerial and Decision Economics 25(4): 197–200.CrossRefGoogle Scholar
  74. Walker, D.M., and A.H. Barnett. 1999. The social costs of gambling: An economic perspective. Journal of Gambling Studies 15(3): 181–212.CrossRefGoogle Scholar
  75. Zorn, K. 1998. The economic impact of pathological gambling: A review of the literature. Bloomington, IN: Indiana University.Google Scholar

Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  • Douglas M. Walker
    • 1
  1. 1.Department of Economics & FinanceCollege of CharlestonCharlestonUSA

Personalised recommendations