The Costs of Legalized Gambling: An Economic Approach
Author(s)
Kindt, John Warren
Abstract
The Unites States entered the twenty-first century in a positive economic mood, notwithstanding the significant market correction that followed. Along with a record bull market and economic optimism, state legislatures and Native American tribal governments propelled a gambling boom during the 1980s and 1990s. This boom has been built largely on two myths. First, gambling invigorates an economy. Second, gambling, remarketed by the industry as “gaming,” is a benign form of family entertainment like theme parks, sports, and the movies. Behind these myths lies the reality that commercial gambling produces several negative externalities. Like the more commonly cited examples of industrial pollution and exhaustion of scarce resources, the effects of gambling on communities extend far beyond the immediate impacts. This extended impact often obfuscates the origin of the problem, leaving cleanup costs to the public sector. This chapter debunks the myths on which the gambling industry has been built, analyzes the interests behind legalized gambling lobbyists and presents in detail the social and economic negative consequences of legal gambling.
