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Social and Economic Impact

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Unaffordable Losses: Estimating the Proportion of Gambling Revenues Derived from Problem Gamblers. Rachel A. Volberg, W. Lamar Moore, Eugene M. Christiansen, Will E. Cummings, and Steven M. Banks. Gaming Law Review Vol 2(4), p349 - 360. 1998. This paper reviews the literature on the social costs of problem gambling, identifying "conceptual and methodological flaws that are sufficiently serious as to call the resulting estimates into question." They also review, and reject, attempts to identify the proportion of gambling revenues coming from problem gamblers. Their own data analysis leads to a tentative conclusion that this proportion varies widely from place to place and by type of gaming, stating that "not all forms of commercial gambling are alike in the extent of the negative externalities associated with their operation... ."

Gambling Impact and Behavior Study: Final Report to the National Gambling Impact Study Commission. Dean Gerstein et al. National Opinion Research Center at the University of Chicago. March 18, 1999. Based on a survey of 2,417 American adults, this report attempts an analysis of the economic impact of problem gambling. The authors estimate an annual cost of $5 billion, significantly less than estimates for drug abuse, alcohol abuse, mental illness, smoking, motor vehicle crashes, and several major diseases. They conclude that "the current national economic impacts of problem and pathological gambling are relatively small" but point out the "possibility that the gambling problems are actually reflective of certain underlying inclinations or values of these persons, such as a reduced willingness to abide by social norms or an inclination to take extra risks." The report also contains an analysis of the relationship between casino proximity and various social and economic indicators and two case studies of the effect of a major gambling facility on a community.

Pathological Gambling: A Critical Review. Committee on the Social and Economic Impact of Pathological Gambling, National Research Council. Washington, D.C.: National Academy Press. 1999. This volume presents an exhaustive review of the literature on the prevalence and impact of problem gambling by a committee of experts from a variety of fields. The committee is critical of the methodology employed in many of the studies done to date, concluding that "pervasive methodological problems prevent firm conclusions about the social and economic effects of gambling or pathological gambling on communities, nor can the committee say whether pathological gamblers contribute disproportionately to overall gambling revenues. Similarly, the committee could not determine how legalized gambling affects community or national rates of suicide and crime."

Gambling in America. Commission on the Review of the National Policy Toward Gambling. U.S. Government Printing Office, Oct. 15, 1976. The Commission was created by Congress in 1970 to study all aspects of gambling as it exists in America and to develop recommendations for the States to follow when establishing their own policies. The study found that 67 percent of the American populace gamble. Additionally, gambling is an activity approved of by 80 percent of Americans. The Commission concluded that gambling policy is a matter best left to the individual states and that Federal regulation should only get involved in cases of large-scale illegal activities, organized crime, or when one State's policy is inflicted on another.

The Impact of the Windsor Casino on Adult Gambling in the City of Windsor. Richard Govoni and G. Ron Frisch. The Problem Gambling Research Group of the Psychology Department at the University of Windsor, May 23, 1996. This report is Phase II of a multi-year project to assess the impact of the Windsor Casino on its community. Phase I (pre-casino) and Phase II (post-casino) used the South Oaks Gambling Screen (SOGS) as the basis for measuring recent and lifetime gambling behaviors. A comparison of survey responses of people before and one year after the casino opened showed no statistically significant differences in either Problem or Pathological gambling levels. The casino approval rate increased from 54.2 percent of the population to 65.1 percent one year after the opening, with the disapproval rate decreasing from 30.2 percent to 18.6 percent. The average per capita spending increased from $549 to $599 after the casino opened. Increases in yearly expenditure were not evenly distributed across the sample; the greatest increases were in the highest quartile of expenditure.

 The Social Costs of Gambling: An Economic Perspective. Douglas M. Walker and A. H. Barnett. Journal of Gambling Studies 15:3, 181-212. Fall 1999. Walker and Barnett provide a rigorous framework for the analysis of problem gamblingâs social costs using the perspective of welfare economics. They critique published studies in this field and find them lacking an acceptable definition of what constitutes a true social cost. In particular, they find that social costs are often defined by the authorâs notion of "common sense" rather than an objective definition. They also find that many authors confuse correlation and causality or assume that any social ill correlated with gambling is entirely caused by gambling. These studies "are likely to overstate the actual social costs of gambling." They also explore the social cost of gambling prohibition and the cost of the political process surrounding the legalization of gambling.