Let’s Meet in the Middle on Casino Economics

Potential casino construction tends to bring out the fringe, and the fringe, most always, are the loudest shouters. Casinos incite gambling and gambling, as one fringe will tell you, is bad. The other fringe will undoubtably claim that the new casino will spur exponentially increasing economic growth, so it’s good. Who are we supposed to give credence to? The answer, and this is the case for most hot button topics, is neither group.

No one can argue that pathological gambling can be quite serious. It’s debilitating for the individual and it consumes their relationships, both personal and professional. It’s certainly not something to be taken lightly. However, because the study of gambling in an economic sense is so young, it’s very hard to get an accurate picture of the overall social cost of gambling addiction.

Something to think about though, and thanks to this Forbes article for tipping me off to this, is whether our concerns are founded. Here is a chart for the top economic social burdens according to the WHO (not the band):

Now, obviously gambling is not on there. It’s not fair to make a straight comparison between pathological gambling and anything on this list. This is mainly because, while problematic, gambling addiction simply is not as rampant as any of these on a global scale.

I will use this to make another point, however. Obesity is third on that list. When analyzing the top economic burdens of the world, obesity is just behind war and terrorism. That’s right, war and terrorism. So, while it makes little sense to juxtapose gambling addiction with those burdens, what this list does help me to prove is that people are wildly inconsistent with their social concerns.

You see, just a few months ago, McDonald’s broke ground on a new location in my town. No one made a fuss. It receives little to no attention from the local press and never gets so much as a mention in small talk with acquaintances. But why is this? Everyone knows that McDonald’s and fast food restaurants of its ilk offer incredibly unhealthy food options. The meal selections have a direct link to the third largest economic social cost in the world. Why isn’t anyone sounding the alarm, calling their elected officials to stop these harbingers of economic destruction?

It’s because people are ridiculous hypocrites.

Food isn’t as polarizing. Some will simply state that, of course you shouldn’t eat fast food every day or even every week. You can enjoy it once in a while, but do it too much and it can be troublesome and unhealthy. Sounds a lot like how responsible citizens discuss gambling. Simply put, you can’t sound the social cost alarm when it comes to casino construction, but stay mum on other, much more costly concerns.

That doesn’t mean the other fringe is entirely correct. Casinos are not necessarily the bringers of prolific economic expansion that some make them out to be. There are certainly a few markets that not only survive, but thrive on the gambling industry. However, at an individual level, casinos don’t have quite the impact people would have you believe. *In fact, some may actually be a detriment to state revenues. It’s true that casinos do bring about jobs and may potentially provide a boost to the local economy. But whether it is a long term net positive is difficult to determine.

Also, let’s be honest here, casinos are in the vice business. I’m not saying that smoking, drinking, and gambling aren’t fun. I certainly dabble in two of the three from time to time. Nevertheless, these are easy, almost understandable targets for criticism from the other fringe.

So here are my Springer-like final thoughts:

I get why individuals might be hesitant to have a casino near their home. Compulsive gambling is certainly a vital concern, but casinos are not as destructive as some make them out to be. Nor are they as socially salutary as many, including myself, would like to hope. Like most things, let’s be realistic about what they provide. Let’s enjoy them in moderation. And Let’s also do our best to help those that may have a problem participating responsibly.

*Support for my assumptions come from: Prof. Douglas Walker’s “Overview of the Economic and Social Impacts of Gambling
in the United States”

photo credit: Joel Kramer

Note: I am well aware that there are some inherent flaws in the reasoning and logic. Please feel free to call me out on them. I’d like to hear all perspectives