Gambling is a game in which players wager something of value on a random event with the intent of winning something else of value, typically money. The game can involve any number of things, including the outcome of a sports event, lottery ticket, dice game, or offtrack betting.
The costs associated with gambling can vary widely depending on the type of gambling, time, and venue. Costs can also be difficult to measure, as the effects of gambling may ebb and flow with changes in the economy and other factors.
A few studies on the economic effects of gambling attempt to make estimates. These studies generally employ a variety of methodologies, but many fall short in terms of assessing benefits and costs.
These studies are mainly descriptive in nature, identifying benefits and costs of gambling (Grinols, 1995; Aasved and Laundergan, 1993). They may not distinguish between direct and indirect costs, assuming the cost of pathological gambling is simply a transfer from one group to another (e.g., an increase in debt incurred by pathological gamblers).
Economic impact analysis is the best way to assess these costs and effects. It takes into account a number of economic factors, including real costs versus economic transfers, tangible and intangible benefits, present and future values, direct and indirect effects, and gains and losses experienced by different groups. Benefit-cost analysis should be a key approach in evaluating the economic effects of pathological gambling, and more research is needed to develop a more rigorous and accurate methodology.