Governments often defend monopolies with claims that they are more effective at preventing gambling-related harms; however, research on this front has produced mixed results.
Casino areas should see reduced retail sales (and tax revenue), due to substitution effects – where consumers opt to spend their money gambling instead of on other activities that contribute to consumption.
Reduced Competition
Since decades, Western gambling markets have been dominated by national monopolies. Their existence was justified on grounds of public good, including preventing problem gambling as well as other social and economic problems. But since joining the EU, free movement of goods and services has called into question these monopolistic approaches to gambling and their viability.
Casinos don’t generate significant economic benefits despite claims by their supporters or the casino industry itself, according to Institute for American Values research. Communities located near casinos tend to suffer lower property values and unemployment increases – all problems which the Institute for American Values pinpoints as related issues. Casinos target low-income workers and draw their revenues mainly from those who can least afford gambling.
Economists typically accept that casino gambling does not increase crime. But this conclusion rests on an incorrect assumption: local residents do not engage in risky behaviors when stakes are high; this neglects to take account of psychological impacts associated with significant wins and losses.
Reduced Inn
Recent studies on casinos have largely focused on their economic impacts; however, less emphasis was given to social and community costs which may be difficult to measure accurately. Yet it remains important that consideration be given to how casino gambling may have an effect on local communities that transcends just economic benefits; its consequences must also be assessed on an emotional, psychological level as well.
Casinos may help to decrease unemployment because they provide employment to residents from local communities; if this doesn’t happen, though, other workers from elsewhere in the region might need to be recruited, leading to further regional inequality.
Some countries have chosen to discontinue their monopoly systems while others continue and expand them in the name of responsible gambling. Therefore, it is vital that we address problem gambling and how monopolies might help combat it.
Reduced Revenues
As part of its justification for existing, the monopoly system often claims that its existence can help prevent gambling-related problems. This claim rests on a widely held understanding that “problem gambling” refers to any difficulty limiting money or time spent gambling or its negative consequences for gamblers or communities (Gambling Research Australia).
Due to a lack of empirical data on this issue, questions remain as to whether monopolistic regimes are indeed capable of mitigating harm levels more effectively than license-based models. To assess these concerns, future studies should compare both of these approaches within and across jurisdictions.
Furthermore, a more holistic approach should be taken towards this issue, including examining the causal link between harm reduction and various regulatory regimes and their regulatory frameworks. This would involve assessing both effectiveness of prevention efforts as well as impact of various factors like pricing, product mix and monitoring protocols as well as potential conflicts of interests or conflict of interests between entities involved. Furthermore, an inclusive view must also take into account differences among gambling industries as well as different methods for defining gambling problems and their prevention.
Increased Problems
Gambling harms can have negative impacts at both an individual and generational levels. On one level, it may alter life courses or create problems that affect future generations; it may also cause social disorganization, financial losses and job losses due to its availability; on another, how gambling revenues are used has an influence as well.
Due to the rise of online gambling and its ability for European operators to challenge national monopolies on regulated markets, many EU countries are reconsidering their gambling laws and policies. Some give up or significantly weaken gambling monopolies altogether while others reform and strengthen them accordingly to meet new challenges.
Finland and Sweden successfully countered the liberalisation trend by placing more focus on problem gambling and stressing the responsible nature of monopoly-based systems. They claimed they are better equipped than private businesses to address gambling-related problems; as a result of these strategies they were able to maintain their monopolies as well as extend them online gambling.
