Conclusion of The Gambling Impact Study in The United States
As the Commission noted earlier, in an ideal environment, policymakers and citizens prudently consider all of the relevant facts before committing themselves and their communities to major courses of action. This should be true for those communities considering the legalization or expansion of gambling activities, as the economic and social impacts of gambling are significant. Unfortunately, this is often not the case for a number of reasons. The amount of high quality and relevant research is extremely limited. The perceived lure of enormous economic benefits and tax revenues leads some to disregard potential economic and social costs. And sadly, today’s political environment places more emphasis on “spin” than it does on facts, and too many of these decisions are turned into high-priced ballot issues.
The Commission fundamentally respects the wisdom of the American people to decide what is best for themselves and for their families. As Thomas Jefferson wrote more than 200 hundred years ago, “I know of no safe repository of the ultimate power of society but the people themselves.” The Commission further values the right of all Americans to make choices regarding the legal activities in which they engage recreationally. The Commission committed our efforts to making certain that both elected officials and their constituents have as much information as possible on this industry from which to make informed decisions. The implications for communities and individuals of introducing, expanding or restricting gambling are far different and more complicated than they were 20 years ago.
In testimony before the Commission in Chicago, Michael Belletire, the Administrator of the Illinois Gaming Board, commented on the difficulties facing policymakers: “Overall, I would observe that riverboat gambling in the heartland has not been as detrimental or as malignant to our social fabric as its critics contend, or as important or as benign as the industry makes it out to be. The answers are not all in and the experience is an evolving one.” In a macroeconomic sense, the Commission agrees with this assessment.
In terms of economic impact, the Commission notes that the conventional way of looking at a particular business activity involves citing statistics such as gross sales, revenues and employment. Strictly speaking, however, these gross numbers do not represent a true calculation of the net benefits to society. In the first place, gross wages and profits tell the whole story only when the resources and workers would not have been otherwise engaged. Secondly, policymakers need to be concerned about the extent to which the economic output of a given activity— especially one that involves a closely regulated business— is greater that the costs that it generates.
Gambling, like any other viable business, creates both profits and jobs. But the real question— the reason gambling is an issue in need of substantially more study— is not simply how many people work in the industry, nor how much they earn, nor even what tax revenues flow from gambling. The central issue is whether the net increases in income and well-being are worth the acknowledged social costs of gambling. After much testimony and a review of the existing economic literature, the Commission has concluded that it is currently impossible to obtain even a rough approximation of a true cost-benefit calculation concerning the economic impact of legalized gambling. The Commission believes that further economic research will help, but also understands that gambling’s impacts are much too complicated for even the most sophisticated economic models.