Economic aspects of gambling regulation: EU and US perspectives

Abstract

Discusses and uses a range of methodologies for assessing costs and benefits from the introduction of sixteen new casinos in the United Kingdom following the Gambling Act 2005. Estimates that when the proposed new casinos are built and fully functional, they will contribute a total of £7.3bn - £10.1bn benefits to consumers in terms of consumer surplus and taxation per year, assuming all consumers are treated as rational. Assuming that problem gamblers are not rational (their received benefit is priced lower than their expenditure), the amount of benefits from gambling falls to £3.7bn - £4.7bn. Costs vary depending on the same rationality assumption. Assuming problem gamblers are rational, social costs are estimated at £362m - 481m per year, assuming they are completely irrational at £560m - 1.7bn per year. Concludes that cost-benefit analysis can aid regulatory decision making in the UK.

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