Gambling is a social activity in which individuals participate in wagering something of value on a chance to win. In addition to financial benefits, gambling can also offer psychological benefits. Among these are enhanced self-concept and sense of connectedness, and reduced social isolation.
Despite their positive impacts, gambling has negative effects as well. These impacts can occur at the individual, interpersonal, and community or society level.
Studies have documented these impacts, but they have also had difficulty defining and measuring them. As a result, researchers have developed a conceptual model to help analyze the social impacts of gambling.
A common method used to assess the impact of gambling is economic cost-benefit analysis. This type of analysis considers the harms caused by gambling, and assigns a value to intangible harms such as pain and suffering.
The problem with this method is that it neglects the benefits of gambling. Although arbitrary monetary amounts are hard to quantify, the positive effects of gambling can still be identified.
In fact, there is evidence that a significant amount of consumer surplus is generated from gambling. According to a study conducted in Australia, the industry generated $8-$11 billion per year. But these numbers underestimate the true costs of gambling.
The majority of gambling employees are low-skilled and low-paid. Therefore, these industries are prone to staff turnover, decreased productivity, and higher operating costs. Small businesses are particularly vulnerable to these issues.
Another approach to gambling impact assessment is a public health approach. By assessing the impact of gambling across a spectrum of severity, this approach can better determine which policies have the most positive effect on reducing the impact of gambling.