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1. Gambling in fact has many negative externalities. If someone gets addicted, the likelihood is much higher to be depressed. Depression is factor, which leads to high costs for the society.
2. Gambling addiction leads to economic costs because of crime actions. Other market actors have to increase their security standards, which means higher costs.
3. Many gambling addicts go as a consequence to jail. Jail means EXTREMELY high costs to society.
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I do not agree with 3, gambling and jail are not that related.
Yes, gambling has many negative externalities, it is well know. It is particularly troublesome in the physical location of the gaming since it attracts the type of cohorts that live sucking of sucking the blood from the fortunate players. It is also linked to alcohol, drugs, prostitution, etc... Yet it is an economic activity so it also bring employment and benefits and it is not that different from many other activities with strong negative externalities, such as mining, nuclear energy, plastic production just to mention a few. Even cars pollute.
I am not quite sure if this has been posted or answered here, but it would be interesting to know if there have been any studies done on whether there is a higher positive correlation between gamblers and jail time than between non-gamblers and jail time. Intuitively I would expect there is a higher positive correlation, but I would be interested in knowing by how much if that is the case. Does anyone know anything about that?