Latest AGA white paper outlines the challenges of estimating social costs of gambling

The white paper, “Challenges that Confront Researchers on Estimating the Social Costs of Gambling,” is the latest release in the AGA's 10th anniversary white paper series.

“The issues discussed in this paper are among the most pressing problems that confront social cost of gambling researchers,” writes the paper's author and College of Charleston economics professor Douglas M. Walker “Past studies have not acknowledged these issues, and consequently, their ‘social cost of gambling' monetary estimates have been overestimates.”

Walker suggests four fundamental issues that must be addressed before researchers can truly begin to estimate the social costs of gambling. The four issues are comorbidity, or the idea that many pathological gamblers have other coexisting disorders; survey data validity; measuring government expenditures relating to the treatment of problem gambling and the counterfactual scenario, which refers to “the situation that would have otherwise been.”

“While it is true that there may be social costs associated with gambling, as there are with any type of economic development, this paper very clearly shows there are deep flaws in current estimates of social costs,” said Frank Fahrenkopf, Jr., president and CEO of the American Gaming Association (AGA).

“These are complex issues that don't have easy answers, but the methodological issues outlined in this paper must be addressed by researchers in order for policymakers and voters to have a meaningful debate about social costs attributable to gambling.”

Each white paper in the 10th anniversary research series, started in 2005, is authored by an individual or organization with expert knowledge of the paper's topic and provides either an analytical or broad-stroke examination of a different industry-related subject.

Previous papers have looked at the opinions and job satisfaction of gaming industry employees; Internet gambling; responsible gaming initiatives; indoor air quality and the gaming industry; the impact of various tax rates on capital investment in the gaming industry; and civic leaders' opinions of the gaming industry.

The full text of “Challenges that Confront Researchers on Estimating the Social Costs of Gambling,” is available in the “10th Anniversary Research Series” section of the AGA Web site at www.americangaming.org.