The Hidden Social Costs of Gambling

The social costs of gambling are “hidden” only to the extent that they are often misunderstood or overlooked. Empirical studies (which estimate some, but not all, of the implied social costs of gambling) report that the impact on society of one additional pathological gambler is about $9,393 per year.

Establishing a valid working concept of social costs and benefits is a priority for social policy. A cost is something we give up or pay, lowering our well-being; whereas a benefit is an increase to our well-being. Utility is the term we use to refer to the total cost and benefit we experience at some moment. When we engage in a wise trade—paying a cost to acquire a benefit—it raises our utility; otherwise we would refuse to make the trade.