The Economist Debates, Gambling, and Empirical Evidence

The Economist hosts Oxford-style debates on its website and this week they are discussing whether gambling should be legalized. Radley Balko, a well-known libertarian is on the side arguing in favor of legalization, and Les Bernal, the director of an anti-gambling interest group is arguing against legalization.

In the opening remarks, Balko focuses on the classic decriminalization argument that criminalization leads to underground markets, which in turn fosters crime and wastes police resources. He also states that gambling doesn't create any victims because the participants act voluntarily, and we as a society shouldn't ban the decisions of consenting adults when there is no harm to others. Bernal, on the other hand, focuses on the predatory practices of the casinos and appeals to the parental instinct of wanting the government to protect predisposed gamblers from themselves. Both are framing the debate in general policy terms and the role the government should play in regulating conduct. Neither tend to focus on historical data or empirical evidence of their claims.

I'm frustrated that Les Bernal did not mention any of the findings in Earl Grinols book, Gambling in America: Costs and Benefits. Contrary to what Balko thinks, gambling isn't like any other consensual crime. As a general rule, when formerly illegal activities are removed from underground markets (black market, drug market) the costs to society become alleviated. However, gambling is the complete opposite. When gambling is legalized, the social costs skyrocket. Crime increases, business and employment costs rise (lost productivity, lost time, embezzlement), bankruptcy rates increase, suicide rates increase, mental illnesses increase, social service costs rise, additional regulatory costs, family costs (divorce, separation, spousal abuse) rise. If you think I'm making this up, read chapter seven of Grinols book. And I'm not even mentioning the economic burdens of gambling (hint: they increase when gambling is legalized). In sum, Grinols found:

What are the benefits and costs of moving from a policy of no casinos on one
hand to the alternative policy of free-entry, laissez faire regarding casinos on
the other? Based on available numbers, costs exceed benefits by a factor
of more than 3:1. (Grinols, at 131.)

I'm not arguing against the legalization of gambling from a moral point of view. I also ascribe to the belief that "people should be free to do what they want, as long as it doesn't harm others" and I don't think a moral objection to conduct by itself is enough to create legislation. But here, legalized gambling does harm others. The evidence proves it. How else can you explain the cyclical history of gambling being legalized, then subsequently banned, over and over again? One generation thinks like Balko, and then the next sees the corruption and harm it brings, leading to an eternal circle-jerk where we never learn from history...or empirical evidence for that matter.

It's amazing that a 26 year-old, who is studying 10-12 hours a day for the bar exam, can come up with a better argument than the opponent in this debate. Does empirical data, instead of talking points, matter anymore?

**Edit note: I typed separate paragraphs in the body, yet blogspot doesn't know how to create them. Time for wordpress.