Economic Aspects of Gambling

Gambling comprises a variety of games, ranging from various forms of lotteries and sports betting to gambling in casinos. In Austria, gross output of the gambling sector amounted to ATS 12.3 billion in 1995, about 3 percent of total spending on leisure activities in Austria. Gross output of lotteries and casinos totaled ATS 8 billion and 3.8 billion, respectively. Gross value added in the whole gambling sector attained a value of ATS 9.2 billion in 1995, contributing about 0.4 percent to gross domestic product. For most people engaging in games of chance this activity is a form of entertainment, part of leisure activities. Other motives may also play a role, for example economic ones, or the wish to see a dream come true. Winning in games of chance does increase the utility of leisure, but is neither necessary for utility gains nor is it expected by the players. Empirical investigations show that the "entertainment players", just as in other consumers' activities, have a fixed budget. With regard to lotteries, in particular, the entertainment experience linked to gambling has for many people become a standard good and a fixed component of the weekly/monthly consumption pattern. Casinos have become important elements of the touristic supply for certain regions. They are important communication lines for all social strata and are often among those enterprises advancing the regional development. Many economists have stressed the importance of casinos in providing around-the-year employment (stabilization of capacity utilization, reduction in seasonal unemployment), as well as expanding the supply in the entertainment industry. Thus, the casino industry and its services constitute an essential element of the qualitative and structural competitiveness of a region. Casino-style gambling provides high tax revenues and thus increases the volume of tax money that is available for redistribution.Ökonomische Aspekte des Glücksspiels; Economic Aspects of Gambling