Gambling and Economics

Demerit goods are goods or services that have been deemed socially undesirable and over-consume through the political process. Their undesirability is usually due to external costs imposed on society when they are consumed. According to this definition, gambling can be considered as a demerit good.

There are several negative externalities which society will have to experience once gambling is made legal. These include:

Social undesirability:
· Less time spent with families, friends and other useful or healthy activities such as sports, leading to the breakdown of many families.
· Loss of trust and ties between individuals and family members if gambling is problem.
· Gambling may lead to debt and crime once gamblers are desperate for money to continue to gamble.
Economic undesirability:
· Large amount of money will be used in:
· Gambling and not in family living, church, charities
· Treatment of addicted gamblers
· Law enforcement needed
· Controlling potential crime

However, Singapore has recently legalized gambling. This is because the government understands the need for more tourist amenities on par with other popular vacation destinations, as Singapore grows in the tourism sector. As casinos are such amenities, they have been given the green light. The sheer rise in economic status has allowed the country to make some terrific investments in the tourist sector and allows visitors a unique look into the country and culture. With two new casinos in Singapore opening in the next few years and glamorous resorts also planned for simultaneous openings, Singapore is sure to become even more of a bright, shining star in Central Asia’s appeal.

In addition, there are also other external benefits:
Social benefits:
· People feel good about employment
· Gaming may be a good entertainment activity
· People find themselves engaged in activity.

Economic benefits:
· More jobs
· May provide higher wages
· Customers drawn from outside the state
· Support of community through charitable gifts/grants.