Tuesday, 14 April 2015

How to Address Problem Gambling

Not long ago I mentioned that government gambling revenues are a sickness without much elaboration. I don't think this actually requires a lot of elaboration. Gambling may be something people enjoy doing, but it is also something that ruins people's lives. Outlawing gambling is a pointless idea that will serve organized crime and increase violence, but promoting it is against societal interest. If people have fun gambling, it's okay that they are having fun, but we don't become a better society by actively trying to make more people have fun gambling.

People often think about how taxes incent individual behaviour. If you take cigarettes that makes people less likely to smoke cigarettes or more likely to smoke fewer rather than more. The flip side of that, however, is that it makes the government want people to smoke cigarettes to get revenue. It shouldn't, but since we vote for politicians who spend money to promote wedge issues instead of voting for politicians who actually represent our interests, more revenue means more money to buy votes which is what politicians want.

Income tax and sales tax are good taxes because no matter how much income tax there is, people will still want income, and no matter how much sales tax there is, people will still buy things. Having governments interested in there being more income and more sales isn't really that destructive since those things are kind of proxies for broader productivity.

Anyway, previously on this blog I have set out social policies for the seemingly intractable problem of reducing problematic sex work while promoting good sex work. Today, I'm going to tell you how to deal with gambling.

Obviously I don't think the government should be making money from gambling, but leaving it totally unregulated for the private sector isn't a great idea. The first part of the solution is product labeling. If someone offers a gambling option it must feature a prominent label that clearly displays both the odds of coming out on top over 100 plays as a percentage, and the average dollars returned per dollar spent. A big sign that clearly says, "Every dollar you put into this, we give you 50 cents back."

Next, crack down on loans given by gaming establishments. That's not to say I'd pass a law against giving theses loans, I don't think such a law would be terribly effective. No, they can give the loans all they want. However, I would pass a law that says that any such loan is non-repayable. If you want to extend people credit, that's fine, but if they use any gaming service you provide they simply don't have to pay back the loan. Even if they trick you and circumvent a protection you have in place against allowing people you loan money to to use your gambling product. If you loan someone money, and they manage to somehow gamble with you, even if that was their intent when they took the loan, they money is theirs, you have no legal standing to reclaim it, and they can avail themselves of the police and the courts to protect themselves if you try to pressure them into paying you back. This law would explicitly set a legal test for determining if two organizations - one lender and one gaming outfit - are materially connected, that being whether a reasonable person would see them as connected. Basically, if the you can say "Come on!" then judge can say, "Yup, you got them."

Finally, let's keep the casinos we have and the lotteries we run going. However, they will keep going on a zero-profit model. The games will all pay out 1 to 1. Casinos would still operate at a profit by selling drinks and food and that can be used to defer some of the administration losses from the lottery products.

That's a combination of policies that would really screw with gambling in the province. The incentive to open private gambling establishments would be minimal because they'd be in direct competition with zero profit establishments and wouldn't be able to engage safely engage in usury.

Of course getting rid of those gambling revenues would be extremely painful in for the government in the short run, and would be extremely painful for the people of the province assuming we have a deluded government that thinks that paying down public debt is a good idea. Unlike the sex workers idea, this is totally impractical and implausible.

But I can dream.

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