Social Costs of Online Gambling from an Economic Perspective

Over the years, a number of studies have been conducted regarding online gambling in other to figure out how it affects economy and society in general.

Some of the main costs identified by the different studies on the social front include:

  • Increased cost of social service
  • Psychological illnesses
  • Suicide
  • Bankruptcy
  • Employment and business costs
  • Rise in crime

On the economic front, governments and entrepreneurs have enjoyed rising revenue, which has spilled over into government or private funded structural development in host cities.

However, the cases of gambling addiction have drawn comparisons with alcohol and drug abuse. There is the well documented case of UK finance advisor Justyn Larcombe who got into gambling after seeing an advertisement.  He bought into the idea of making some pocket money with gambling.

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Before becoming a gambler in September of 2009, he was the owner of a townhouse in Ashbourne which was valued at £450,000 and he had a lucrative job with an insurance broking firm in London. Justyn began working from home as he got more involved with gambling so as to have enough time to focus on his addiction. This was how he began to spend hours each day gambling online on different sports such as rugby, tennis and football games. He didn’t stop betting until the family savings was used up and the house got sold.

Unfortunately, Justyn was caught in the loop that makes problem gamblers believe that they can win back their money. It pushed him into a £100,000 debt and he had to leave his family and move into his mother’s house, miles away from his wife and children.

The UK Situation

Justyn is not alone. In the UK alone, more than 350,000 people are gambling addicts. This can be attributed to the rise of advertising, especially for casual gambling. Causal gamblers stake smaller amounts on bingo sites like those on  However, it is still easy to get addicted as some of the bingo sites have social communities that can be very engaging.

The US situation

The numbers in the USA are not very dissimilar.  Analysts say that in a state like New Jersey where more than 70% gamble, around 350,000 people develop a gambling addiction each year with around 4%-8% of them showing some signs of compulsive gambling.  The existence of the dangers of online gambling addiction hasn’t stopped both Democrats and Republicans from mulling over the possibility of opening up online gambling to a wider audience. People on both sides of the divide agree that it could be what is required to resuscitate the ailing casino industry in the country.

The Canada Situation

Even though gambling operations in Canada are exclusively under the control of the provincial and territorial state governments, more than 3.2% of Canadian adults aged 15-24 are affected by moderate to severe gambling addiction.  The gambling industry in Canada is the largest as it is about the same size as cinema, TV, Music and sports combined.

In summary, online gambling still remains a veritable economic stimulant.  However, more sensitisation is required to make sure the negative social costs are brought down from current levels. If the number of problem gamblers continue to rise unchecked, it may become untenable to prove the benefits of the gambling industry. We could see more countries going the route of cracking down on gambling in the manner being seen in the Philippines under Rodrigo Duterte.