Comment on "Legal Gambling as a Strategy for Economic Development"

Abstract

Gross's arguments are representative of the gambling literature. Unfortunately, many of the accepted arguments against gambling come from incomplete or biased economic analysis. This comment addresses several issues in Gross's article from an economist's perspective. First, Gross's concern for tax revenues (as a benefit) and tax regressivity (as a problem associated with legalized gambling) is unwarranted. Taxes are simply wealth transfers, and regressivity of voluntary taxes is hardly a reason for concern. Second, Gross and many other noneconomists mistakenly believe that exports are necessary for economic growth to occur Certainly, exports cannot be the only cause of growth, because the world economy has grown without exporting anything. Finally, Gross argues that there is no popular support for legalized gambling. But consumers vote with their dollars, and many "votes" have been cast in favor of legalized gambling.

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