04 February 2013

Gambling on Sports, is it Good for the Economy?

In a word, YES, gambling is good for an economy.   It is spending that might not otherwise take place, and since the gambler has already accepted the likelihood of losing the "stake" the propensity to consume on any winnings tends to be very high.
In an event such as today's Superbowl there is around 100 million dollars gambled legally at the sports books in Nevada alone.

This doesn't include illegal gambling websites, ridiculous prop bets, or the focus of my brief points here, small (or not so small) wagers between friends.

In betting with 3 different people on tonight's game, though shear luck, I won 6 beers to be purchased at local establishments and a gift of small monetary value (around $20) to be purchased on ebay.  The important thing for the economy is that none of this money would have been spent without gambling on the American football game.  When we make small wagers with the aim of making an otherwise fairly pointless sporting event slightly more interesting (tolerable) to sit through, we are essentially increasing both our spending (individually and on an aggregate level), and as I will argue, temporarily increasing our propensity to consume.

Without the Superbowl tonight neither myself nor my "victims" would be spending the small amounts of money necessary to pay off / collect on our wagers.  This extra little bit of money spent at local pubs on a Sunday evening (and on ebay tomorrow) multiplied by the millions of people who bet small amounts on the game with their friends just as I did tonight, has to have a large economic impact.  Instead of staying home and cooking dinner tonight millions of people went out, spent money and left tips.  Assuming some kind of multiplier effect, illegal gambling on the Superbowl is a far more effective economic stimulus than much of what is being discussed in Washington these days.

Gambling revenue / economic activity like all economic activity based upon "vice" continues to drive a significant portion of the American economy.  We are a depressed working class (in many ways), who are getting further in debt, watching inequality in our country skyrocket, and for many of us experiencing chronic un or under employment   Drinking, drugs and gambling continue to be part of the solution for millions of self medicating American proletarians.  American's self medicating actions are always there, they are just more obvious during a large scale sporting event.  It is during events like today's Superbowl, the World Series, the Kentucky Derby, etc. just how much we rely upon the little joys that "vices" bring to continue to stick our heads in the sand about the exploitation taking place all around us, and to us, everyday in our capitalist system. 

As a side note.  I really wanted to bet the "prop" for tonight's game that Jay-Z would show up on stage at half time.  Turned out it was Destiny's Child making a special guest appearance with Beyonce instead.  I'm glad my credit card didn't work on the gambling web-site based outside of US territory or I would have lost my wager.  

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