Gambling is the risky, sometimes addictive activity of betting on events that have an uncertain outcome. This can range from informal wagers between friends (e.g., ‘I bet you can’t finish this project on time’) to more formalised commercial ventures such as sports or casino games. In most cases, the stake – which is the amount of money that the gambler must put at risk – is a sum of cash. But it can also be materials that have a value such as marbles, a game board or collectable items like Magic: The Gathering cards.
In economic terms, gambling can have both positive and negative consequences. It can stimulate local economies by creating jobs, generating tax revenue and attracting tourists. But it can also have social costs such as the emotional pain of family members of pathological gamblers and lost productivity in the workplace by people who are affected by problem gambling. These effects can be difficult to quantify.
A key problem is that gross impact studies tend to focus on benefits and ignore costs, ignoring both real and transfer effects (Fahrenkopf 1995). Moreover, they often lack geographical scope and fail to account for substitution effects, which can occur when expenditures on gambling are shifted from other locally available goods and services.
Moreover, they can miss the extent to which people who gamble may be using gambling as a cover for underlying problems such as substance abuse or mental health disorders. To be effective, treatment must address these underlying issues as well as gambling habits. One such treatment is cognitive behavioural therapy, which can help change unhealthy thoughts and beliefs that contribute to gambling addictions such as believing you are more likely to win than you really are and that certain rituals can increase your luck.