Estimates of the proportion of gambling revenues derived from problem gamblers represent an important element in the rational calculus of public gambling policy. However, a critical concern in calculating such estimates is the accuracy of self-reported expenditure data. In this paper, we review an emerging literature on estimating the proportion of expenditures from problem gamblers for different types of gambling, with a focus on the relationship between self-reported estimates and known spending. We then examine recent national survey data pertaining to this matter. After detailing several of the challenges in the effort to assess self-reported expenditures on different types of gambling, we recommend some methodological improvements that can be made in response to these problems. Copyright © 2001 John Wiley & Sons, Ltd.

Together with estimates of the costs associated with treating problem gamblers and dealing with the disruption they cause, estimates of the proportion of revenues derived from problem gamblers represent one of the most important factors in the calculus of rational public policy in this controversial field. In this paper, we first present a review of the literature on the social costs of problem gambling, including several studies that have examined the contribution of problem gamblers to gambling industry revenues. We then present an approach that we have developed and provide illustrations from two different United States jurisdictions. We then look at the relationship between reported and actual expenditures to assess the reliability of the approach we have developed.Our review of the existing literature on the social costs of problem gambling discloses conceptual and methodological flaws that are sufficiently serious as to call the resulting estimates into question. Tentatively, we conclude that the proportion of gambling revenues derived from problem gamblers can range widely and depends on variables that include the menu of gambling games available in a market area, the prize structures of these games, and the length of time the games have been operating. The results of this paper indicate that not all forms of commercial gambling are alike in the extent of the negative externalities associated with their operation, a widespread assumption that seriously impedes the formulation of rational public policy in this field.

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Some form of commercial gambling is legal in almost every state of the Union, reflecting substantial consumer demand for these activities. Yet gambling is regarded by policymakers, the media, and the public as an industry that is different and not subject to the economic laws that govern other industries. However, by examining gambling through standard measures such as consumer spending expressed as percentages of personal income, job creation, and gambling privilege tax receipts, it can be determined that gambling industries are not operating independently of the larger economic context. One of the fastest-growing sectors of the general economy, gambling accounts for about 10 percent of leisure expenditures.

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