Wednesday, August 09, 2006

Richard Posner & Gary Becker, on internet gambling

Federal Court Of Appeals Justice Posner says:
Internet gambling establishments have very low expenses, enabling them to offer an approximation to fair odds, and do not require any travel by the gambler. One would think fair odds an enormously attractive feature of Internet gambling to gamblers. At fair odds, which is to say with no loading expense (a gamblers' nirvana that Internet gambling, if allowed to operate without threat of criminal prosecution--which obviously drives up its costs--might approximate), the net utility of gambling soars because there is no longer a net expected financial loss.

Economics Nobel Laureate Becker follows, with:
Governments are concerned about online gambling primarily, I believe, because it threatens the revenue and other political advantages they get from taxing and tightly regulating various forms of gambling.

Supporters of this [gambling prohibition] bill argue that easy access to online gambling is dangerous because it encourages and strengthens gambling addictions. The fact is, however, that gambling is even less addicted than drinking, and is not nearly as addicted as smoking. Moreover, gambling addicts can already find many ways to gamble.

I favor allowing online gambling, given the weak arguments against it, the common human desire to gamble, and also that addictive aspects of gambling are greatly exaggerated. Indeed, I also believe it should remain tax free, along with purchases of other services through the Internet. For tax-free online gambling would put pressure on governments to reduce taxes and various restrictions on lotteries and other forms of gambling. Lower taxes and fewer regulations would give individuals cheaper access to ways to satisfy the mainly harmless desire to play games for money, and to bet on sporting and other events, including lotteries.

I have updated my Friends of Tradesports list, accordingly.

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