CHAPTER SUMMARY. The social costs of casinos are the real resources used to deal with their negative externalities – the harmful by-products of gambling that affect both those who gamble and those who do not – as well as the hard to measure and often immeasurable direct harm done to individuals. This chapter classifies the main kinds of social costs and summarizes what is known about their magnitude. We arrange costs in units commensurable to benefits to answer the following hypothetical question: What are the benefits and costs of moving from a policy of no casinos on one hand to the alternative policy of free-entry laissez faire regarding casinos on the other? Based on available numbers, costs exceed benefits by a factor of more than 3:1. Even when better estimates are available, it is likely that they will show that casinos fail a cost–benefit test.

Riva Wilkinson, wife of the Anoka County, Minnesota, sheriff, was responsible for accounts receivable at the elite Guthrie Theater, a well-known performing arts theater in Minneapolis.