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The social cost of gambling in Macao: before and after the liberalisation of the gaming industry

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  • Davis K.C. Fong
  • Hoc Nang Fong
  • Shao Zhi Li

Abstract

This paper analyses the social cost of gambling in Macao before and after the liberalisation of the gaming industry from a welfare economic perspective. We identify seven principal items of social cost relating to gambling and, using data from 2003 and 2007, we calculate that the social cost of gambling in Macao rose by 163%, from US$40 million to US$106 million, during this period. We argue that this sharp escalation is the result of both the increasing gambling supply in recent years and the historical effect of the previous underdeveloped monopoly system. We acknowledge that our calculations are underestimations as a result of data limitation and we expect that the social cost of gambling in Macao will continue to rise in the coming years. Moreover, if the calculation is expanded to include the social costs incurred by tourists, the social cost of gambling in Macao should be much higher.

Suggested Citation

  • Davis K.C. Fong & Hoc Nang Fong & Shao Zhi Li, 2011. "The social cost of gambling in Macao: before and after the liberalisation of the gaming industry," International Gambling Studies, Taylor & Francis Journals, vol. 11(1), pages 43-56, April.
    • Handle: RePEc:taf:intgms:v:11:y:2011:i:1:p:43-56
    DOI: 10.1080/14459795.2010.548393
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    1. Douglas M. Walker, 2007. "The Economics of Casino Gambling," Springer Books, Springer, number 978-3-540-35104-7, June.
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    Cited by:

    1. Tiffany Cheng Han Leung & Robin Stanley Snell, 2017. "Attraction or Distraction? Corporate Social Responsibility in Macao’s Gambling Industry," Journal of Business Ethics, Springer, vol. 145(3), pages 637-658, October.
    2. Heather Markham Kim & Kyuha Cho & Younggin Choi & Junghoon (Jay) Lee & Jinsoo Hwang, 2021. "Corporate Social Responsibility Reporting in the Casino Industry: A Content Analysis," Sustainability, MDPI, vol. 13(20), pages 1-16, October.
    3. Gainsbury, Sally M. & Aro, David & Ball, Dianne & Tobar, Christian & Russell, Alex, 2015. "Optimal content for warning messages to enhance consumer decision making and reduce problem gambling," Journal of Business Research, Elsevier, vol. 68(10), pages 2093-2101.
    4. Gu, Xinhua & Li, Guoqiang & Chang, Xiao & Guo, Haizhen, 2017. "Casino tourism, economic inequality, and housing bubbles," Tourism Management, Elsevier, vol. 62(C), pages 253-263.
    5. Wu, Shou-Tsung & Chen, Yeong-Shyang, 2015. "The social, economic, and environmental impacts of casino gambling on the residents of Macau and Singapore," Tourism Management, Elsevier, vol. 48(C), pages 285-298.
    6. Jian Ming Luo & Chi Fung Lam & Ka Yin Chau & Hua Wen Shen & Xin Wang, 2017. "Measuring Corporate Social Responsibility in Gambling Industry: Multi-Items Stakeholder Based Scales," Sustainability, MDPI, vol. 9(11), pages 1-18, November.
    7. Sao U. Chan & Luis Miguel Dos Santos, 2019. "Probable Pathological Gambling Behaviors in Macau: Social Cognitive Theory Approach," Journal of Social Science Studies, Macrothink Institute, vol. 6(1), pages 22-32, January.

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