Another problem is that higher taxes on the legal product drives people to the illegal tax-free market. This has certainly been the case for tobacco, where some countries, including Canada, are estimated to see 50% illegal sales. We really don’t know the true volume of tobacco use in the country, but we only measure part of it. Ditto for cannabis, where the legal stuff struggles to replace the illegal. In both cases, some argue that the higher cost of the legal stuff reflects better quality control and therefore lower risk to the consumer, but it seems the customers are willing to accept the risk (if any) in exchange for lower prices. And yes, the government established price is a money grab, well beyond the true cost of regulating the manufacture and distribution.
Revenue from gambling taxes is derived from a very disturbing source. In my opinion all ads for gambling, similar to any form of advertising for tobacco, should be banned on the grounds that gambling is a malicious vice dangerous to mental health and financial well being.
I agree. I grew up in the 60’s, and can remember my parents buying the occasional ticket on the Irish Sweepstakes, which seemed to be illegal. Then the feds got into the lottery business - it started off as an infrequent thing, maybe semi-annual or quarterly, with a single prize awarded on a live TV broadcast. Even then, I would argue with my father about why he was wasting his hard-earned money on something feeding the government coffers, where his chances of winning were so slender. He told me he was “buying hope”, which I took to be a sad commentary on his world view, given that we were middle class, better off than most of his ancestors, and certainly not deprived of anything essential to the enjoyment of life. Since then, of course, the lottery business has become massive. If you look at the government revenues from gambling and divide by the number of citizens old enough to gamble legally, you come up with a pretty significant average annual expenditure. According to Google’s AI…
- 20% of gamblers account for 70% of the revenue, with habitual gamblers spending upwards of $2,500 per year
- working class individuals in financially stressed households average $400 per year
- single men average $615 to $765 per year
The long and the short of it is that government is taking money from people who can ill afford it, preying on their addictions. I’m a doctor, and I can argue that alcohol and drug use, including nicotine, can have individual benefits in low to moderate doses, but I struggle to see any benefit to gambling. Most people lose. The “hope” is an illusion. The anticipatory pleasure is far-outweighed by the disappointment of losing, especially when coupled with the inevitable financial stress.
Government should never have gone into the gambling business. The illegal side of it was puny, compared to the massive government-sponsored version we have now.
Tobacco, by the way, is harmful, but the reason people keep smoking relates to their nicotine addiction. Nicotine isn’t any more harmful than caffeine, to which many of us are addicted. However, government goes out of their way to block access to nicotine (vapes, pledgets, etc.) while continuing to profit from cigarette sales.
Toss in prostitution and hard drugs and you have the government in competition with organized crime which is no stretch. Bankrupt welfare / nanny states need revenue and so called sin taxes deliver but how much net revenue do they collect when factoring in the health care and other "social costs" related to the so called sins? Socializing the costs while profiting from the sales may not deliver revenue while encouraging irresponsible behavior. Banning their use or driving the cost to where the underground economy takes over has been tried with bad outcomes which continue to this day.
Another problem is that higher taxes on the legal product drives people to the illegal tax-free market. This has certainly been the case for tobacco, where some countries, including Canada, are estimated to see 50% illegal sales. We really don’t know the true volume of tobacco use in the country, but we only measure part of it. Ditto for cannabis, where the legal stuff struggles to replace the illegal. In both cases, some argue that the higher cost of the legal stuff reflects better quality control and therefore lower risk to the consumer, but it seems the customers are willing to accept the risk (if any) in exchange for lower prices. And yes, the government established price is a money grab, well beyond the true cost of regulating the manufacture and distribution.
Revenue from gambling taxes is derived from a very disturbing source. In my opinion all ads for gambling, similar to any form of advertising for tobacco, should be banned on the grounds that gambling is a malicious vice dangerous to mental health and financial well being.
I agree. I grew up in the 60’s, and can remember my parents buying the occasional ticket on the Irish Sweepstakes, which seemed to be illegal. Then the feds got into the lottery business - it started off as an infrequent thing, maybe semi-annual or quarterly, with a single prize awarded on a live TV broadcast. Even then, I would argue with my father about why he was wasting his hard-earned money on something feeding the government coffers, where his chances of winning were so slender. He told me he was “buying hope”, which I took to be a sad commentary on his world view, given that we were middle class, better off than most of his ancestors, and certainly not deprived of anything essential to the enjoyment of life. Since then, of course, the lottery business has become massive. If you look at the government revenues from gambling and divide by the number of citizens old enough to gamble legally, you come up with a pretty significant average annual expenditure. According to Google’s AI…
- 20% of gamblers account for 70% of the revenue, with habitual gamblers spending upwards of $2,500 per year
- working class individuals in financially stressed households average $400 per year
- single men average $615 to $765 per year
The long and the short of it is that government is taking money from people who can ill afford it, preying on their addictions. I’m a doctor, and I can argue that alcohol and drug use, including nicotine, can have individual benefits in low to moderate doses, but I struggle to see any benefit to gambling. Most people lose. The “hope” is an illusion. The anticipatory pleasure is far-outweighed by the disappointment of losing, especially when coupled with the inevitable financial stress.
Government should never have gone into the gambling business. The illegal side of it was puny, compared to the massive government-sponsored version we have now.
Tobacco, by the way, is harmful, but the reason people keep smoking relates to their nicotine addiction. Nicotine isn’t any more harmful than caffeine, to which many of us are addicted. However, government goes out of their way to block access to nicotine (vapes, pledgets, etc.) while continuing to profit from cigarette sales.
Toss in prostitution and hard drugs and you have the government in competition with organized crime which is no stretch. Bankrupt welfare / nanny states need revenue and so called sin taxes deliver but how much net revenue do they collect when factoring in the health care and other "social costs" related to the so called sins? Socializing the costs while profiting from the sales may not deliver revenue while encouraging irresponsible behavior. Banning their use or driving the cost to where the underground economy takes over has been tried with bad outcomes which continue to this day.
I doubt it 'worked' for tobacco consumption either, given the healthy black market for cheap cigarettes.