Gambling and the Law of Unintended Consequences

Have you ever been standing down in the hook with a bet in front of you when the dice hit your chips and bounced onto a seven? You didn’t mean for that to happen, and it’s doubtful that the shooter did either. But it happened, and it’s a great example of the Law of Unintended Consequences.

In the social sciences, unintended consequences are outcomes that are not the outcomes intended by a particular action. The unintended outcomes may be positive or negative. I’ve seen the dice bounce off the chips and hit the shooters’ point before. But I don’t recall that happening often, and I remember every time it’s gone the other way.

That’s sort of the way it works with government regulation. It seems like every time there is government involvement or intervention, the long run result is almost always negative. Why is it that whenever the government attempts to get involved in business and free enterprise it always manages to get it wrong? The reason, I think, boils down to that Law of Unintended Consequences. The well-intentioned intentioned fool passes a rule without thinking it through.

Take the nation of Australia as an example. Australia is often cited for its ecological gaffs. For example, consider the introduction of rabbits to Australia. Australia had kangaroos, wallabies, bandicoots, and wombats. It had no rabbits. The idea was to provide rabbits for hunters and trappers. The rabbits would provide meat for the table and furs for trade. It sounded like a great idea. But rabbits have no natural predators in Australia, and they soon overran the bush and became nuisance pests, causing great harm to the environment.

Then there is the cane toad, a monstrous amphibian that weighs in at around four pounds and has a ravenous appetite. Introduced into Australia to control agricultural pests, it turned out that the toads will eat pretty much anything; not just insects, but small birds and mammals, snakes, eggs, and more. They have caused great harm to Australia’s national parks. They are so reviled in Australia that cane toad ‘sports’ have found their way into popular culture; sports such as cane toad golf, cane toad cricket, or cane toad skeet, where cane toads are used as balls or targets. The government encourages more “humane” disposition of cane toads, such as freezing. Then what do you do with them?

The gaming industry, of course, has had its own “unintended consequences” as a result of government intervention. Take, for example, the trend toward putting riverboat casinos in disadvantaged neighborhoods with the idea that somehow it will bring jobs and revitalize the area. I recall a time when my wife and I pulled into the parking lot of one of these casinos. She looked around and said “I remember this place.” I told her she’d never been to this particular casino as far as I knew. She said, “No, I saw it on the TV show – COPS. They were arresting a prostitute right over there.”

Does anyone really believe that introducing casinos into a neighborhood revitalizes that area in the real world? I mean, seriously. Take a look at Atlantic City. Instead of revitalization, you get casinos running “cash your welfare check here and get a free buffet” promotions. Instead of community redevelopment you get the equivalent of “no fly zones” where it is unsafe for anyone to be out at night.

Of course, that is not to say that there have not been gaming regulations that were good for the public. Some sort of regulation of licensing of casinos and operators makes sense to a degree, rules that would keep organized crime out of the business (although some of us have fond memories of the days when the mob ran Vegas). It makes sense to have a regulation regarding the handling of patron complaints. Games should have some sort of standard rules and odds applied with common technical specifications for electronic games. And obviously the state would want some sort of rules on cash handling and accounting for tax purposes. But that’s about it as far as I can see. Why? Because every law passed has unintended consequences. And sometimes the regulators themselves are crooked.