Gambling monopoly can allow the government to control the direction gambling takes to effectively manage its rewards system. As such, the government can potentially discourage gambling behavior and keep its population within ‘responsible gambling behavior’ brackets.
The gambling industry represents market failure because not everybody benefits from it equally. … The market failure is caused mainly by problem gambling as it leads to a lot of problems including more spending on health care or more crime and fraud. Also the market failure is caused by illegal gambling.
Gambling taxation represents a significant share of State Governments’ own-tax revenue. … In contrast, the Northern Territory, ACT and New South Wales have the lowest taxation rates with revenue from gambling representing less than 20 per cent of expenditure.
Legalized gambling activities act as a regressive tax on the poor (Clotfelter and Cook 1989). Specifically, the legalization of various forms of gambling activities makes “poor people poorer” and can dramatically intensify many pre-existing social-welfare problems.