Earl L. Grinols
Gambling is an activity in which a consideration (something of value) is paid in return for a hopedfor prize (also something of value), the acquisition of which is contingent upon chance (the outcome of a random event). The elements of a lottery and gambling are the same, so that legal prohibitions against lotteries are also prohibitions against wagering and gambling. Investment activities, also involving risk, differ from gambling because investors avoid risk where possible and earn a positive net return on average. In the United States, all states had criminalized gambling—threefourths by constitutional provisions—by 1910. The only active gambling was horse racing on a few tracks in two states. Nevada reversed itself to allow casinos in the 1930s, as did other states in the 1990s. If not for harmful externalities and associated social costs caused by gambling (that is, if A's decision to gamble imposes costs on a noninvolved party ...