2. Where does the gambling surplus come from? Outline of a theory of asymmetric market
Gambling is a source of funding for public services, charged from the operators in the form of taxes, fees, or as direct contributions toward good causes. This funding comes from the gambling surplus that operators collect from gamblers in excess to the cost of providing the games. It has not disappeared as commercial gambling has developed into an industry that offers not only lotteries, charity raffles, and bingos but mostly fast games with high event frequencies and high return rate.
This presentation outlines a theory of gambling as an asymmetric market. Information, the transaction itself, and the position of buyers and sellers contradict the norm of equivalent exchange.
Both marginal utility theory and labour theory of value conclude that gambling is a transfer rather than exchange, but they differ on the substance of the value transferred, the former assigning it to preferences, the latter to the exertion on human effort in work.
My theory argues that if the asymmetries were eliminated, gambling would stop altogether.