Upon learning the multitude of deceitful strategies that casinos use to improve their business, it is nearly impossible not to feel as though one is being almost forced to spend money the moment one sets foot in a casino. Many would argue that casinos have gone too far, and should be regulated more strictly by the government in order to protect the consumer. The fact that casinos have been allowed to expand into such deceptive and extortionist establishments is, in fact, a reflection of how our society and economy have evolved in recent history. The economic principle of “laissez-faire,” or unregulated free-market economy, is a fundamental part of a capitalist society. During America’s economic growth, the laissez-faire theory was dominant, as opposed to the mercantilist theory, which called for considerable government intervention and was predominant in France, the United Kingdom, and other European nations during their rise to power. Of course, no one can argue that the capitalist, free-market model has not been successful—nearly every developed nation in the world today is capitalist to some degree. Using history as a guide, most economists today would agree that a minimally regulated free-market model is the most viable economic system in the world. However, studying casinos and their use of slot machines provides a unique perspective on this economic system.

In most cases, the minimal government regulation that is required in the free-market system is enacted in order to protect workers or consumers from involuntary exploitation by private enterprises whose only goal is to generate as much profit as possible. In the case of casinos, this is also the case to some extent. However, there is a critical difference. The slot machine is a form of entertainment above all else, and is attractive to consumers for this reason. Basic human psychology defines this entertainment value that people derive from gambling, and one could argue that casinos simply take maximal advantage of it. From this perspective, it seems that casinos are just giving people exactly what they want as efficiently as possible. Every dollar spent is spent completely voluntarily, and people would not pay unless they felt that they were being entertained.

However, one can just as easily take the opposite stance and point out to what extent large casinos are manipulative and deceitful, as we have above. Gambling, some would say, has a serious negative effect on people, especially if it devolves into an addiction. Casinos only exacerbate this problem. When people spend money playing slot machines, they lose money that could have been better spent otherwise, and they may begin to incur debt. Addictions require treatment and have negative impacts on families; all of these effects are what an economist would call “negative externalities,” or negative effects on the economy that act indirectly, and are thus not accounted for in free-market equilibration.

Essentially, then, significant government regulation of gambling and casinos means protecting people from themselves—from their own innate psychology. This raises complex, far-reaching questions about how we, as humans with certain psychological idiosyncrasies, should run our society. Does our ideal society give us everything we desire? If so, we should leave the casinos be; free-market economics dictate that they will only become better and better at entertaining people, at giving them what they want. Or perhaps does our ideal society guide us to the “correct” path, protecting us from vice and other harmful influences? If so, what is the “correct path” for humans to take? Could we all agree on how society should regulate industry to protect us? These are all questions with no simple answer. However, in some sense, implicit in all of these questions is a more fundamental issue—that of materialism in human beings. Is our desire for money and material wealth something innate that every person is born with, as part of their psychology? Or, perhaps, is materialism a desire conditioned by our capitalist society?

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History of Slot Machines

Tracing Technology and its Effects on Slot Machines

The Psychology of the Slot Machine

Analysis of Casino Design

Current page: Casinos and Economics

Social Implications

$pringfield: Gambling and Slot Machines in Popular Culture

Our Experience with an Online Slot Machine Simulator

The Slot Machine: Concluding Remarks

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