Earl Grinols and David Mustard are economists and like many people, they have an interest in both casinos and crime. In their case, they were specifically wondering if the first was causing the second. According to their research, it is. Eight percent of crimes that occur in counties with casinos are due to legalized gambling. From a financial point of view as economists are comfortable with, the cost of casino-related crime is about $65 per adult per year in these counties. ^[one]

When casinos come to town, the following specific crimes increase:

Robbery (in all three main categories: individuals, houses, cars)

aggravated attack

rape

Crimes in neighboring counties have also increased to a certain extent.

Situation: A casino goer runs out of money after a series of bad cards. She goes out into the street and drops her bag in front of someone from out of town. He takes his back pocket when the knight man bends down to pick it up. With $100 stolen from his wallet, he returns to the casino, spends $40 on hard liquor, loses the rest at the roulette table, and returns home. He wakes up alone, but some underwear he finds on the floor makes him think he probably didn't start the night that way. He can't remember.

Based on the case study “Casinos and Crime”, answer the following questions:

1. Most casino states and counties have laws that protect owners from liability claims for gambling problems. However, from an ethical point of view, if you are the sole owner of the casino, do you feel any responsibility for this part? Why or why not? If you felt any responsibility, to whom would it be? What can you do to make things right?

2. You are an equal partner in a non-profit organization that operates a casino to support the cause of building schools for children in poor areas of Peru. You spend a few months each year building schools there and giving free English lessons. Do you believe that, ethically (and regardless of what the law allows), anyone involved should be able to sue you personally for their suffering? Why or why not?

3. Say that the casino discussed in this series of questions is the MGM Grand Hotel and Casino in Las Vegas, which is owned by a large public corporation. You inherited five shares when a relative died a few years ago. You are legally protected against liability claims. However, do you believe, ethically, that anyone involved should be able to sue you personally - or simply blame you - for their suffering? Why or why not?

4. Pigoulike taxes (named after the economist Arthur Pigou, who pioneered the theory of externalities) attempt to correct externalities and thus formalize a corporate social responsibility by levying a tax equal to the cost of the externality to society. In other words, the casino that causes crime and other problems that cost society, say, $1 million, must pay $1 million in taxes. For casinos, would such a tax more or less satisfy any ethical claim that could be made against them for the social problems they cause? Why or why not?

Answer rating: 100% (QA)

SOLUTION 1 From an ethical point of view as the sole owner of the casino one should feel responsible for the negative consequences of their business o... View the full answer