Drinkers and bettors: Investigating the complementarity of alcohol consumption and problem gambling

Regulated gambling is a multi-billion dollar industry in the United States with greater than 100% increases in revenue over the past decade. Along with this rise in gambling popularity and gaming options comes an increased risk of addiction and the associated social costs. This paper focuses on the effect of alcohol use on gambling-related problems. Variables correlated with both alcohol use and gambling may be difficult to observe, and the inability to include these items in empirical models may bias coefficient estimates. After addressing the endogeneity of alcohol use when appropriate, we find strong evidence that problematic gambling and alcohol consumption are complementary activities.