The question of whether legal or state-sponsored lotteries can effectively

substitute for illegal gambling is a complex one, with arguments on both

sides. While advocates of legalization often point to the potential tax revenue
generated by bringing underground activities into the legal sphere, the
reality is more nuanced. This analysis explores the reasons why illegal
gambling may persist even with legal alternatives, examining the incentives
for both consumers and producers in the illicit market.

The Persistence of Illegal Gambling

The primary reason illegal gambling markets continue to thrive despite legal
alternatives is the avoidance of costly rules and regulations. This is a general
principle that applies to many black markets, where participants seek to
operate outside of the constraints imposed by government oversight. In the
case of gambling, the absence of regulations allows for greater flexibility,
including the potential for rigging outcomes.

Unfair Gambles and Profit Maximization

The authors of the provided research paper argue that illegal gambling
operators can exploit the lack of regulation to create unfair gambles, which
are actually profit-maximizing. This is because they can manipulate odds to
favor themselves, especially when they possess superior information or
predictive ability compared to bettors. [1] However, the paper also
highlights that even when bettors have access to the same information,
cheating remains possible. This is due to the fact that bettors themselves
may derive utility not just from winning, but also from the psychological and
non-monetary benefits associated with gambling.

The Role of Bettor Preferences

Bettors may be willing to accept unfair odds because they gain satisfaction
from the act of gambling itself, even if they lose. This suggests that their
preferences are influenced by a combination of winning potential and the
psychological enjoyment of the experience. Gambling operators can
capitalize on these preferences by tailoring their strategies to maximize
profits while catering to the desires of their customers. In this way, cheating
becomes sustainable in equilibrium, as it is supported by both consumers
and producers. [1]

The Soft State and the Challenge of Enforcement

The provided research paper also touches upon the broader context of
governance and its impact on the success of legalization efforts. The author,
Kenneth Arrow, argues that the "soft state" – characterized by weak rule of
law and a marketization of governance – creates an environment conducive
to disorder and undermines the effectiveness of legal regulations. [2] This
disorder can manifest in various ways, including the persistence of illegal
activities even when legal alternatives exist.

The Jueteng 2000 Crisis

The paper cites the "Jueteng 2000" crisis in the Philippines as an example of
how a compromised legal system can facilitate the continuation of illegal
gambling. Jueteng, a form of illegal lottery, thrived despite efforts to
suppress it, highlighting the challenges of enforcement in a "soft state"
environment. The author argues that the legalization of gambling is a
necessary step but insufficient on its own, as it requires a strong and
independent legal system to effectively enforce regulations and deter illegal
activity. [2]

Conclusion: The Need for Comprehensive Solutions

The evidence suggests that simply legalizing gambling may not be enough to
eliminate illegal markets. A comprehensive approach is needed that
addresses both the economic incentives for illegal activity and the
weaknesses in governance that allow them to persist. This could involve:
- Strengthening legal institutions: This includes ensuring that law
enforcement agencies are adequately funded and equipped to enforce
regulations effectively.

- Promoting transparency and accountability: This is crucial for building

public trust in the legal system and deterring corruption.

- Addressing the demand for unfair gambles: This could involve public
education campaigns aimed at promoting responsible gambling habits and
reducing the appeal of illegal options.

- Developing alternative revenue sources: This can help reduce the reliance
on gambling revenue and lessen the temptation to compromise enforcement
efforts.

Ultimately, the success of legalization efforts depends on a multi-pronged

approach that addresses both the supply and demand sides of the issue,
while simultaneously strengthening the institutions responsible for enforcing
the law. Only through such a comprehensive strategy can we hope to
effectively address the challenges posed by illegal gambling and create a
more equitable and regulated environment.

Summary of “Chapter 12-Philippines” from the Yearbook of Asian Affairs 2006

Author: Suzuki Yurika

Publication: Yearbook of Asian Affairs 2006, 331-370, 2007

Source: ide.go.jp

Theme: This chapter examines the controversies surrounding President

Gloria Macapagal Arroyo of the Philippines, particularly focusing on the
alleged involvement of her family in the illegal gambling operation “Jueteng.”

Core Points:
- Jueteng Scandal: The chapter highlights the public’s concern over
allegations that President Arroyo’s relatives received payoffs from Jueteng,
an illegal form of gambling.

- Eradication vs. Legalization: The chapter discusses the ongoing debate

surrounding Jueteng, with the Catholic Church advocating for its complete
eradication due to its perceived negative impact on the poor and its
association with political corruption. However, some argue for its legalization
as a potential source of government revenue.

- President Arroyo’s Stance: President Arroyo, while calling for the eradication
of Jueteng, indicated that she would leave the final decision on legalization to
Congress.

- Congressional Debates and Testimony: The chapter details the

congressional debates on the legalization of Jueteng, which included public
hearings where testimonies from Archbishop Oscar V. Cruz and others
revealed allegations of corruption involving President Arroyo’s relatives.

- Allegations Against Arroyo’s Family: The chapter specifically mentions the

testimony of Sandra Cam, who claimed to have delivered Jueteng proceeds
to President Arroyo’s son and brother-in-law on instructions from police
officials. It also notes previous suspicions surrounding the involvement of
President Arroyo’s husband, Jose Miguel Arroyo.

Phenomenon: This chapter provides a specific case study of the Jueteng

scandal in the Philippines, highlighting the complex interplay of political
corruption, social concerns, and economic considerations surrounding illegal
gambling.

Additional Information: The chapter suggests that the Jueteng scandal was a
significant issue that generated considerable public concern and political
debate during President Arroyo’s time in office. It also sheds light on the
challenges of addressing illegal gambling, particularly in a context where It is
intertwined with corruption and power dynamics.
Summary of "Stochastic Prediction of Small-Town Lottery Numbers using
User-Based Collaborative Filtering"

Authors: James Patrick A Acang, Delaila Irma T Calindas

Publication: 2020 IEEE 12th International Conference on Humanoid,

Nanotechnology, Information Technology, Communication and Control,
Environment, and Management (HNICEM), 1-5, 2020

Source: ieeexplore.ieee.org

Theme: This research proposes a novel method to predict Small-Town Lottery

(STL) numbers using a User-Based Collaborative Filtering approach, aiming to
increase the odds of winning the lottery.

Core Points:

- Challenge of Predicting Lottery Numbers: The inherent randomness of

lottery games makes it extremely difficult to predict winning numbers.

- User-Based Collaborative Filtering Approach: The researchers utilize a User-

Based Collaborative Filtering approach, treating each winning combination as
a "user" and the winning numbers as "items." The model aims to predict the
next winning combination based on past draw results and ratings.

- Data Collection and Analysis: The study gathered 1,599 STL winning
combinations from November 17, 2017, to May 21, 2019, from the Philippine
Charity Sweepstakes results website. Ratings were assigned based on the
draw schedule of the winning combinations.

- Model Performance: The model achieved a 73.55% accuracy score in a 10-

fold cross-validation, with a 0.66 Root Mean Square Error and 0.40 Mean
Absolute Error in the split-validation.

- Potential Impact: The researchers suggest that this method could

significantly increase the odds of winning the STL, potentially influencing
how people approach participation in the lottery.
Phenomenon: This research presents a specific example of using a data-
driven approach to potentially predict lottery outcomes, highlighting the
potential for machine learning to influence gambling behavior.

Connection to Other Studies:

The research paper connects to other studies by highlighting the importance

of understanding both the predictive potential of models and the social and
cultural factors influencing lottery participation.

- Connection to "Fixing the ART" by Dorothy Gumapac: This study

emphasizes the need for understanding public perceptions and practices
related to STL and "Jueteng" to inform policy and regulatory approaches. This
connection underscores the importance of considering both the technical
aspects of prediction models and the broader social context in which they
operate.

- Connection to "Jueteng and the Crisis of Legitimacy" by Raul V Fabella: This

connection highlights the cultural and economic significance of "Jueteng" as
an informal lottery, emphasizing the need to consider the social and
economic impacts of STL and "Jueteng" in addition to their predictive
potential.

Overall: This research provides a unique perspective on lottery prediction,

demonstrating the potential of data-driven approaches to influence gambling
behavior. However, it also emphasizes the importance of considering the
social and cultural context of lottery participation and the broader impacts of
such activities.