Reason Foundation’s Ted Balaker sees a libertarian silver lining in the cloud of state government budget deficits.

After all, some states are now eyeing legalized gambling as a new cash cow. Maybe the next step will be to legalize – and tax – marijuana.

It is a well-known proposition in international trade that trade quotas create windfalls for the owners of quotas, while tariffs create tax revenue. Balaker is suggesting that governments are seeing opportunities to obtain revenue by changing from regulatory quotas against gambling or Sunday alcohol sales to taxes on such activities.

For Discussion. What are the pros and cons of having state governments rely on taxes on cigarettes, alcohol, recreational drugs, gambling, prostitution, etc.?