ECONOMIC AND SOCIAL COSTS OF GAMBLING ADDICTION IN CROATIA – THE OTHER SIDE OF THE MEDAL ABSTRACT Gambling, as a behavior primarily aimed at entertainment and leisure, is risky due to the potential development of harmful psychosocial consequences, i.e. the development of gambling addiction symptoms. These include the full range of health (physical and mental), social (family, friends, community), and economic (employment, finances, and crime) adverse consequences. The aim of this research is to calculate the economic and social costs of gambling addiction in the Republic of Croatia in order to provide science-based indicators to encourage positive regulatory changes that would ensure a balanced market between profitable and risky elements of the gambling industry. The research starts from the scientific research on the prevalence of gambling addiction in the adult Croatian population and the official data on revenues in the state budget from all gambling activities. Two of the most commonly used methodologies were used to calculate the social and economic costs: National Opinion Research Centre − NORC and Australian Productivity Commission − APC. The research uses original and strict criteria for the prevalence of gambling addiction. Regardless of the methodology used, the results show that the social costs of gambling addiction in Croatia account for between 34% and 77% of the total annual gambling revenue. Ljetopis socijalnog rada 2021., 28 (1), 37-70. 70 članci The results were interpreted in the context of general guidelines for improving the policy of responsible gambling, with the aim of reducing the likelihood of developing harmful psychosocial consequences in society. Key words: gambling; gambling addiction; economic costs; social costs; consequences