Gamblers’ Love for Variety and Substitution among Lotto Games

Authors

  • Victor A Matheson COLLEGE OF THE HOLY CROSS, DEPARTMENT OF ECONOMICS
  • Kent Grote Department of Economics and Business, Lake Forest College

DOI:

https://doi.org/10.5750/jgbe.v1i2.511

Keywords:

lotto, lottery, public finance, gambling

Abstract

This paper considers the whether offering multiple lotto games within a state by joining a multi-state lottery increases total ticket sales compared to offering a single state game. The question is considered from two different perspectives, which both lead to the conclusion that states do tend to benefit from increased ticket sales overall by joining a multi-state lottery association. There is, however, a noted difference in the magnitude of that effect depending on the size of the average jackpots of the previously existing state games.

References

Clotfelter, Charles T. and Cook, Philip J. Selling Hope. Cambridge, MA: Harvard University Press, 1989.

Clotfelter Charles T. and Cook, Philip J. “The Peculiar Scale Economies of Lotto,” American Economic Review, June 1993, 83:3, 634-643.

DeBoer, Larry. “Lotto Sales Stagnation: Product Maturity or Small Jackpots?” Growth

and Change, Winter 1990, 73 7.

Forrest, David, Gulley, O. David and Simmons, Robert. “Elasticity of Demand for UK National Lottery Tickets,” National Tax Journal, December 2000, 853 – 63.

Forrest, David, Gulley, O. David and Simmons, Robert. “Substitution between Games in the UK National Lottery,” Applied Economics, April 2004, 645-51.

Forrest, David, Simmons, Robert and Chesters, N. “ Buying a Dream: Alternative Models of Demand for Lotto,” Economic Inquiry, 40:3, July 2002, 485-96.

Grote, Kent R. and Matheson, Victor A. “Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?” Atlantic Economic Journal, March 2006, 34:1, 85-100.

Gully, O. David and Scott, Frank A., Jr. “The Demand for Wagering on State-Operated Lotto Games,” National Tax Journal. March 1993, 13-22.

Matheson, Victor A. “When are State Lotteries a Good Bet? (Revisited),” Eastern Economic Journal, Winter 2001, 55-70.

Matheson, Victor A. and Grote, Kent R. “Lotto Fever: Do Lottery Players Act Rationally Around Large Jackpots?” Economics Letters, May 2004, 233-7.

Scoggins, John F. “The Lotto and Expected Net Revenue,” National Tax Journal, March 1995, 61-70.

Scott, Frank A., Jr. and Gully, O. David. “Testing for Efficiency in Lotto Markets,” Economic Inquiry, April 1995, 175 88.

Shapira, Zur and Venezia, Itzhak. “Size and Frequency of Prizes as Determinants of the Demand for Lotteries” Organizational Behavior and Human Decision Processes, July 1992, 307-18.

Stover, M.E. “Contiguous State Lotteries: Substitutes or Complements?” Journal of Policy Analysis and Management, 1990, 565-8.

Published

2013-01-02

Issue

Section

Articles