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Evaluating the effects of game design on lotto sales: a case study from Spain

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Author Info

  • David Forrest

    (University of Salford)

  • Levi Perez

    (University of Oviedo)

  • Rose Baker

    (University of Salford)

Abstract

In February, 2005 the Spanish National Lottery Agency (LAE) made several modifications to the design of one of its lotto games. The entry fee was not changed but the familiar 6/49 format was replaced by 5/54 + 1/10. This considerably lengthened the odds against winning a share of the grand prize. However, extra lower tiers of prizes were added and a guaranteed jackpot of €5m introduced. The change in rules provides an unusual opportunity to study the effect on sales of features of lotto games other than entry fee and pay-back rate. The changes in design appear in this case to have allowed the operator to achieve higher and more stable sales. Reasons for this are explored through estimation of demand models. Results indicate that gains to the operator had been achieved by better satisfying players' preference for skewness in the distribution of returns.

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Bibliographic Info

Article provided by University of Buckingham Press in its journal Journal of Gambling Business and Economics.

Volume (Year): 4 (2010)
Issue (Month): 2 (September)
Pages: 1-19

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Handle: RePEc:buc:jgbeco:v:4:y:2010:i:2:p:1-19

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Related research

Keywords: LOTTO; GAME DESIGN; TICKET SALES; EFFECTIVE PRICE; RISK PREFERENCES;

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Cited by:
  1. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: A Survey of the Literature," Working Papers 1109, College of the Holy Cross, Department of Economics.
  2. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.

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