The Demand for Parimutuel Horse Race Wagering and Attendance
AbstractThere has been a long history of patron participation in parimutuel horse race wagering and attendance, which are major recreational products in consumer budgets. In this paper, the demand for parimutuel horse race wagering and attendance has been specified and estimated for both Thoroughbred and Standardbred racetracks in a multistate market area. The data are annual over the period 1960--1987. It is found that demand is price elastic in every case. Racing quality, personal income, the number of racing days, competition from a state lottery, and from professional sports (baseball, basketball, football) are all significant determinants of these demands. Both attendance and wagering are found to increase with an increase in racing quality. However, it seems that the new patrons, attracted by quality racing, tend to wager less than those who attend regularly. The presence of a state lottery is found to have resulted in a substantial loss in attendance as well as in wagering at each of the racetracks. This, in turn, has resulted in a loss in both attendance and wagering-related revenue to racetracks, horsemen at those racetracks, and state governments. Professional sports are estimated to have a negative impact on attendance and wagering demands. For example, an additional 10 days of competition from professional sports in 1987 would have resulted in a 4% decrease in both attendance and wagering. Both attendance and wagering can be increased by lowering the takeout rate from present levels or by offering more quality races.
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Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 41 (1995)
Issue (Month): 1 (January)
parimutuel wagering; lottery; horse racing; demand for wagering;
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