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Has Riverboat Gambling Reduced State Lottery Revenue?

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Author Info

  • Donald S. Elliott

    (Southern Illinois University Edwardsville)

  • John C. Navin

    (Southern Illinois University Edwardsville)

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    Abstract

    Over the past decade, most states have introduced lotteries, and many now license casinos. To what extent does the presence of licensed casinos cannibalize revenues from state-sponsored lotteries? To what extent does pari-mutuel betting cannibalize revenues from state-sponsored lotteries? Based on pooled cross-section data for the period from 1989 to 1995, this research reveals significant cannibalization of lottery revenues by both casinos and pari-mutuel betting. Nevertheless, states, in general, gain by having both lotteries and casinos. In the case of pari-mutuel betting, however, the substitution is so severe that, at existing effective tax rates, lost lottery revenues outweigh states’ receipts from pari-mutuel betting.

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    Bibliographic Info

    Article provided by in its journal Public Finance Review.

    Volume (Year): 30 (2002)
    Issue (Month): 3 (May)
    Pages: 235-247

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    Handle: RePEc:sae:pubfin:v:30:y:2002:i:3:p:235-247

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    Cited by:
    1. Skidmore, Mark & Serkan Tosun, Mehmet, 2008. "Do New Lottery Games Stimulate Retail Activity? Evidence from West Virginia Counties," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(1).
    2. Brown, Ryan P. & Rork, Jonathan C., 2005. "Copycat gaming: A spatial analysis of state lottery structure," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 795-807, November.
    3. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    4. Jonathan Rork & Stephen Fink, 2003. "The Importance of Self-Selection in Casino Cannibalization of State Lotteries," Economics Bulletin, AccessEcon, vol. 8(10), pages 1-8.
    5. Thomas A. Garrett & Cletus C. Coughlin, 2007. "Inter-temporal differences in the income elasticity of demand for lottery tickets," Working Papers 2007-042, Federal Reserve Bank of St. Louis.
    6. Cotti, Chad D. & Walker, Douglas M., 2010. "The impact of casinos on fatal alcohol-related traffic accidents in the United States," Journal of Health Economics, Elsevier, vol. 29(6), pages 788-796, December.
    7. Melissa S. Kearney, 2005. "The Economic Winners and Losers of Legalized Gambling," NBER Working Papers 11234, National Bureau of Economic Research, Inc.
    8. repec:ebl:ecbull:v:8:y:2003:i:10:p:1-8 is not listed on IDEAS
    9. 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.

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