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The market for EuroMillions: jackpot sharing and implicit transfer of funds among countries

Author

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  • Álvaro Muñiz

    (University of Oviedo)

  • Levi Pérez

    (University of Oviedo)

Abstract

Multi-country (state) lottery markets have emerged worldwide as an attempt to revert the decline in lottery sales. These markets allow operators to offer appealing large prizes by combining the markets of separate lottery jurisdictions. An analysis of EuroMillions’ jackpot sharing among countries of different market size shows that some countries tend to claim higher jackpots and achieve higher payout rates, while others seem to be systematically disadvantaged. This paper elaborates on whether this unequal jackpot distribution is caused by different demand behavior and market share trends in the market for EuroMillions. Evidence shows that such distribution of the jackpot is explained by differences in jackpot elasticity of the demand among countries, which causes, at the same time, variations in the market share and draw winning odds per country. As a result, some countries may then benefit from the funds that have been contributed to the prize pool by the rest, raising some implicit funding issues (net payout balance) and questioning the optimality of jackpot sharing.

Suggested Citation

  • Álvaro Muñiz & Levi Pérez, 2023. "The market for EuroMillions: jackpot sharing and implicit transfer of funds among countries," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(3), pages 817-833, October.
    • Handle: RePEc:spr:epolit:v:40:y:2023:i:3:d:10.1007_s40888-023-00316-9
    DOI: 10.1007/s40888-023-00316-9
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    References listed on IDEAS

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    More about this item

    Keywords

    Multi-country lotteries; EuroMillions; Jackpot distribution; Jackpot elasticity; Sales market share; Net payout balance; Optimal jackpot sharing; Implicit transfer of funds;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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