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Setting The Odds Of Winning The Jackpot: On The Economics Of (Re) Designing Lottery Games

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  • Alejandro Díaz
  • Levi Pérez

Abstract

In many jurisdictions, domestic lotto games have experienced a decline in sales revenue due to the introduction of new products and the absence of appealing jackpots. To reverse this trend, operators worldwide have conducted major reforms to the design of games. In this paper, we focus on Spain's largest domestic lottery game, which was redesigned in 2012 by significantly reduced the odds of winning the jackpot to produce more frequent and larger rollovers. Findings show overall negative results of such reform, as players seem to no longer react to large jackpots, and the declining trend in sales has even worsened. (JEL D12, H27, L83)

Suggested Citation

  • Alejandro Díaz & Levi Pérez, 2021. "Setting The Odds Of Winning The Jackpot: On The Economics Of (Re) Designing Lottery Games," Contemporary Economic Policy, Western Economic Association International, vol. 39(1), pages 168-177, January.
    • Handle: RePEc:bla:coecpo:v:39:y:2021:i:1:p:168-177
    DOI: 10.1111/coep.12475
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    References listed on IDEAS

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    Cited by:

    1. 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.

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    More about this item

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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