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Has the rise of legal sports betting reduced lottery revenues? Evidence from New York

Author

Listed:
  • Robert Baumann

    (College of the Holy Cross)

  • Victor Matheson

    (College of the Holy Cross)

  • Liam Marrinan

    (College of the Holy Cross)

Abstract

This paper examines the relationship between the legalization of mobile sports betting and state lottery ticket sales utilizing weekly sales data from the state of New York. This paper finds a statistically significant decline in lottery ticket sales compared with expectations after the introduction of mobile sports betting in the state on January 1, 2022. Every $100 in legal sports bets made results in a decline in lottery ticket sales of $3.13. Alternatively, weekly lottery ticket sales fell by $11.5 million per week following the introduction of mobile sports betting. This still results in an increase in total gambling revenue collected in New York, but in jurisdictions with lower sports betting tax rates, a similar finding would result in a net decline in total gambling revenues from the introduction of sports betting.

Suggested Citation

  • Robert Baumann & Victor Matheson & Liam Marrinan, 2025. "Has the rise of legal sports betting reduced lottery revenues? Evidence from New York," Economics Bulletin, AccessEcon, vol. 45(3), pages 1341-1353.
    • Handle: RePEc:ebl:ecbull:eb-25-00044
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2025/Volume45/EB-25-V45-I3-P114.pdf
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    References listed on IDEAS

    as
    1. Victor Matheson & Kent Grote, 2007. "Gamblers' Love for Variety and Substitution among Lotto Games," Journal of Gambling Business and Economics, University of Buckingham Press, vol. 1(2), pages 85-99, June.
    2. Brad R. Humphreys, 2021. "Legalized Sports Betting, VLT Gambling, and State Gambling Revenues: Evidence from West Virginia," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 47(1), pages 9-28, January.
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    5. Kathryn L Combs & Jocelyn Elise Crowley & John A Spry, 2014. "The Effect of New Jersey Lottery Promotions on Consumer Demand and State Profits," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 40(3), pages 326-348, June.
    6. Kathryn Combs & Jaebeom Kim & John Spry, 2008. "The relative regressivity of seven lottery games," Applied Economics, Taylor & Francis Journals, vol. 40(1), pages 35-39.
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    Cited by:

    1. Joseph Nedved & David Nason & Adam Hoffer & Amir B. Ferreira Neto & Brad R. Humphreys, 2026. "Sports Betting, Lotteries, and State Revenues in the Post-PASPA Era," Working Papers 26-05, Department of Economics, West Virginia University.

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    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • L8 - Industrial Organization - - Industry Studies: Services

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