IDEAS home Printed from https://ideas.repec.org/a/sae/pubfin/v52y2024i5p563-609.html
   My bibliography  Save this article

The Effects of Sports Betting on Cross-Border Substitution in Casino Gambling

Author

Listed:
  • Ege Can
  • Mark W. Nichols

Abstract

This paper tests for potential cross-border substitution in casino gambling between Illinois and Missouri due to the launch of sports betting in Illinois. Using casino-level gambling revenue and admissions data, difference-in-differences, event study analysis, and regression discontinuity design, our findings suggest that the launch of sports betting increased casino revenues and admissions in the Illinois casinos and decreased revenue and admissions in Missouri casinos close to the border of Illinois and Missouri. Thus, Missouri not only lost potential sports betting tax revenue but also tax revenue from casino gambling revenue and admissions resulting from cross-border substitution between Missouri and Illinois after the launch of sports betting. The size of the lost casino and foregone sports betting tax revenues suggests Missouri and other states in similar circumstances are likely to experience continued fiscal pressure to legalize sports betting despite possible moral objections or an intent to minimize social costs through prohibition.

Suggested Citation

  • Ege Can & Mark W. Nichols, 2024. "The Effects of Sports Betting on Cross-Border Substitution in Casino Gambling," Public Finance Review, , vol. 52(5), pages 563-609, September.
    • Handle: RePEc:sae:pubfin:v:52:y:2024:i:5:p:563-609
    DOI: 10.1177/10911421241248506
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/10911421241248506
    Download Restriction: no
    File URL: https://libkey.io/10.1177/10911421241248506?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lucas W. Davis, 2008. "The Effect of Driving Restrictions on Air Quality in Mexico City," Journal of Political Economy, University of Chicago Press, vol. 116(1), pages 38-81, February.
    2. Lovenheim, Michael F., 2008. "How Far to the Border?: The Extent and Impact of Cross-Border Casual Cigarette Smuggling," National Tax Journal, National Tax Association;National Tax Journal, vol. 61(1), pages 7-33, March.
    3. Gary A. Wagner & Douglas M. Walker, 2021. "Did video gaming expansion boost municipal revenues in Illinois?," Southern Economic Journal, John Wiley & Sons, vol. 88(2), pages 649-679, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Melissa Matlock & Suellen Hopfer & Oladele A. Ogunseitan, 2019. "Communicating Risk for a Climate-Sensitive Disease: A Case Study of Valley Fever in Central California," IJERPH, MDPI, vol. 16(18), pages 1-15, September.
    2. Lesley Chiou & Erich Muehlegger, 2014. "Consumer Response to Cigarette Excise Tax Changes," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(3), pages 621-650, September.
    3. Jeff DeSimone & Daniel Grossman & Nicolas Ziebarth, 2023. "Regression Discontinuity Evidence on the Effectiveness of the Minimum Legal E-cigarette Purchasing Age," American Journal of Health Economics, University of Chicago Press, vol. 9(3), pages 461-485.
    4. Li, Tianshu & Song, Shunfeng & Yang, Yanmin, 2022. "Driving restrictions, traffic speeds and carbon emissions: Evidence from high-frequency data," China Economic Review, Elsevier, vol. 74(C).
    5. Venables, Anthony & Duranton, Gilles, 2018. "Place-Based Policies for Development," CEPR Discussion Papers 12889, C.E.P.R. Discussion Papers.
    6. Aysoy, Cevriye & Kirli, Duygu Halim & Tumen, Semih, 2015. "How does a shorter supply chain affect pricing of fresh food? Evidence from a natural experiment," Food Policy, Elsevier, vol. 57(C), pages 104-113.
    7. Dang, Hai-Anh H. & Trinh, Trong-Anh, 2021. "Does the COVID-19 lockdown improve global air quality? New cross-national evidence on its unintended consequences," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    8. Li, Shanjun & Liu, Yanyan & Purevjav, Avralt-Od & Yang, Lin, 2019. "Does subway expansion improve air quality?," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 213-235.
    9. Du, Zaichao & Yin, Hua & Zhang, Lin, 2022. "Foreign buyer taxes and house prices in Canada: A tale of two cities," Journal of Housing Economics, Elsevier, vol. 55(C).
    10. Francis Ostermeijer & Hans RA Koster & Leonardo Nunes & Jos van Ommeren, 2021. "Citywide parking policy and traffic: Evidence from Amsterdam," Tinbergen Institute Discussion Papers 21-015/VIII, Tinbergen Institute.
    11. Soto, Jose J. & Macea, Luis F. & Cantillo, Victor, 2023. "Analysing a license plate-based vehicle restriction policy with optional exemption charge: The case in Cali, Colombia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 170(C).
    12. Hansen, Benjamin & Miller, Keaton & Weber, Caroline, 2020. "Federalism, partial prohibition, and cross-border sales: Evidence from recreational marijuana," Journal of Public Economics, Elsevier, vol. 187(C).
    13. Wen, Qiang & Zhang, Teng, 2022. "Economic policy uncertainty and industrial pollution: The role of environmental supervision by local governments," China Economic Review, Elsevier, vol. 71(C).
    14. Catherine Hausman & David S. Rapson, 2018. "Regression Discontinuity in Time: Considerations for Empirical Applications," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 533-552, October.
    15. Antoine Dechezleprêtre & Adrien Fabre & Tobias Kruse & Bluebery Planterose & Ana Sanchez Chico & Stefanie Stantcheva, 2025. "Fighting Climate Change: International Attitudes toward Climate Policies," American Economic Review, American Economic Association, vol. 115(4), pages 1258-1300, April.
    16. Keaton Miller & Boyoung Seo, 2021. "The Effect of Cannabis Legalization on Substance Demand and Tax Revenues," National Tax Journal, University of Chicago Press, vol. 74(1), pages 107-145.
    17. David Agrawal & William H. Hoyt, 2014. "State Tax Differentials, Cross-Border Commuting, and Commuting Times in Multi-State Metropolitan Areas," CESifo Working Paper Series 4852, CESifo.
    18. Borck, Rainald & Mulder, Peter, 2024. "Energy policies and pollution in two developing country cities: A quantitative model," Journal of Development Economics, Elsevier, vol. 171(C).
    19. Rafael Lalive & Simon Luechinger & Armin Schmutzler, 2013. "Does Supporting Passenger Railways Reduce Road Traffic Externalities?," ECON - Working Papers 110, Department of Economics - University of Zurich.
    20. Ostermeijer, Francis & Koster, Hans & Nunes, Leonardo & van Ommeren, Jos, 2022. "Citywide parking policy and traffic: Evidence from Amsterdam," Journal of Urban Economics, Elsevier, vol. 128(C).

    More about this item

    Keywords

    sports betting; casino gambling; cross-border substitution; event-study design; regression discontinuity design;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:pubfin:v:52:y:2024:i:5:p:563-609. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.