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Sports Betting, Lotteries, and State Revenues in the Post-PASPA Era

Author

Listed:
  • Joseph Nedved

    (West Virginia University)

  • David Nason

    (Florida Gulf Coast University)

  • Adam Hoffer

    (Tax Foundation)

  • Amir B. Ferreira Neto

    (Florida Gulf Coast University)

  • Brad R. Humphreys

    (West Virginia University)

Abstract

State lotteries are an important source of state revenue in the 45 states that operate them. Following the repeal of the Professional and Amateur Sports Protection Act (PASPA), 38 states and Washington, DC legalized sports betting. Prior evidence is mixed on whether sports betting and lotteries are substitutes, complements, or unrelated goods, raising concerns about potential fiscal impacts. Using monthly lottery sales data from 18 states and a difference-in-differences design exploiting staggered legalization, we find no economically or statistically significant effect of sports betting on state lottery revenues. These results are robust across specifications and sub-samples.

Suggested Citation

  • 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.
    • Handle: RePEc:wvu:wpaper:26-05
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    File URL: https://researchrepository.wvu.edu/cgi/viewcontent.cgi?article=1261&context=econ_working-papers
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    Keywords

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    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • Z20 - Other Special Topics - - Sports Economics - - - General
    • D10 - Microeconomics - - Household Behavior - - - General

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