In this study an econometric model is developed to examine the determinants of the demand for casino gaming, specifically the demand for slot machine wagering at riverboats and racinos. In addition to examining the effects of traditional demand variables, the effect on wagering of variables such as location of a wagering facility and of government restrictions, is examined. A unique measure of accessibility of market area customers to a facility and to competing facilities was developed. The demand for wagering at a facility was found to increase as access by customers in its market area increases and to decrease as access by its customers to competing riverboats, racinos or Indian casinos increases. Government restrictions were found to have an adverse effect on wagering at a riverboat. On the other hand, wagering at a riverboat was found to increase when such restrictions were imposed on competing riverboats. The presence of total loss limits and restrictions on boarding times at a riverboat were found to have reduced wagering by 36% and 35%, respectively. With respect to traditional demand variables, slot machine wagering demand was found to be price elastic at the beginning of the sample period declining to slightly below unit elasticity by the end of the period. Table games offered at a gaming facility were found to be substitutes for slot machines. Demand was found to be negatively related to per capita income at lower income levels and positively related at higher income levels. The proportion of income wagered was found to be greater at upper and lower income levels relative to middle income levels. Demand was found to be positively related to days of operation and number of slot machines.

"This study adds to the limited literature on the demand for casino gaming. The major focus is on the effect of a statewide smoking ban. A system of slot machine demand equations, one each for the three Delaware racinos (racetrack casinos), was developed. The number of slot machines at a racino, at competing in-state racinos, and income were significant demand determinants. Competing out-of-state gaming venues had insignificant effects on gaming demand over the study period. The smoking ban had a significant negative impact on demand, which was not significantly different across the three racinos. The smoking ban reduced gaming demand 15.9%. "("JEL "L83) Copyright (c) 2007 Western Economic Association International.

There has been a long history of patron participation in parimutuel horse race wagering and attendance, which are major recreational products in consumer budgets. In this paper, the demand for parimutuel horse race wagering and attendance has been specified and estimated for both Thoroughbred and Standardbred racetracks in a multistate market area. The data are annual over the period 1960--1987. It is found that demand is price elastic in every case. Racing quality, personal income, the number of racing days, competition from a state lottery, and from professional sports (baseball, basketball, football) are all significant determinants of these demands. Both attendance and wagering are found to increase with an increase in racing quality. However, it seems that the new patrons, attracted by quality racing, tend to wager less than those who attend regularly. The presence of a state lottery is found to have resulted in a substantial loss in attendance as well as in wagering at each of the racetracks. This, in turn, has resulted in a loss in both attendance and wagering-related revenue to racetracks, horsemen at those racetracks, and state governments. Professional sports are estimated to have a negative impact on attendance and wagering demands. For example, an additional 10 days of competition from professional sports in 1987 would have resulted in a 4% decrease in both attendance and wagering. Both attendance and wagering can be increased by lowering the takeout rate from present levels or by offering more quality races.parimutuel wagering, lottery, horse racing, demand for wagering

In this article, the relationship of the availability of pari-mutuel wagering and casino gaming opportunities to personal (nonbusiness) bankruptcy filings is investigated. An econometric model was developed relating the number of personal bankruptcies to sociodemographic, legal, and economic factors. In addition, a unique measure of access to casino and pari-mutuel gaming was included. Population, personal income, age, race, divorce rate, unemployment rate, and the ratio of debt to disposable personal income were found to be significant determinants of personal bankruptcies. Access to pari-mutuel or casino gaming facilities was found not to have a significant impact on personal bankruptcies. (JEL K1, K4, D1, L83)

Parimutuel wagering has been declining for several decades due, in part, to increased competition from state lotteries and casino gaming. In recent years, an attempt has been made to integrate video lottery terminal (VLT) gaming into a parimutuel racetrack's product portfolio. Daily data are used to develop product demand equations for parimutuel horse-race wagering and video lottery gaming at a throughbred racetrack. It is found that introduction of VLTs into the product mix results in decreased parimutuel wagering and revenues. However, the additional revenue generated from the VLTs is found to more than offset the decline in parimutuel revenue and the increased expense associated with the VLTs, given that a sufficient number of terminals are made available. When revenue from the combined parimutuel and VLT gaming product increases, if the respective shares of the VLT revenue distributed to the racetrack, to the horsemen who race horses at the racetrack and to the government are the same as their distributive shares from parimutuel wagering, all will enjoy an increase in revenue. To the extent that the respective shares of these participants differ from their share of parimutuel wagering, all participants may or may not enjoy an increase in revenue, depending upon the magnitude of the revenue increase. An additional finding of importance is that patrons who attend and wager on horse racing also wager on the VLT games while patrons who attend for the VLT gaming are less likely to wager on horse racing.

Parimutuel horse-race wagering is in many respects like any other economic good but it differs in one important way from a vast majority of them. Given the present market arrangement, this good cannot be transported to the consumer; instead the consumer must travel to the production site where the good is consumed as it is produced. Thus, transportation costs must play a crucial role in the demand decision for horse-race wagering. The consumers incur not only out-of-pocket expenses for travelling but also the cost of the time required to travel to and to consume the product. Moreover, consumers incur differential costs in obtaining the same product because of their locational differences. Wagering demands are theorized to be the consequence of the choice of utility maximizing consumers which incorporates this special characteristic of the product. Models for parimutuel horse-race wagering are then estimated both for thoroughbred and for harness horse racing in the state of New Jersey. It is found that both harness and thoroughbred horse-race wagering are sensitive to travelling costs and both can be increased by reducing the costs per visit to wagering sites. These costs can be lowered by reducing the travelling distance of the consumers to the wagering sites. This can be achieved by increasing the number of racing days or by simply reallocating a given number of racing days among different locations. It can also be achieved by increasing the number of wagering sites and locating them strategically. It is interesting to see that travelling distance declines non-linearly as the number of racing days and/or the number of sites is increased and the decline is insignificant as the number of racing days and/or the number of sites is increased beyond a saturation point. The unique construction of travelling costs allows investigation of wagering impacts of an introduction of a new wagering site or an elimination of an existing one.

Limited information is available concerning price determination in the thoroughbred yearling market. A recursive model incorporating price expectations and biological constraints is used to estimate supply and demand functions for thoroughbred horses. Empirical results characterize a market with inelastic supply and elastic demand that converges to equilibrium under static conditions. Purses were identified as the most influential variable impacting price. Comparative statics illustrate the effectiveness of purses as a policy instrument for the thoroughbred industry. Federal tax policy also was found to have a significant impact on the decisions to breed or invest in thoroughbred yearlings.

No abstract