Casino Gaming and VLT Gaming: Substitution Effect or Supplementation Effect?

Marfels, Christian

doi:10.1089/glr.1997.1.333

Cited by 4 publications

(7 citation statements)

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“…The results appear contradictory: The study by Marfels (1997) found no impact, whereas Room et al (1999) reported a relationship of substitution. However, according to Gallagher (2014), it is possible that cannibalization takes place through the patronage effect rather than through the spending effect.…”

Section: /4mentioning

confidence: 89%

“…Two of these studies focused on the impacts of casinos on video lottery terminals (VLTs, a type of non-casino EGM that resembles lotteries; Marfels, 1997;Room et al, 1999). The results appear contradictory: The study by Marfels (1997) found no impact, whereas Room et al (1999) reported a relationship of substitution.…”

Section: /4mentioning

confidence: 99%

“…However, according to Gallagher (2014), it is possible that cannibalization takes place through the patronage effect rather than through the spending effect. The study by Marfels (1997) considered only the spending effect, whereas that by Room et al (1999) considered both effects and found that although there was no impact on GGR, the frequency of gambling on VLTs decreased. This result indicates that casinos cannibalize non-casino EGM gambling, but not revenue.…”

Section: /4mentioning

confidence: 99%

“…Nevertheless, total casino GGR has risen despite this development, as casino corporations are careful to maintain their profits. Marfels (1997) examined the relationship between casinos and VLTs in Canada and the United States and found no case in which casino revenue would have declined because of the introduction of VLTs. It would therefore appear that EGMs and casino gambling are complementary products.…”

Section: Egmsmentioning

confidence: 99%

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Market Cannibalization Within and Between Gambling Industries: A Systematic Review

Marionneau

Nikkinen

2017

JGI

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In economics, cannibalization refers to a process in which a new product or service partly or completely substitutes for those in existing markets. This systematic review analyses the existing evidence on cannibalization within gambling markets to determine whether such substitution takes place between different types of gambling. The analysis shows that new gambling products substitute to a certain extent for existing gambling products. The sector in which the evidence is most convincing is the casino industry, which cannibalizes lotteries and pari-mutuel racing. There is also evidence that casinos substitute for other casinos and for non-casino electronic gaming machines. Lotteries substitute for casinos, other lotteries, sports betting, and pari-mutuel or racing industries. In other cases, the evidence is less conclusive and sometimes non-existent, or industry relationships are more complicated. This review also found that even in cases where substitution does occur, it is incomplete, and thus the introduction of new products tends to expand the overall gambling market. We discuss these market dynamics and identify gaps in the available research.Keywords: gambling, cannibalization, substitutionary effects, economic impacts, review RésuméEn économie, on entend par cannibalisation un processus par lequel un nouveau produit ou service se substitue partiellement ou complètement à des produits ou services existants. Cet examen systématique analyse les données dont on dispose sur la cannibalisation dans les marchés du jeu pour déterminer si une telle substitution a lieu entre différents types de jeux de hasard. L'analyse montre que les nouveaux produits de jeux de hasard remplacent, dans une certaine mesure, certains produits de jeu existants. La preuve la plus convaincante est celle portant sur le secteur du casino qui cannibalise les loteries et les courses de pari mutuel. Il est également

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Section: /4mentioning

confidence: 89%

Section: /4mentioning

confidence: 99%

Section: /4mentioning

confidence: 99%

Section: Egmsmentioning

confidence: 99%

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Market Cannibalization Within and Between Gambling Industries: A Systematic Review

Marionneau

Nikkinen

2017

JGI

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“…This is largely due, as noted above, to the fact that Illinois is one of the few states, if not the only state, other than Nevada, to have such an industry structure. The only study we were able to find was Marfels (1997) who studies the introduction of VLTs in Canada (Manitoba and Nova Scotia) and the United States (South Dakota, which only allows commercial casinos in one city, Deadwood). Marfels (1997) concludes that VLTs had no impact on casinos.…”

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confidence: 99%

The Impact of Video Gaming Terminals on Casinos and State and Local Tax Revenue

Phipps

Nichols

Guerrero

2020

Public Finance Review

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In 2012, Illinois passed legislation allowing video gaming terminals (VGTs) outside of casinos. This legislation was passed to increase tax revenues from gambling in a market that had seen decreases in revenues and admissions over the past 8 years. VGTs may substitute for casino gambling and have a negative impact on casino and tax revenue. Using ordinary least squares and vector autoregressive models, we find that casino slot revenues decrease by about 0.05 percent for each 1 percent increase in VGT revenues. Admissions decrease by about eleven people per VGT. A Granger causality test suggests causation is running from VGTs to admissions. Thus, there is substitution between VGTs and casino gambling but not so large as to reduce tax revenue. Overall tax revenue from gambling, both casino and VGT, has increased for Illinois. However, local communities where casinos are located have experienced declines in casino tax revenue that have exceeded the gains from VGT revenue.

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Gambling Households in Canada

2004

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This paper examines the distribution of gambling dollars in Nova Scotia, Saskatchewan and Canada and studies the impact of this spending on households. We focus first on how gambling expenditures are related to the level and source of household income as well as to other demographic characteristics such as age, education, household composition, geographical area, and sources of income. Next we analyze how gambling expenditures are distributed among those households that gamble. We show how expenditure patterns differ in the intensity of gambling as measured by the proportion of household income or total amount of dollars spent on gambling. Then we study the affects that gambling has on spending on household necessities, changes in net worth, retirement savings and household debt. Finally we determine whether gambling expenditures act as a substitute or a complement to other recreational spending on entertainment products and services. Throughout the paper we offer a comparative analysis of provincial and national data.

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Casino Gaming and VLT Gaming: Substitution Effect or Supplementation Effect?

Cited by 4 publications

References 0 publications

Market Cannibalization Within and Between Gambling Industries: A Systematic Review

Market Cannibalization Within and Between Gambling Industries: A Systematic Review

The Impact of Video Gaming Terminals on Casinos and State and Local Tax Revenue

Gambling Households in Canada

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