Contiguous State Lotteries: Substitutes or Complements?

Stover, Mark

doi:10.2307/3325268

Cited by 25 publications

(22 citation statements)

References 9 publications

(3 reference statements)

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“…The issue of whether multi-state and state lottery products are substitutes or complements to one another is perhaps not so straightforward as examining the lottery products of two different states as in Stover [1990]. The lottery products of two different states are obviously in competition with one another as the states try to attract ticket buyers to their games and away from the products of the neighboring states in order to increase state revenues.…”

Section: Substitutes Vs Complementsmentioning

confidence: 97%

“…If we were looking at two separate games where tickets were sold at different locations as in Stover [1990], there would be little question that the different games would be substitutes for one another. Ticket buyers would take their limited budgets devoted to ticket purchases and spend them where the expected return was higher (or effective ticket price was lower), after accounting for transaction costs.…”

Section: Substitutes Vs Complementsmentioning

confidence: 98%

“…Clotfelter and Cook [1989] test the effects of introducing lotto games on the sales of scratch-card tickets. Stover [1990] finds significant substitution effects between lotteries run by contiguous states. Gulley and Scott [1993], in part of a larger paper, consider the question of whether the two state lotto games in Massachusetts, the Mass Millions and Mass Megabucks games, serve as substitutes for one another, finding no significant relationship between the two.…”

Section: Introductionmentioning

confidence: 94%

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Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?

Grote

Matheson

2006

Atl Econ J

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This paper considers the relationship that exists between two lottery products offered simultaneously in the same state, a smaller lottery game run by the individual state and a larger multi-state game run in coordination with other states. The primary issue is whether the two different products should be considered substitutes or complements for one another. The question is considered from two different perspectives that lead to a conclusion that while the two products do tend to be complements to one another, overall the individually run state lottery games experience a reduction in sales from the presence of the multi-state game. Copyright International Atlantic Economic Society 2006D81, H71, L83,

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Section: Substitutes Vs Complementsmentioning

confidence: 97%

Section: Substitutes Vs Complementsmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 94%

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Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?

Grote

Matheson

2006

Atl Econ J

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“…Of the 19 study observations analysed, 13 indicated substitution (Brown & Rork, 2005;Farrell & Forrest, 2008;Fink & Rork, 2003;Forrest, Gulley, & Simmons, 2004;Garrett & Marsh, 2002;Grote & Matheson, 2006;Mikesell & Zorn, 1987;Roger & Chabi, 2009;Stover, 1990;Tosun & Skidmore, 2004;Walker & Jackson, 2008), two found a complementary relationship (Forrest & McHale, 2007;Purfield & Waldron, 1999), and four found no impact (Farrell & Forrest, 2008;Forrest et al, 2004;Gulley & Scott, 1993;Lin & Lai, 2006). This result indicates that intra-product cannibalization (Srinivasan et al, 2005) is common in the lottery markets.…”

Section: Lotteriesmentioning

confidence: 99%

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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“…Stover (1990) uses sales data from 1984 and 1985 for the 17 states with lotteries in these years and finds that sales are influenced by lottery status in neighboring states. While this study is limited to just 34 observations, Walker and Jackson (2008) use a longer panel covering the period 1985 to 2000.…”

mentioning

confidence: 99%

Spatial Competition and Cross-Border Shopping: Evidence from State Lotteries

Knight

Schiff

2010

SSRN Journal

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This paper investigates competition between jurisdictions in the context of cross-border shopping for state lottery tickets. We first develop a simple theoretical model in which consumers choose between state lotteries and face a trade-off between travel costs and the price of a fair gamble, which is declining in the size of the jackpot and the odds of winning. Given this trade-off, the model predicts that per-resident sales should be more responsive to prices in small states with densely populated borders, relative to large states with sparsely populated borders. Our empirical analysis focuses on the multi-state games of Powerball and Mega Millions, and the identification strategy is based upon high-frequency variation in prices due to the rollover feature of lottery jackpots. The empirical results support the predictions of the model. The magnitude of these effects is large, suggesting that states do face competitive pressures from neighboring lotteries, but the effects vary significantly across states.

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Contiguous State Lotteries: Substitutes or Complements?

Cited by 25 publications

References 9 publications

Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?

Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?

Market Cannibalization Within and Between Gambling Industries: A Systematic Review

Spatial Competition and Cross-Border Shopping: Evidence from State Lotteries

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