Does what happen in Vegas stay in Vegas? Football gambling and stock market activity

Do Gamblers Invest in Lottery Stocks?

“…Cookson (2018) utilizes the introduction of prize-linked savings accounts which cater to retail investors' gambling preferences and finds that residents of the treated regions reduce gambling compared to unaffected populations. Cox, Schwartz, and Van Ness (2020) find that lottery stocks are used by football bettors to offset previous gambling losses, supporting the notion of a substitution effect between the two activities in that both are viewed as interchangeable ways to break even. Dorn et al (2015) provide additional evidence in support of the substitution hypothesis and finds that investors are less likely to trade highly speculative assets during peaks of lottery jackpots.…”

“…While several important studies posit that gambling and investing are complementary and driven by gambling preferences (Kumar, 2009;Grinblatt and Keloharju, 2009;Dorn and Sengmueller, 2009), just as many others propose that gambling is a substitute to risk taking in the stock market (Dorn, Dorn, and Sengmueller, 2015;Cox, Schwartz, and Van Ness, 2020;Cookson, 2018). If investing in lottery-type instruments is indeed driven by gambling preferences -and the two activities are complementary -we should expect to find higher lottery-stock portfolio shares and participation rates for gamblers than for non-gamblers.…”

Gambling and financial markets a comparison from a regulatory perspective

“…Table 1 shows a summary of the most important differences and similarities between both industries and lists the main implications. Research suggests that some parts of the financial markets possess addictive properties (Granero et al, 2012 ; Fong, 2014 ; Arthur et al, 2016 ; Cox J. et al, 2020 ; Cox R. et al, 2020 ) and individuals who are active in the financial markets are showing signs of gambling-related problems (Guglielmo et al, 2016 ; Grall-Bronnec et al, 2017 ; Cox R. et al, 2020 ; Mosenhauer et al, 2021 ). Studies also show that certain gamblers substitute their desire to gamble with a wide range of financial products indicating a direct link between both markets (Dorn et al, 2015 ; Cookson, 2018 ).…”

“…If we extend the argument that financial markets and gambling are similar in some regard, it is worth examining the issue of whether, or to what extent, financial markets have potentially addictive properties, which is shown by many authors (Granero et al, 2012;Fong, 2014;Arthur et al, 2016;Cox J. et al, 2020;. In a recent study, Bradley and James (2021) analyzed the content of online forums for people with gambling-related problems, showing that stock market participation is indeed an important subject of discussion.…”

“…A recent study shows, that modern trading apps such a Robinhood use a similar design scheme as digital gambling apps, which arguably leads to an increasing “gamblification” of financial services for private clients (Nicoll and Albarran-Torres, 2022 , p. 168). Cox J. et al ( 2020 ) also point out that a sizable group of retail investors meets the criteria for compulsive or problematic gambling. Williams et al ( 2022 ) found in their study with 23,952 Canadian adults that gambling involvement was the strongest predictor for financial speculation.…”