IDEAS home Printed from https://ideas.repec.org/a/eee/spomar/v18y2015i3p436-447.html
   My bibliography  Save this article

Sports gambling as consumption: Evidence from demand for sports lottery

Author

Listed:
  • Mao, Luke Lunhua
  • Zhang, James J.
  • Connaughton, Daniel P.

Abstract

Although the fact that sports lottery has become a prevalent phenomenon, it remains an under-researched area in sport management literature. Based on Conlisk's (1993) theory on the utility of gambling, an econometric model of demand for sports lottery gambling was constructed. The model assumes an experiential utility associated with sports lottery gambling, and proposes that rational consumers are mainly motivated by product attributes and marketing variables. The model is empirically examined by using a set of draw-to-draw sales data of a sports lottery in China. Time series analyses were conducted to analyze the determinants of sports lottery demand. This study revealed that ticket composition had considerable impact on the demand after partialling out information through the inclusion of an ex-post Prediction Difficulty Coefficient in the regression model. Eight percent of variance in the demand for sports lottery was found to be associated with ticket composition variables. The results provide additional evidence to the existing literature on sports gambling as consumption. The notion that nonmonetary activities associated with sports lottery gaming have a consumption value has considerable implications in terms of designing lottery products and delivering value to its consumers.

Suggested Citation

  • Mao, Luke Lunhua & Zhang, James J. & Connaughton, Daniel P., 2015. "Sports gambling as consumption: Evidence from demand for sports lottery," Sport Management Review, Elsevier, vol. 18(3), pages 436-447.
    • Handle: RePEc:eee:spomar:v:18:y:2015:i:3:p:436-447
    DOI: 10.1016/j.smr.2014.11.006
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1441352314000953
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.smr.2014.11.006?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Forrest, David & Gulley, O. David & Simmons, Robert, 2000. "Elasticity of Demand for UK National Lottery Tickets," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 853-864, December.
    2. Thomas A. Garrett & Russell S. Sobel, 2004. "State Lottery Revenue: The Importance of Game Characteristics," Public Finance Review, , vol. 32(3), pages 313-330, May.
    3. Lisa Farrell & Edgar Morgenroth & Ian Walker, 1999. "A Time Series Analysis of U.K. Lottery Sales: Long and Short Run Price Elasticities," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(4), pages 513-526, November.
    4. Humphreys, Brad R. & Paul, Rodney J. & Weinbach, Andrew P., 2013. "Consumption benefits and gambling: Evidence from the NCAA basketball betting market," Journal of Economic Psychology, Elsevier, vol. 39(C), pages 376-386.
    5. repec:bla:obuest:v:61:y:1999:i:4:p:513-26 is not listed on IDEAS
    6. David Forrest, 2003. "Sport and Gambling," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 19(4), pages 598-611, Winter.
    7. Beenstock, Michael & Haitovsky, Yoel, 2001. "Lottomania and other anomalies in the market for lotto," Journal of Economic Psychology, Elsevier, vol. 22(6), pages 721-744, December.
    8. David Forrest & Robert Simmons & Neil Chesters, 2002. "Buying a Dream: Alternative Models of Demand for Lotto," Economic Inquiry, Western Economic Association International, vol. 40(3), pages 485-496, July.
    9. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," CERT Discussion Papers 0706, Centre for Economic Reform and Transformation, Heriot Watt University.
    10. Breuer, Wolfgang & Hauten, Guido & Kreuz, Claudia, 2009. "Financial instruments with sports betting components: Marketing gimmick or a domain for behavioral finance?," Journal of Banking & Finance, Elsevier, vol. 33(12), pages 2241-2252, December.
    11. Cook, Philip J & Clotfelter, Charles T, 1993. "The Peculiar Scale Economies of Lotto," American Economic Review, American Economic Association, vol. 83(3), pages 634-643, June.
    12. Kennedy, Peter E, 1981. "Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations [The Interpretation of Dummy Variables in Semilogarithmic Equations]," American Economic Review, American Economic Association, vol. 71(4), pages 801-801, September.
    13. Nyman, John A. & Welte, John W. & Dowd, Bryan E., 2008. "Something for nothing: A model of gambling behavior," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2492-2504, December.
    14. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/generalized method of moments estimation and testing," Stata Journal, StataCorp LP, vol. 7(4), pages 465-506, December.
    15. Gulley, O. David & Scott, Frank A. Jr., 1993. "The Demand for Wagering on State-Operated Lotto Games," National Tax Journal, National Tax Association, vol. 46(1), pages 13-22, March.
    16. Ng Yew Kwang, 1965. "Why do People Buy Lottery Tickets? Choices Involving Risk and the Indivisibility of Expenditure," Journal of Political Economy, University of Chicago Press, vol. 73(5), pages 530-530.
    17. Forrest, David & Gulley, O. David & Simmons, Robert, 2000. "Elasticity of Demand for UK National Lottery Tickets," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 853-64, December.
    18. Charles T. Clotfelter & Philip J. Cook, 1987. "Implicit Taxation in Lottery Finance," NBER Working Papers 2246, National Bureau of Economic Research, Inc.
    19. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    20. Thaler, Richard H & Ziemba, William T, 1988. "Parimutuel Betting Markets: Racetracks and Lotteries," Journal of Economic Perspectives, American Economic Association, vol. 2(2), pages 161-174, Spring.
    21. Gulley, O. David & Scott, Frank A. Jr., 1993. "The Demand for Wagering on State-Operated Lotto Games," National Tax Journal, National Tax Association;National Tax Journal, vol. 46(1), pages 13-22, March.
    22. Conlisk, John, 1993. "The Utility of Gambling," Journal of Risk and Uncertainty, Springer, vol. 6(3), pages 255-275, June.
    23. Shapira, Zur & Venezia, Itzhak, 1992. "Size and frequency of prizes as determinants of the demand for lotteries," Organizational Behavior and Human Decision Processes, Elsevier, vol. 52(2), pages 307-318, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li-Wei Liu & Ying-Hsiao Lai & Tsung-Hua Hsieh, 2022. "The Online Betting Behavior of Sport Lottery Consumers," International Journal of E-Services and Mobile Applications (IJESMA), IGI Global, vol. 14(1), pages 1-18, January.
    2. Agha, Nola & Tyler, B. David, 2017. "An investigation of highly identified fans who bet against their favorite teams," Sport Management Review, Elsevier, vol. 20(3), pages 296-308.
    3. Day-Yang Liu & Wen-Chun Tsai & Chung-Yi Fang & Pei-Leen Liu, 2019. "Determinants of Managerial Performance on Taiwan Sports Lottery in System Dynamics Modeling of Strategic Management Approach," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 9(5), pages 1-10.
    4. Day-Yang Liu & Chia-Yang Chang & Chung-Yi Fang & Pei-Leen Liu, 2020. "Research on the Issuance and Distribution Model of Sports Lottery in Taiwan from a Systems Thinking Perspective," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 10(5), pages 1-4.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luke Lunhua Mao & James J Zhang & Daniel P Connaughton, 2015. "Determinants of Demand for Sports Lottery: Insights from a Multilevel Model," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(8), pages 973-987, August.
    2. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: An Annotated Bibliography," Working Papers 1110, College of the Holy Cross, Department of Economics.
    3. S. Capacci & E. Randon & A. E. Scorcu, 2014. "Luck vs Skill in Gambling over the Recession. Evidence from Italy," Working Papers wp918, Dipartimento Scienze Economiche, Universita' di Bologna.
    4. Sara Capacci & Emanuela Randon & Antonello Eugenio Scorcu, 2017. "Are Consumers More Willing to Invest in Luck During Recessions?," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 3(1), pages 25-38, March.
    5. Kent Grote & Victor Matheson, 2011. "The Economics of Lotteries: A Survey of the Literature," Working Papers 1109, College of the Holy Cross, Department of Economics.
    6. Kam Yu, 2009. "Measuring the Output and Prices of the Lottery Sector: An Application of Implicit Expected Utility Theory," NBER Chapters, in: Price Index Concepts and Measurement, pages 405-425, National Bureau of Economic Research, Inc.
    7. Kearney, Melissa Schettini, 2005. "State lotteries and consumer behavior," Journal of Public Economics, Elsevier, vol. 89(11-12), pages 2269-2299, December.
    8. Humphreys, Brad & Perez, Levi, 2011. "Lottery Participants and Revenues: An International Survey of Economic Research on Lotteries," Working Papers 2011-17, University of Alberta, Department of Economics.
    9. Kent Grote & Victor Matheson, 2006. "Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 34(1), pages 85-100, March.
    10. McHale, I.G. & Peel, D.A., 2010. "Habit and long memory in UK lottery sales," Economics Letters, Elsevier, vol. 109(1), pages 7-10, October.
    11. Garrett, Thomas A. & Coughlin, Cletus C., 2009. "Inter–Temporal Differences in the Income Elasticity of Demand for Lottery Tickets," National Tax Journal, National Tax Association;National Tax Journal, vol. 62(1), pages 77-99, March.
    12. Walther Herbert, 2005. "Optimal Taxation of Gambling and Lotto," Working Papers geewp47, Vienna University of Economics and Business Research Group: Growth and Employment in Europe: Sustainability and Competitiveness.
    13. Thomas A. Garrett & Natalia A. Kolesnikova, 2010. "Local price variation and the tax incidence of state lotteries," Working Papers 2010-035, Federal Reserve Bank of St. Louis.
    14. Kathryn L. Combs & Jaebeom Kim & Jim Landers & John A. Spry, 2016. "The Responsiveness of Casino Revenue to the Casino Tax Rate," Public Budgeting & Finance, Wiley Blackwell, vol. 36(3), pages 22-44, September.
    15. Thomas A. Garrett, 2011. "A closer look at the tax incidence of instant lottery games: an analysis by price point," Working Papers 2011-010, Federal Reserve Bank of St. Louis.
    16. Farrell, Lisa & Walker, Ian, 1999. "The welfare effects of lotto: evidence from the UK," Journal of Public Economics, Elsevier, vol. 72(1), pages 99-120, April.
    17. Ursula Hauser‐Rethaller & Ulrich König, 2002. "Parimutuel Lotteries: Gamblers' Behavior and the Demand for Tickets," German Economic Review, Verein für Socialpolitik, vol. 3(2), pages 223-245, May.
    18. Cletus C. Coughlin & Thomas A. Garrett, 2009. "Income and Lottery Sales," Public Finance Review, , vol. 37(4), pages 447-469, July.
    19. Alejandro Díaz & Levi Pérez, 2021. "Setting The Odds Of Winning The Jackpot: On The Economics Of (Re) Designing Lottery Games," Contemporary Economic Policy, Western Economic Association International, vol. 39(1), pages 168-177, January.
    20. Kent R. Grote & Victor A. Matheson, 2006. "In Search of a Fair Bet in the Lottery," Eastern Economic Journal, Eastern Economic Association, vol. 32(4), pages 673-684, Fall.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:spomar:v:18:y:2015:i:3:p:436-447. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/716936/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.