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The relationship between betting and lottery play: a high frequency time-series analysis

Author

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  • O D Gulley
  • R Simmons
  • D Forrest

Abstract

The substitutability of different gambling products is an important concern for any jurisdiction contemplating deregulation of its gambling sector. We apply a novel daily time-series data set of daily turnover from one of Britain's leading bookmakers to analyse potential substitution between lottery play and bookmaker betting. We find some evidence that bettors do substitute away from horse race, dog race and numbers betting when the effective price of lottery tickets is unusually low, i.e. when there is a rollover or Superdraw. This substitution has a highly specific pattern of timing that varies by sector. Our results further suggest that bettors rationally engage in forward-looking substitution within their betting portfolios.

Suggested Citation

  • O D Gulley & R Simmons & D Forrest, 2005. "The relationship between betting and lottery play: a high frequency time-series analysis," Working Papers 567306, Lancaster University Management School, Economics Department.
    • Handle: RePEc:lan:wpaper:567306
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    File URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/Betting.pdf
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    References listed on IDEAS

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    1. Catriona Purfield & Patrick Waldron, 1999. "Gambling on Lotto Numbers: Testing for Substitutability or Complementarity Using Semi‐weekly Turnover Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(4), pages 527-544, November.
    2. 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.
    3. Gulley, O. David & Scott, Frank A. Jr., 1989. "Lottery Effects on Pari-Mutuel Tax Revenues," National Tax Journal, National Tax Association, vol. 42(1), pages 89-93, March.
    4. Farrell, Lisa & Morgenroth, Edgar & Walker, Ian, 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.
    5. Purfield, Catriona & Waldron, Patrick, 1999. "Gambling on Lotto Numbers: Testing for Substitutability or Complementarity Using Semi-weekly Turnover Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(4), pages 527-544, November.
    6. Gulley, O. David & Scott, Frank A. Jr., 1989. "Lottery Effects on Pari-Mutuel Tax Revenues," National Tax Journal, National Tax Association;National Tax Journal, vol. 42(1), pages 89-93, March.
    7. Donald Siegel & Gary Anders, 2001. "The Impact of Indian Casinos on State Lotteries: A Case Study of Arizona," Public Finance Review, , vol. 29(2), pages 139-147, March.
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    Cited by:

    1. Brad Humphreys & Levi Perez, 2012. "Network externalities in consumer spending on lottery games: evidence from Spain," Empirical Economics, Springer, vol. 42(3), pages 929-945, June.

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