The Economics of Scale and Scope in the Lottery Industry

Matti Viren

Chapter 7 in Gaming in the New Market Environment, 2008, pp 160-183 from Palgrave Macmillan

Abstract: Abstract This paper deals with the market structure of the lottery industry. In explicit terms, our intention is to find out whether there are important economies of scale and scope in this industry. The reason why we want to examine this is the question of what will happen in the future when the gambling markets will most likely become more competitive. Increased competition may represent just a continuation of the recent trends of crossborder gaming and de-facto competition on the national markets, but it is also possible that the legal framework, which has set rather tight limits to both domestic and crossborder competition, will change. Right now, both the US and European lottery markets are characterised by the prevalence of state monopolies. In some countries all gambling activities — not only lotteries — belong to a state monopoly, which means that market entry is prohibited by law, whereas in other countries (e.g., the UK), bookmaking and casinos are part of private market economy. In practice, state monopolies do not have complete monopoly power in their jurisdictions. There are many reasons for this, but one of them that deserves to be cited in particular is the internet.

Keywords: Marginal Cost; None None; Cost Curve; Market Environment; European Data (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-58261-3_7

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DOI: 10.1057/9780230582613_7

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