The Income Elasticity of Gross Sports Betting Revenues in Nevada: Short-Run and Long-Run Estimates

Ege Can and Mark Nichols

Journal of Sports Economics, 2022, vol. 23, issue 2, 175-199

Abstract: In May 2018, the Supreme Court overturned the Professional and Amateur Sports Protection Act, thereby allowing all states to offer sports betting. Prior to this, Nevada was the only state with unrestricted sports betting. Using sports betting data from Nevada, we estimate long-run and short-run income elasticities to determine the growth and volatility of sports betting as a tax base. Sports gambling grows at a similar rate as state income and is stable and insensitive to short-run shocks to income. However, the amount of money kept by casinos, and hence the state, is small compared to other traditional tax bases.

Keywords: sports gambling; tax revenue; income elasticity (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:jospec:v:23:y:2022:i:2:p:175-199

DOI: 10.1177/15270025211036968

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