Has Riverboat Gambling Reduced State Lottery Revenue?

Donald S. Elliott and John C. Navin
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Donald S. Elliott: Southern Illinois University Edwardsville
John C. Navin: Southern Illinois University Edwardsville

Public Finance Review, 2002, vol. 30, issue 3, 235-247

Abstract: Over the past decade, most states have introduced lotteries, and many now license casinos. To what extent does the presence of licensed casinos cannibalize revenues from state-sponsored lotteries? To what extent does pari-mutuel betting cannibalize revenues from state-sponsored lotteries? Based on pooled cross-section data for the period from 1989 to 1995, this research reveals significant cannibalization of lottery revenues by both casinos and pari-mutuel betting. Nevertheless, states, in general, gain by having both lotteries and casinos. In the case of pari-mutuel betting, however, the substitution is so severe that, at existing effective tax rates, lost lottery revenues outweigh states’ receipts from pari-mutuel betting.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:sae:pubfin:v:30:y:2002:i:3:p:235-247

DOI: 10.1177/109114210203000304

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