The market for EuroMillions: jackpot sharing and implicit transfer of funds among countries

Álvaro Muñiz and Levi Pérez
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Álvaro Muñiz: University of Oviedo

Economia Politica: Journal of Analytical and Institutional Economics, 2023, vol. 40, issue 3, No 5, 817-833

Abstract: Abstract Multi-country (state) lottery markets have emerged worldwide as an attempt to revert the decline in lottery sales. These markets allow operators to offer appealing large prizes by combining the markets of separate lottery jurisdictions. An analysis of EuroMillions’ jackpot sharing among countries of different market size shows that some countries tend to claim higher jackpots and achieve higher payout rates, while others seem to be systematically disadvantaged. This paper elaborates on whether this unequal jackpot distribution is caused by different demand behavior and market share trends in the market for EuroMillions. Evidence shows that such distribution of the jackpot is explained by differences in jackpot elasticity of the demand among countries, which causes, at the same time, variations in the market share and draw winning odds per country. As a result, some countries may then benefit from the funds that have been contributed to the prize pool by the rest, raising some implicit funding issues (net payout balance) and questioning the optimality of jackpot sharing.

Keywords: Multi-country lotteries; EuroMillions; Jackpot distribution; Jackpot elasticity; Sales market share; Net payout balance; Optimal jackpot sharing; Implicit transfer of funds (search for similar items in EconPapers)
JEL-codes: D40 H23 L11 L83 R12 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s40888-023-00316-9

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