Examining the Influence of Sports Betting Legalization on State and Local Lotteries
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Date
2024
Authors
Willman, Sam
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon
Abstract
This thesis investigated the impact of the legalization of sports betting on state lottery revenue in the United States. Using regression analysis (particularly the difference in differences method) and a comprehensive dataset spanning multiple years and states, I analyzed the effects of sports betting legalization on total lottery revenue, tax revenue generated from sports betting, and combined revenue from lottery and sports betting taxes. The findings revealed significant effects of sports betting legalization on state lottery revenue. Firstly, states that legalized sports betting experienced a notable decrease in total lottery revenue compared to states that did not legalize sports betting. This decrease was statistically significant, indicating a substantial shift in revenue patterns following legalization. Additionally, the analysis showed that the introduction of sports betting led to an increase in tax revenue generated from sports betting activities, as expected. Looking at the overall state revenue implications, I found that states lost an average of $38.7 million when comparing the gains from sports betting tax revenue and the losses from lottery revenue. These findings underscore the importance of considering both the direct and indirect revenue implications of sports betting legalization, especially for policymakers, stakeholders, and researchers seeking to understand the economic and social effects of sports betting expansion.
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Keywords
Sports betting, Lottery, Econometrics, Policy change, Revenue