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Public Finance Review
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Article

Do U.S. Gambling Industries Cannibalize Each Other?

Douglas M. Walker1* and John D. Jackson2

1 College of Charleston, South Carolina
2 Auburn University, Alabama

* To whom correspondence should be addressed. E-mail: dougwalker1{at}gmail.com.


  Abstract
Many states facing recent fiscal crises have looked to legalized gambling in an attempt to ease fiscal constraints. Although there has been some research on the economic effects of gambling, no study has offered a comprehensive analysis of the interindustry relationships of lotteries, casinos, horse racing, and greyhound racing. In this article, we use seemingly unrelated regression (SUR) estimation to analyze the relationships among gambling industries in the United States. Our results indicate that some industries "cannibalize" each other (e.g., casinos and lotteries, and horse and dog racing), whereas other industries help each other (e.g., casinos and horse racing, dog racing and lotteries, and horse racing and lotteries). The study also examines the effects of adjacent-state gambling and a variety of demographic variables. This analysis provides a foundation for further research on how to optimize tax revenues from legalized gambling.

First published on February 21, 2008, doi:10.1177/1091142106292777

Public Finance Review 2008;36:308.

A more recent version of this article appeared on May 1, 2008

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