Abstract
This article examines the influence of the business cycle on expenditures of three major types of legalized gambling activities:
Casino gambling, lottery, and pari-mutuel wagering. Empirical results are obtained using monthly aggregated US per capita
consumption time series for the period 1959.01–2010.08. Among the three gambling activities only lottery consumption appears
to be recession-proof. This series is characterized by a vast and solid growth that exceeds the growth in income and the growth
in other gambling sectors. Casino gambling expenditures show a positive growth during expansions and no growth during recessions.
Hence, the loss in income during recessions affects casino gambling. However, income shocks which are not directly related
to the business cycle do not influence casino gambling expenditures. Pari-mutuel wagering displays an overall negative trend
and its average growth rate is smaller than the growth in income, especially during recessions. The findings of this article
provide important implications for the gambling industry and for local governments.
Casino gambling, lottery, and pari-mutuel wagering. Empirical results are obtained using monthly aggregated US per capita
consumption time series for the period 1959.01–2010.08. Among the three gambling activities only lottery consumption appears
to be recession-proof. This series is characterized by a vast and solid growth that exceeds the growth in income and the growth
in other gambling sectors. Casino gambling expenditures show a positive growth during expansions and no growth during recessions.
Hence, the loss in income during recessions affects casino gambling. However, income shocks which are not directly related
to the business cycle do not influence casino gambling expenditures. Pari-mutuel wagering displays an overall negative trend
and its average growth rate is smaller than the growth in income, especially during recessions. The findings of this article
provide important implications for the gambling industry and for local governments.
- Content Type Journal Article
- Category Original Paper
- Pages 1-15
- DOI 10.1007/s10899-011-9282-9
- Authors
- Csilla Horváth, Department of Strategy and Marketing, Institute for Management Research, Radboud University, P.O. Box 9108, 6500 HK Nijmegen, The Netherlands
- Richard Paap, Econometric Institute, Erasmus University Rotterdam, Rotterdam, The Netherlands
- Journal Journal of Gambling Studies
- Online ISSN 1573-3602
- Print ISSN 1050-5350