Open Access Open Access  Restricted Access Subscription or Fee Access

The Luck of the Texan: An Empirical Analysis of Texas Lottery Games

Craig A Depken II, Paul R. Dorasil

Abstract


This paper provides an empirical analysis of the relationships between three popular lottery games in the state of Texas: Lotto Texas, Texas Two Step, and the multi-state Mega Millions game.  The analysis suggests complementarity between the Lotto Texas and Mega Millions; habitual players tend to play relatively safer games; the 2006 Lotto Texas rule change decreased revenue substantially; and that only at low effective ticket prices do players purchase more tickets for high stakes/low odds games.  We simulate the effective prices at which two games would sell the same number of tickets in the state of Texas. The results suggest that Mega Millions and Lotto Texas are expected to sell more tickets than Texas Two Step, and that Lotto Texas is expected to sell more tickets than Mega Millions at all feasible price levels.


Keywords


games of chance, gambling.

Full Text:

PDF

References


Clotfelter, Charles T. and Cook, Philip J. Selling Hope. Cambridge, MA: Harvard University Press, 1989.

DeBoer, Larry. “Lotto Sales Stagnation: Product Maturity or Small Jackpots?” Growth and Change, Winter 1990, 73-7.

Forrest, David, Gulley, O. David and Simmons, Robert. “Elasticity of Demand for UK National Lottery Tickets,” National Tax Journal, December 2000, 853 – 63.

Forrest, David, Simmons, Robert and Chesters, N. “ Buying a Dream: Alternative Models of Demand for Lotto,” Economic Inquiry, 40:3, July 2002, 485-96.

Forrest, David, Gulley, O. David and Simmons, Robert. “Substitution between Games in the UK National Lottery,” Applied Economics, April 2004, 645-51.

Gulley, O. David and Scott, Frank A., Jr. “The Demand for Wagering on State-Operated Lotto Games,” National Tax Journal. March 1993, 13-22.

Locke, Tracy. “Winning Numbers Are Everywhere.” Texas Lottery Commission. 2007.

"Lotto Texas" On-Line Game Rule. Texas Lottery Commission. 16 TAC §401.305, 31 TexReg 2851 (applies to drawings occurring after April 23, 2006).

"Lotto Texas" On-Line Game Rule. Texas Lottery Commission. 16 TAC §401.305, 28 TexReg 1317 (applies to drawings occurring after May 3, 2003).

Matheson, Victor A. and Grote, Kent R. “Dueling Jackpots: Are Competing Lotto Games Complements or Substitutes?” Atlantic Economic Journal, March 2006, 34:1, 85-100.

Matheson, Victor A. and Grote, Kent R. "Lotto Fever: do lottery players act rationally around large jackpots?" Economics Letters, Elsevier, 2004. 83-2.

"Mega Millions" On-Line Game Rule. Texas Lottery Commission. 16 TAC §401.315, 30 TexReg 3096 (applies to drawings after June 22, 2005).

National Association of Convenience Stores (2006), “Lottery Sales in Convenience Stores,” www.nacsonline.com, last accessed September 2007.

Scoggins, John F. “The Lotto and Expected Net Revenue,” National Tax Journal, March 1995, 61-70.

Stover, M.E. “Contiguous State Lotteries: Substitutes or Complements?” Journal of Policy Analysis and Management, 1990, 565-8.

Texas State Lottery Commission, Open Records Request #8169, #8193.

"Texas Two Step" On-line Game. Texas Lottery Commission. 16 TAC §401.312, 29 TexReg 4150 (applies to drawings after May 4, 2004).

U.S. Gasoline and Diesel Retail Prices, U.S. Department of Energy, Energy Information Administration, November 13th, 2006.

Wald, Abraham. “Tests of Statistical Hypotheses Concerning Several Parameters When the Number of Observations is Large.” Transactions of the American Mathematical Society. November 1943. 54-3.

Zellner, Arnold. "An Efficient Method of Estimating Seemingly Unrelated Regressions and Tests for Aggregation Bias," Journal of the American Statistical Association, June 1962, 57-298.




DOI: https://doi.org/10.5750/jgbe.v1i3.518

Refbacks

  • There are currently no refbacks.