The Effect of Recessions on Gambling Expenditures

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 1959.01–20...

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Bibliographic Details
Published inJournal of gambling studies Vol. 28; no. 4; pp. 703 - 717
Main Authors Horváth, Csilla, Paap, Richard
Format Journal Article
LanguageEnglish
Published Boston Springer US 01.12.2012
Springer Nature B.V
Subjects
Business cycles
Casinos
Cointegration analysis
Community and Environmental Psychology
Consumer behavior
Consumption
Decision Making
Economic crisis
Economic Recession
Economics
Expenditures
Gambling
Gambling - economics
Gambling industry
Humans
Income
Legalized gambling
Medicine
Medicine & Public Health
Models, Econometric
Original Paper
Psychiatry
Recessions
Recreation
Retrospective Studies
Self control
Sociology
Studies
Time series
Travel & entertainment expenses
Trends
Unemployment
United States
Gambling
Business cycle
Time series analysis
Cointegration
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Summary: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.
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ISSN:1573-3602
1050-5350
1573-3602
DOI:10.1007/s10899-011-9282-9