The Income Elasticity of Gross Sports Betting Revenues in Nevada: Short-Run and Long-Run Estimates

The Income Elasticity of Gross Sports Betting Revenues in Nevada: Short-Run and Long-Run Estimates

In May 2018, the Supreme Court overturned the Professional and Amateur Sports Protection Act, thereby allowing all states to offer sports betting. Prior to this, Nevada was the only state with unrestricted sports betting. Using sports betting data from Nevada, we estimate long-run and short-run inco...

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Bibliographic Details
Published in:Journal of sports economics Vol. 23; no. 2; pp. 175 - 199
Main Authors: Can, Ege, Nichols, Mark W.
Format: Journal Article
Language:English
Published: Los Angeles, CA SAGE Publications 01-02-2022
SAGE PUBLICATIONS, INC
Subjects:
Gambling
Sports betting
United States > US
Nevada
sports gambling
income elasticity
H71
tax revenue
L83
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Summary:In May 2018, the Supreme Court overturned the Professional and Amateur Sports Protection Act, thereby allowing all states to offer sports betting. Prior to this, Nevada was the only state with unrestricted sports betting. Using sports betting data from Nevada, we estimate long-run and short-run income elasticities to determine the growth and volatility of sports betting as a tax base. Sports gambling grows at a similar rate as state income and is stable and insensitive to short-run shocks to income. However, the amount of money kept by casinos, and hence the state, is small compared to other traditional tax bases.
ISSN:1527-0025
1552-7794
DOI:10.1177/15270025211036968