Date of Graduation

1998

Document Type

Dissertation/Thesis

Abstract

This dissertation is an economic analysis of state lotteries in America. The previous areas of lottery research and the dissertation research agenda are discussed in the first chapter. The second chapter provides statistics on state lotteries. State lottery sales, net lottery revenues, the growth of lottery sales in the United States, and target sources of net lottery revenues are all presented in Chapter 2. The third chapter of the dissertation examines the process of state lottery adoption, focusing on the behavior of state legislators and voters. Insight into the significant determinants of lottery adoption are presented, along with support for several theories of legislative behavior. Chapter 4 examines the tax incidence of West Virginia instant lottery games and on-line lottery games using county level panel data. The results suggest opposing tax incidences for different types of lottery games, casting some doubt on the general regressivity of state lotteries. In addition, the panel nature of the data allows a first-time examination of intertemporal changes in the incidence of a lottery tax. Chapter 5 explores the risk and return characteristics of lottery games as determinants of lottery sales. The expected value, variance, skewness, and kurtosis of all United States' lottery games are computed. The empirical results not only provide insight into the risk preferences of lottery players, but they suggest the optimal lottery game structure in terms of revenue maximization. The final research chapter of the dissertation examines the impact of video lottery on parimutuel racing revenues, focusing on two dogracing tracks in West Virginia. Evidence suggests that video lottery led to an initial increase in racing revenues, but the decade long decline in parimutuel racing continues. The findings have significant implications for track owners and the state. Chapter 7 provides a summary of the dissertation and concluding comments on the future of state lotteries in America.

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