Legalized Sports Betting VLT Gambling and State Gambling Revenues Evidence from West Virginia

Legalized Sports Betting, VLT Gambling, and State Gambling Revenues: Evidence from West Virginia

The Supreme Court ruling, which legalized sportsbetting in the United States, has legalized sports betting to get new tax revenues from betting on sports events. Most states have already acknowledged other forms of gambling and have obtained tax revenues from these financial resources. Letters that analyze consumer alternatives in gambling expenditures include several evidence on the impact of many kinds of gambling, but there is no evidence on the impact of sports betting. This article analyzes the impact of sports betting on other casino gambles, using the legalization of sports betting and the opening of sportsbooks in West Virginia. According to data using Instrumental VariableS and Difference-In-Differences, the increase in consumption spending on sports betting has greatly reduced spending on casino lottery terminals (VLTs) that generate tax revenue. Financial impact includes a new tax revenue by sports betting and a decrease of $ 45. 4 million in VLT tax revenue due to the expansion of sports betting.

The US Experience with Sports Betting

Outside of the United States: The Worldwide Availability of Sports Betting

Sports Betting in Canada: Legal Perspectives from Two Years of Legal Single-Game Wagering

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Introduction

On May 14, 2018, the US Supreme Court (SCOTUS) unconstitutional in the 1992 Professional Amusports Protection Law (PASPA). PASPA made Sportsbetting legal in Nevada, which became illegal in almost all other states. After the ruling of the Federal District Court, the authority to legalize and regulate sports betting was delegated to each state.

Some states have legalized Sportsbetting immediately after the ruling. Delaware, New Jersey, Mississippi, West Virginia, Lord Island, Pennsylvania, New Humpshire, Lord Island, Arkansaw, New York, Illinois, Indiana, Ilova, Monta, Colorado, Colorado. Lina , Tennessee's 17 states have legalized sports betting as of early 2020. Many other states are currently considering legalization. The Supreme Court ruling, which legalized sportsbetting in the United States, has now legalized sports betting to earn new tax revenues from betting on sports events. Most states have already acknowledged other forms of gambling and have obtained tax revenues from these financial resources. Letters that analyze consumer alternatives in gambling expenditures include several evidence on the impact of many kinds of gambling, but there is no evidence on the impact of sports betting. This article analyzes the impact of sports betting on other casino gambles, using the legalization of sports betting and the opening of sportsbooks in West Virginia. According to data using Instrumental VariableS and Difference-In-Differences, the increase in consumption spending on sports betting has greatly reduced spending on casino lottery terminals (VLTs) that generate tax revenue. Financial impact includes a new tax revenue by sports betting and a decrease of $ 45. 4 million in VLT tax revenue due to the expansion of sports betting.

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Some states have legalized Sportsbetting immediately after the ruling. Delaware, New Jersey, Mississippi, West Virginia, Lord Island, Pennsylvania, New Humpshire, Lord Island, Arkansaw, New York, Illinois, Indiana, Ilova, Monta, Colorado, Colorado. Lina , Tennessee's 17 states have legalized sports betting as of early 2020. Many other states are currently considering legalization. The Supreme Court ruling, which legalized sportsbetting in the United States, has legalized sports betting to get new tax revenues from betting on sports events. Most states have already acknowledged other forms of gambling and have obtained tax revenues from these financial resources. Letters that analyze consumer alternatives in gambling expenditures include several evidence on the impact of many kinds of gambling, but there is no evidence on the impact of sports betting. This article analyzes the impact of sports betting on other casino gambles, using the legalization of sports betting and the opening of sportsbooks in West Virginia. According to data using Instrumental VariableS and Difference-In-Differences, the increase in consumption spending on sports betting has greatly reduced spending on casino lottery terminals (VLTs) that generate tax revenue. Financial impact includes a new tax revenue by sports betting and a decrease of $ 45. 4 million in VLT tax revenue due to the expansion of sports betting.

West Virginia Gambling in Context

Paper Open Access April 11, 2024

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Each state legalizes sports betting is to get new tax revenues. In general, the license fee for running a sports book and the tax for pure income obtained from bookmarking. However, most states that legalize sports betting have already earned a lot of tax revenue from other forms of gambling, such as lottery, video lottery devices (VLT), and casino gambling. To understand the impact of the legalization of sports betting on the finances, it is necessary to understand the relationship between consumer spending to sports betting and other types of casino gambling. Evidence of legalization and expansion of sports betting on the impact on consumer spending on other gambling is limited, and the literature is called crabization.

A recent research paper on evidence on the rules of the gambling market did not have any existing research on the legalization and expansion of sports betting on other types of gambling (Marionneau and Nikkinen 2017). The papers discovered that the opening of a new casino reduces the frequency of consumer sports betting is only one ROOM and others (1999) based on the opening of a casino in Canada, and other casinos are opened. Nothing analyzed the effects of revenue. Three papers (Miers 1996, Forrest 1999, Forrest and Pérez 2011) analyzes the effects of expanding lotteries in soccer poo l-style sportsbets in the UK and Spain. Evidence in these paper suggests that the introduction of lottery has essentially a canbalization of football betting.

There are also studies that use the cros s-cutting change in the possibility of gambling to evaluate how much gambling spending on gambling changes with other kinds of gambling. Papers in this field include Walker and Jackson (2008), Farrell and Forrest (2008), Paton and Williams (2013), and Cummings et al. (2017). Most of these studies use relatively aggregated data at the annual level of state or county. These studies generally report evidence of regional crossing or exclusion in the gambling market.

In this paper, the lack of evidence is verified using West Virginia's data on the impact of the expansion of sports betting on the casino income by table games and VLT. This is the first evidence of a causal relationship that consumer betting to sports betting reduces consumer bets on VLT. This paper contributes to the literature on the gambling market by taking advantage of the unusual causes of external life fluctuations in the possibility of gambling at the individual casino level. In addition, this literature focuses on the changes in the flow of two different gaming tax revenues that have not been analyzed so far, so that the gaming tax revenue is analyzed in a more extensive context of state tax revenue (Nichols et al.

West Virginia casinos have opened five new sportsbooks from September to December 2018. The government's tax revenue last year (July 2017 to June 2018) was $ 38 million from the table game and $ 253 million from the VLT installed in the casino. The result of a variable average approach, which is used in a framework of the sportsbook time and two sports books in the framework of the difference difference, is an additional $ 1 addition of sportsbetting in a casino in West Virginia. It indicates that the VLT income of the casino has decreased by $ 3, 96, and the VLT income elasticity against the change in the sports betting steering wheel is 0, 18 in the average distribution. Sportsbetting did not affect the casino table game revenue.

Regarding lost tax revenue, West Virginia tax 53, 5 % for VLT pure income and 10 % for sportsbook pure income. From September 2018 to March 2020 due to the decrease in VLT income due to legalization of sports betting, all casinos in West Virginia were closed due to health concerns caused by new colonavirus. A $ 45 million VLT tax revenue was lost. Instead, a legalized sports betting in West Virginia has created a new tax revenue of $ 2. 6 million during that period. In this paper, the lack of evidence using West Virginia's data on the impact of sports betting on the casino income by table games and VLT. This is the first evidence of a causal relationship that consumer betting to sports betting reduces consumer bets on VLT. This paper contributes to the literature on the gambling market by taking advantage of the unusual causes of external life fluctuations in the possibility of gambling at the individual casino level. In addition, this literature focuses on the changes in the flow of two different gaming tax revenues that have not been analyzed so far, so that the gaming tax revenue is analyzed in a more extensive context of state tax revenue (Nichols et al.

West Virginia's casinos have opened five new sportsbooks from September to December 2018. The government's tax revenue last year (July 2017 to June 2018) was $ 38 million from the table game and $ 253 million from the VLT installed in the casino. The result of a variable average approach, which is used in a framework of the sportsbook time and two sports books in the framework of the difference difference, is an additional $ 1 addition of sportsbetting in a casino in West Virginia. It indicates that the VLT income of the casino has decreased by $ 3, 96, and the VLT income elasticity against the change in the sports betting steering wheel is 0, 18 in the average distribution. Sportsbetting did not affect the casino table game revenue.

Regarding lost tax revenue, West Virginia tax 53, 5 % for VLT pure income and 10 % for sportsbook pure income. From September 2018 to March 2020 due to the decrease in VLT income due to legalization of sports betting, all casinos in West Virginia were closed due to health concerns caused by new colonavirus. A $ 45 million VLT tax revenue was lost. Instead, a legalized sports betting in West Virginia has created a new tax revenue of $ 2. 6 million during that period. In this paper, the lack of evidence is verified using West Virginia's data on the impact of the expansion of sports betting on the casino income by table games and VLT. This is the first evidence of a causal relationship that consumer betting to sports betting reduces consumer bets on VLT. This paper contributes to the literature on the gambling market by taking advantage of the unusual causes of external life fluctuations in the possibility of gambling at the individual casino level. In addition, this literature focuses on the changes in the flow of two different gaming tax revenues that have not been analyzed so far, so that the gaming tax revenue is analyzed in a more extensive context of state tax revenue (Nichols et al.

The West Virginia Lottery Commission (WVLC) regulates all gambling in the state. West Virginia has five licensed casinos with table games and VLTs. Four of them also operate horse or greyhound racing. The fifth casino, the Greenbrier Hotel, is a historic resort hotel and operates under separate gaming regulations. Horse racing has been legal since 1933 when Charlestown Racetrack opened. Lottery ticket sales began in 1984. Video Lottery Terminals (VLTs) began in 1994 with racing only. Table-based games began on all five in 2008.

In 2001, the Limited Videotape Act changed the nature of VLT gaming in the state, eliminating all existing machines and mandating the installation of new VLTs, limiting the number of VLTs to 9, 000, and allowing VLTs in standalone locations outside of racing. Currently, the state has approximately 1300 freestanding state-owned stores that also sell alcohol, called "hot spots," and significant video game gambling in all casinos. Hot spots can have up to five VLTs.

Figure 1 shows the locations of the five casinos in West Virginia and all cities with populations over 20, 000. Hollywood Casino, located in the Eastern Panhandle, is located in the Washington DC SMSA, 63 miles from Downtown Washington DC and 75 miles from Baltimore. Mardi Gras Casino is located between the two largest cities in the state, Charleston (population 46, 536) and Huntington (population 45, 111), and is a little over three hours' drive from Cincinnati, Ohio. Greenbrier, located in white sulfur springs in the southeastern part of the state, is a historic resort and tourist destination, but is not in close proximity to any of West Virginia's major cities or larger towns. The other two cities shown in Figure 1, Morgantown and Parkersburg, each had a population of approximately 30, 000 in 2019.

Empirical Analysis

Data

Figure 1

Casinos and Major Cities in West Virginia

Table 1 summarizes the characteristics of the five casinos in West Virginia. The four casinos in Racing operate under the same regulations. The Greenbrier Casino operates under different regulations and taxes. Delaware North owns and operates two casinos associated with Nitro (Mardi Gras) and the dog track in Wheeling. Hollywood Casino is owned and operated by gaming giant Penn National. Current West Virginia Governor Jim Justice owns and operates Greenbrier Resort & Casino. All casinos in the state, except for Greenbrier, operate numerous VLTs.

West Virginia taxes gambling in various ways. The four gaming casinos pay annual license fees of $500, 000 to operate VLTs and table games. Greenbrier Casino pays annual license fees based on average table game revenues to the other four casinos. The state taxes net VLT revenues at 53. 5% and adjusted gross table revenues at 35%. Total VLT revenues at gaming casinos for fiscal year (FY) 2018 (July 2017-June 2018) were $5. 6 billion. VLT gambling at Greenbrier Casino generated only $4. 8 million in revenues. Taxable VLT receipts totaled $485 million, with only $1. 4 million generated at Greenbrier. Tax revenues from VLT casinos totaled $257 million in 2018. This revenue goes to a variety of sources, including purse funds, racetrack employee pensions, mutual funds, and various county and municipal governments. Total table game revenues for FY 2018 were $105 million, including $5 million at Greenbrier. This generated just over $35 million in tax revenues in 2018. Table 1 Characteristics of Casinos in West Virginia The legalization of sports betting added a new gambling option to West Virginia's existing portfolio of legal gambling. The addition of a new form of gambling to a market with existing gambling opportunities can lead to a variety of changes. Legalized sports betting could attract new consumers to casinos or generate mobile betting accounts among non-participants who are not interested in betting on VLTs, table games, or races, increasing gaming spending and tax revenues. Alternatively, the legalization of sports betting could cause existing gamblers to switch some or all of their gambling consumption from their existing gambling, a phenomenon known in the existing literature as cannibalization.

Gambling literature (Marioneau and Nikkinen 2017) reports a wide range of evidence that a substantial crabization is occurring among other kinds of gambling. This survey contains the substantial evidence of existing casino spending can ballization by many other kinds of gambling, including lottery, VLT, and Pari-Mutuel gambling. This survey showed that pr e-research on crabism by sports betting was rarely found in existing literature.

In recent economic literature, there are several papers that analyze the crabism in other gambling markets. FORREST et al. (2010) discovered evidence that the price of a large lottery generated by the jackpot has reduced the bet money in the UK, using the data of a national bookmaker from 1996 to 2001. 。 Farrell and Forrest (2008) analyzed several cases of Cannibalization in the Gambling Market Australia, using annual data from 1982 to 2001. They report evidence that electronic gambling machines and online carosen games are crabed on expenditures on hig h-priced jackp lottery games. FORREST AND Pérez (2011) analyzed the effects of the expansion of lotteries in soccer poo l-style sports betting in Spain over the long period of 1970 to 2007. As a result, it suggested that the introduction of a large winning lottery in 1985 effectively crabed on billiard soccer betting based on the difference. The recent

There are also papers that analyze individual casino data and clarify the relationship between various casino income sources in casino management. Abarbanel et al. (2011) analyzed the relationship between daily revenue from slot machines and dollars betting in sportsbooks at a single casino in Las Vegas from January to September 2009. SUH and TSAI (2013) analyzed the relationship between the daily slot machines and the number of pokers who poker at two Las Vegas casinos in 2005 and 2006. In this paper, the statistical relationship between the number of poker players and the machine revenue has been reported. Lucas (2014) analyzed the relationship between the daily profits created by the slot machine and the dollar bet in a sportsbook at three Las Vegas casinos from February to August 2009. In this document, two casinos did not report any statistical relationships between dollars and slot machines bet on sportsbooks. In the third casino, the number of dollars betting on sports books increased the profits created by slot machines. As the sportsbook betting increased by 1%, the income of the slot machine increased by 0. 04%.

All of these three papers analyze the relationship between the existing sportsbook and the VLT/ slot machine revenue using the standard normal minimum square (OLS) regression model. The general survey results of this literature do not suggest the relationship between the sportsbook and the economic activity in the VLT machine, but none of these papers have tried to analyze these gambling causal relationships. 。 These paper did not use external changes in sports betting opportunities, such as West Virginia. It does not mention the impact of these different types of gambling on tax revenue. There are also papers that analyze individual casino data and reveal the relationship between various casino income sources in casino management. Abarbanel et al. (2011) analyzed the relationship between daily revenue from slot machines and dollars betting in sportsbooks at a single casino in Las Vegas from January to September 2009. SUH and TSAI (2013) analyzed the relationship between the daily slot machines and the number of pokers who poker at two Las Vegas casinos in 2005 and 2006. In this paper, the statistical relationship between the number of poker players and the machine revenue has been reported. Lucas (2014) analyzed the relationship between the daily profits created by the slot machine and the dollar bet in a sportsbook at three Las Vegas casinos from February to August 2009. In this document, two casinos did not report any statistical relationships between dollars and slot machines bet on sportsbooks. In the third casino, the number of dollars betting on sports books increased the profits created by slot machines. As the sportsbook betting increased by 1%, the income of the slot machine increased by 0. 04%.

All of these three papers analyze the relationship between the existing sportsbook and the VLT/ slot machine revenue using the standard normal minimum square (OLS) regression model. The general survey results of this literature do not suggest the relationship between the sportsbook and the economic activity in the VLT machine, but none of these papers have tried to analyze these gambling causal relationships. 。 These paper did not use external changes in sports betting opportunities, such as West Virginia. It does not mention the impact of these different types of gambling on tax revenue. There are also papers that analyze individual casino data and clarify the relationship between various casino income sources in casino management. Abarbanel et al. (2011) analyzed the relationship between daily revenue from slot machines and dollars betting in sportsbooks at a single casino in Las Vegas from January to September 2009. SUH and TSAI (2013) analyzed the relationship between the daily slot machines and the number of pokers who poker at two Las Vegas casinos in 2005 and 2006. In this paper, the statistical relationship between the number of poker players and the machine revenue has been reported. Lucas (2014) analyzed the relationship between the daily profits created by the slot machine and the dollar bet in a sportsbook at three Las Vegas casinos from February to August 2009. In this document, two casinos did not report any statistical relationships between dollars and slot machines bet on sportsbooks. In the third casino, the number of dollars betting on sports books increased the profits created by slot machines. As the sportsbook betting increased by 1%, the income of the slot machine increased by 0. 04%.

Determinants of Sports Betting Handle

States, which are rushing to legalize sports betting, seems to have little consider the potential effects of the legalization of sports betting on other existing gambling income and taxes. Although there are few evidence based on sports betting, many research reports that there are many gambling in other forms of gambling. The presence of cannibalization in other environments is the tax revenue from the gambling gambling.

West Virginia's Sports Betting has been hit by some unexpected events and is an interesting stage in studying the takeover of sports betting in the gambling market. Legalization was performed early in West Virginia. The parliament legalized on March 3, 2018, and the United States Supreme Court (Scotus) overturns PASPA and a state other than Nevada can legalize and regulate sports betting. That was. Like other gambling, the West Virginia Lottery Committee regulates sports betting in the state. West Virginia is taxed on pure income of sports betting and taxes of 10 % of the total amount of sports betting tickets, a winning ticket and blank (mainly a bet).

The first sportsbook operated by William Hill opened on August 30, 2018 in Hollywood Casino, Charles Town. The Green Brier Casino sportsbook, run by Duel fans, opened a week later. Both were continuously operated by a novel of a prosecutor until all casinos in West Virginia were closed in March 2020. Others in the state did not open a sportsbook until 2018. The Mountainian Casino sportbook on the Northern Pan Handle, operated by William Hill, opened on November 21. The two casino sportsbooks, Delaware North, and Weeling Island and Mardigra Casino, opened on the same day on December 27, 2018. MIOMNI GAMING operated these two sports books and used a mobile app that only registered users can do.

Delaware North was involved in a license dispute with MIOMNI GAMING in February 2019. All mobile betting related to the Sports Book operated by MIOMNI stopped operating on March 6, 2019. These two casino sports books were not resumed until early February 2020. Neither of them continued the bed from the mobile device. The closure and the opening of the two sportsbooks after that are unexpected shocks for the West Virginia gaming market, and other independent factors that affect the market should be foreign.

The uneven growth of sports betting in West Virginia shows an interesting environment in analyzing the impact of sports betting on other casino revenue sources. Sports betting at Mountaineer casinos, Hollywood casinos, and Greenbrier casinos can only be performed in casinos where VLT and table games are also performed. Wheeling Island and Mardi Gras sports betting were held in both sportsbooks and mobile apps for a while, but were suddenly closed and resumed in the casino more than a year later. These events are the factors of foreign fluctuations in the opportunity to bet on sporting events in the state, and can be used in empirical analysis. Delaware North was involved in a license dispute with MIOMNI GAMING in February 2019. All mobile betting related to the Sports Book operated by MIOMNI stopped operating on March 6, 2019. These two casino sports books were not resumed until early February 2020. Neither of them continued the bed from the mobile device. The closure and the opening of the two sportsbooks after that are unexpected shocks for the West Virginia gaming market, and other independent factors that affect the market should be foreign.

Other casinos eventually provided mobile betting to the state. Hollywood Casino partnered with Draftkings in the spring of 2019 and provided mobile betting. On May 22, WVLC issued a mobile gambling license to Hollywood/Draftkings. One week later, WVLC suspended the license, saying that there was concern about the applicability of the mobile gambling in the state. Hollywood casinos have just started accepting mobile gambling in early August 2019. Green Brier also started accepting bets from mobile devices at the same time. The sportsbook casino Mountaineer at the northern end does not accept beds from mobile devices The uneven growth of sports betting in West Virginia shows an interesting environment in analyzing the impact of sports betting on other casino revenue sources. Sports betting at Mountaineer casinos, Hollywood casinos, and Greenbrier casinos can only be performed in casinos where VLT and table games are also performed. Wheeling Island and Mardi Gras sports betting were held in both sportsbooks and mobile apps for a while, but were suddenly closed and resumed in the casino more than a year later. These events are the factors of foreign fluctuations in the opportunity to bet on sporting events in the state, and can be used in empirical analysis. Delaware North was involved in a license dispute with MIOMNI GAMING in February 2019. All mobile betting related to the Sports Book operated by MIOMNI stopped operating on March 6, 2019. These two casino sports books were not resumed until early February 2020. Neither of them continued the bed from the mobile device. The closure and the opening of the two sportsbooks after that are unexpected shocks for the West Virginia gaming market, and other independent factors that affect the market should be foreign $$

The data comes from the Lottery Corporation's weekly reports on gambling in West Virginia. These reports contain data on each of the five casinos' gambling activities collected for the week ending on the Saturday of each week. The data file contains information on each casino's weekly VLT and table game revenues, as well as the weekly total value of sports betting tickets written at each sportsbook (including mobile device bets, if open or available). The data file also includes dollar amounts won across the three types of gaming, among other information. I analyzed data from the week including Saturday, September 1, when the sportsbook opened at Hollywood Casino, through the week including March 7, 2020, when all casinos in West Virginia were closed due to a new outbreak of coronavirus. Sports betting revenues were recorded as zero during weeks when the sportsbook was not open. We augmented this data with information on the number of games played per week in the National Football League (NFL), National Basketball Association (NBA), Major League Baseball (MLB), National Hockey League (NHL), and National Collegiate Athletic Association Football (NCAA FB), which are sports that are popular with North American players. Footnote 1 Variation in the number of games played per week in these sports creates variation in gamblers' betting demand. This is because the more games played per week, the more likely it is that financially motivated gamblers will find attractive games to bet on, or because gamblers with behavioral biases, such as sentiment bias, will observe the games of their favorite teams as betting targets. This variation also reflects exogenous factors, such as idiosyncratic factors related to league schedules, such as weekly holidays and holidays, travel time between games, and facility availability, as well as unobservable factors that affect gambling purchases. These variables should be reasonably exogenous to other unobservable factors.

Table 2 provides basic summary statistics for the weekly variables related to sports betting. Observations represent values aggregated to the level of calendar weeks ending on Saturday. The average number of matches per week reflects only those weeks in which matches were played.

Sportsbook handles represent the total amount of sports betting tickets placed at each sportsbook each week. Sportsbook holds are sports betting revenues (holds minus blanks minus cashed winning tickets) as a percentage of holds and are a common indicator of sportsbook profitability. VLT and table game revenues represent the total amount of money wagered on each gamble. All variables are expressed in nominal terms because the sample period was less than two calendar years and a very low inflation environment.

Table 2 Summary Statistics - Weekly Data

The average sportsbook took in just under $1 million per week. Sportsbook holds are relatively large, averaging 10%. Nevada sportsbook holds averaged 5. 75% in 2018. Weekly holds show large variations over the sample period, mainly due to zeros for this variable. VLT revenues significantly outnumbered sportsbooks, averaging nearly $21 million per week across all casinos in the state. Table game revenue averaged over $400, 000 per week. The 11-week period in 2019 when Wheeling and Mardi Gras offered mobile sports betting, identified as Mobile Betting Season 1, accounted for 14% of the sample. The period from 2019 to 2020 when Charles Town and Greenbrier offered mobile betting, identified as Mobile Betting Season 2, accounted for 34% of the weeks in the sample. The period when Mardi Gras Sportsbook and Wheeling Casino were closed accounted for approximately 60% of the weeks in the sample.

Impact of Sports Betting on Other Casino Revenues

The following sportsbook handle variance analysis uses the variance in the number of games played each week in the NFL, NBA, MLB, NHL, and National Collegiate Athletic Association Football Bowl Subdivision to explain the observed variance in sportsbook handle. Games played in these leagues span the entire calendar year. These variables show significant variation over the sample period.

Table 3 Summary Statistics by Casino

Table 3 is a summary statistics of the main gambling earning data by casino during the sample period. Table 3 reveals that there are significant heterogeneity among the five casinos in West Virginia. Hollywood Casino in Charles Town, located in the eastern region near Washington DC, has more remarkable gambling income per week than the other four casinos, more than $ 52 million per week. In the VLT gambling, Hollywood Casino collected more than $ 53 million per week during the sample period. In the 2018 fiscal year from July 2017 to June 2018, Hollywood Casino earned over $ 2. 9 billion. The Greenbrier, located in the relatively isolated southeast, is much less weekly than the other four casinos.

Figure 2 shows the actual weekly sports betting handle at each casino, including that, when mobile betting is possible. This figure emphasizes the change of sports betting during the sample period. The gray line at the top indicates a weekly total handling of Hollywood Casino in Charles Town, and operates a larger gambling than the other four casinos. The gray line below shows the sum of Greenbrier's weekly handles, two weeks after Hollywood and in early September. Greenbrier's sportsbooks are small. The gray line in the middle indicates a weekly handling amount of Mountaineer Casino's sportsbook at the northern end.

The two black lines indicate a week of total handling of two casinos operated by Delaware North (Mardi Gras between Charleston and Huntington, Wheeling ISland in the northern part of the wheeling area). These two sportsbooks were slower than other states and stopped operating on March 6 due to a dispute with the sportsbook operating company, MIOMNI GAMING. It was in February 2020, near the end of the sample period. Both maintained a relatively small handling volume.

Icon 2

Weekly sports book from casino

The obvious increase in the weekly handle of Hollywood, Mountaineer, and Greenbrier in April includes half of the first round of the NCAA Men's College Basketball Tournament, which is a prestigious event featuring athletes, and half of the secon d-round match. Come from the week.

First, analyze the factors for determining the grip of the sportsbook. Due to lack of data, there are few research on individual sportsbook grip. The fluctuation of the weekly handle in the sportsbook reflects the gambler's decision to bet on sports events. Many factors, such as the price (point spreads and odds) provided by the sports book, the charm of the matches, the seasonal factors, the presence or absence of games played between popular teams, and other factors affect these decisions. There is a possibility. I assume that the number of games that can be bet is an important factor that affects the team to make a bet and the size of the bed. In order to quantify this, we collected data on weekly games in the four major professional leagues (NFL, NBA, NHL, MLB) and NCAA FBS College Football (Table 2).

The regression models that explain the fluctuations of the weekly sportsbook handles are as follows:

$ About \ Begin

H_ = ㊟ VARPHI _I + ㊟ Beta _1 g_ + ㊟ Beta _2 C_W + ㊟ ETA _ ㊟ END

Here, (H_ ∕) reflects the weekly handle of the Casino I sports book in W week. Vector (G_ ⅳ) reflects the total number of games played in Sports J in the W week. Vector (C_W II) reflects a specific event that affects the sports betting environment in the state in the W week. These events include the period before the opening of the Hollywood sportsbook, the period after Mardi Gras and Wheeling interrupted sports betting, and ( Except for Hollywood) Includes index variables several weeks after the operation of each sportsbook is started, taking into account the results of the startup. Ⓐ (ⓐ eta_ⓐ), an error of the equation, captures all other indiscriminate factors that affect the sportsbook that handles the sampling period. I assume that this variable takes a normal average zero, probably different from different distributed characteristics, and adjusts all estimated standard errors with different distribution. First, we analyze the determination of the sportsbook grip. Due to lack of data, there are few research on individual sportsbook grip. The fluctuation of the weekly handle in the sportsbook reflects the gambler's decision to bet on sports events. Many factors, such as the price (point spreads and odds) provided by the sports book, the charm of the matches, the seasonal factors, the presence or absence of games played between popular teams, and other factors affect these decisions. There is a possibility. I assume that the number of games that can be bet is an important factor that affects the team to make a bet and the size of the bed. In order to quantify this, we collected data on weekly games in the four major professional leagues (NFL, NBA, NHL, MLB) and NCAA FBS College Football (Table 2).

The regression models that explain the fluctuations of the weekly sportsbook handles are as follows:

$ About \ Begin

H_ = ㊟ VARPHI _I + ㊟ Beta _1 g_ + ㊟ Beta _2 C_W + ㊟ ETA _ ㊟ END

Here, (H_ ∕) reflects the weekly handle of the Casino I sports book in W week. Vector (G_ ⅳ) reflects the total number of games played in Sports J in the W week. Vector (C_W II) reflects a specific event that affects the sports betting environment in the state in the W week. These events include the period before the opening of the Hollywood sportsbook, the period after Mardi Gras and Wheeling interrupted sports betting, and ( Except for Hollywood) Includes index variables several weeks after the operation of each sportsbook is started, taking into account the results of the startup. Ⓐ (ⓐ eta_ⓐ), an error of the equation, captures all other indiscriminate factors that affect the sportsbook that handles the sampling period. I assume that this variable takes a normal average zero, probably different from different distributed characteristics, and adjusts all estimated standard errors with different distribution. First, analyze the factors for determining the grip of the sportsbook. Due to lack of data, there are few research on individual sportsbook grip. The fluctuation of the weekly handle in the sportsbook reflects the gambler's decision to bet on sports events. Many factors, such as the price (point spreads and odds) provided by the sports book, the charm of the matches, the seasonal factors, the presence or absence of games played between popular teams, and other factors affect these decisions. There is a possibility. I assume that the number of games that can be bet is an important factor that affects the team to make a bet and the size of the bed. In order to quantify this, we collected data on weekly games in the four major professional leagues (NFL, NBA, NHL, MLB) and NCAA FBS College Football (Table 2).

The regression models that explain the fluctuations of the weekly sportsbook handles are as follows:

$ About \ Begin

Conclusions

H_ = ㊟ VARPHI _I + ㊟ Beta _1 g_ + ㊟ Beta _2 C_W + ㊟ ETA _ ㊟ END

Table 4 shows the results of the two alternative regression models. The first is an abbreviation of dummy variables during the period when mobile betting was available, and the second is an alternative model that contains two variables for two periods of mobile deviceberting. Note that the complexity of the effects of mobile betting comes from the fact that Maldigla and Weeling Island have been provided in the same period as Infitian Betting. Again, the period 1 is the time when Mardi Gras and Wheeling Island provide mobile gambling, and the period 2 was the time when Hollywood and Greenburier provided mobile gambling.

Table 4 Return s-Number of Sports Book Operation Week

Notes

Some interesting patterns emerge from Table 4. Regarding the effects of a betable game, the number of games each week increases as the number of NFL and NBA games increases, and the parameter estimation of variables that reflects the number of NCAA football games in the week is almost zero at the conventional level. Statistically different. The number of games that can be betting every week affects Better's decisio n-making. The increase in the number of NFL games on the steering wheel will greatly exceed the increase in NBA and NCAA football games. Including individual indicators in basketball football and men's basketball games at the University of West Virginia, these games have shown that these games do not affect the steering wheel.

References

Table 4 also shows data on the start result of sports betting. The estimated parameters of the first week's index variables in which the sportsbook opened are large and negative, because many sportsbooks opened on Friday or Saturday, and the betting date of the week was only one or two days. It reflects that. Both the second and third weeks have a negative impact as the fullbereting week. This suggests that gamblers need some time until they know that the sportsbook has opened and decide to go to the book and bet. The parameter estimation value after the third week is not statistically different from zero. In the third week, the sportsbook reached the average handle during the sampling period.
The presence of mobile betting increased in-person sportsbook turnover across states. Only Mardi Gras and Wheeling Island offered mobile betting in period 1, and these two casinos operated sportsbooks at the same time. The Hollywood and Greenbrier offered mobile betting in period 2. The estimated parameters for the mobile betting index variable suggest that the availability of mobile betting is a complementary activity to in-range sports betting in both periods. Mobile betting does not evolve into in-range betting at sportsbooks.
The handle variables used in Table 4 take on a value of zero in weeks when the casino does not operate a sportsbook. This creates a balanced panel during the sample period. This implicitly assumes that no players come to the casino to play sports during the sample period. This may be an inappropriate assumption. Table 6 in the Appendix contains the results of omitting observations in weeks when the casino does not operate a sportsbook. This reduces the sample size from 190 to 122. The results in Table 6 are similar to those in Table 4, with the caveat that in Table 6 the boot effect continues through the fifth week of operation. This result appears to be robust to the method of quantifying weeks in which a casino does not offer sports betting.
The literature contains numerous papers documenting the shift effect of consumer spending on gambling. Most of these papers use data collected at state, county, and zip code data. A few use data for individual casinos. The legalization of sports betting presents an interesting setting in which to analyze the displacement effect. All of the sports betting in our sample of West Virginians took place at sportsbooks, with the exception of mobile sports betting offered by Mardi Gras and Wheeling Island Casinos. These sportsbooks are operated at casinos in close proximity to existing table games and VLTs.
The impact of the newly legalized sports betting on other casinos cannot be determined in advance. Gamblers who have never visited a casino to play table games and VLTs will increase the opportunity to visit casinos by betting on a sportsbook. If they played VLT or Blackjack several times, the existence of sports betting will increase the amount of casino gambling income in other forms. On the other hand, it may be attractive for existing casino customers who played table games and VLT. In this case, adding a sportsbook reduces the casino gambling income of other forms. In the literature, this is called a replacement effect. By measuring the relationship between weekly sports books, table game revenue, and VLT revenue, you can clarify the importance of shifts in this environment.
Estimating the relationship between the two forms of sportsbook gambling and casino revenue deals with important weighing economics issues. It is clear that there is an unstable factor that affects both consumer betting for sporting events, table games in casinos and consumer betting for VLT. Without such an inseparable factor, the causal effects of consumers' betting to sporting events on table games and VLTs cannot be revealed. Understanding this relationship requires the latest method of causal inference.
Use the Instrumental VariableS (IV) approach to estimate the causal effect of legalization of sports betting on table games and VLT betting. According to the IV estimation, it is an exception in the form of an internal explanatory variable (in this case, a weekly sports betting handling volume), and is excluded in one or more variables that do not correlate with the inoperable factor that affects the table game and the VLT betting. Restriction is required. The analysis of the judgment factors of the sports betting handling highs can have two explanatory variables, NFL and NBA. From Table 4, the more NFL and NBA games held in one week, the greater the handling of sports betting for that week.
The number of NFL and NBA games played per week should be reasonably exogenous to unobserved factors that affect table game and VLT wagering in West Virginia casinos. West Virginia does not have NFL or NBA teams. Variation in the number of games played each week depends on the details of the league schedule, which is decided months before casino patrons decide to visit casinos and place wagers. Furthermore, individual decisions made by players at table games and VLTs should not depend on the number of NHL or NBA games scheduled for that week.
The IV regression approach takes the usual form. Estimates from a first-stage regression with weekly sportsbook holdings as the dependent variable and the second-stage instruments and other exogenous variables as explanatory variables are used to estimate an adjusted value of weekly sportsbook holdings that should be exogenous by construction to the factors in the error term of the second-stage equation. A second stage regression model with either weekly table revenue or weekly VLT revenue as the dependent variable and adjustments from the first stage along with other explanatory variables for the other two types of casino revenue.
Table 5 IV Regression Results - WEKLY and VLT Games and VLT Revenues WEKLY and VLT
Table 5 presents the results of the second stage of the IV estimation. Column (1) uses weekly table revenue as the dependent variable, and column (2) uses weekly VLT revenue. Both models also include casino fixed effects. The results suggest that there is no onset effect, as expected. The onset of sports betting would not have an immediate effect on table games or VLT revenue. The suspension of sports betting and mobile sports betting at Mardi Gras and Wheeling Island did not affect table games revenue, but increased VLT revenue by more than $600. 000 per week. The suspension of sports betting at these casinos resulted from a licensing dispute, not any specific activity in the betting market, so the suspension must be exogenous to unobservable factors affecting VLT wagering. The sportsbook and mobile app had been up and running for several weeks, and there was little in the way of press coverage to indicate that a dispute was occurring between Delaware North and Miomni Gaming. The suspension occurred suddenly and lasted for almost a year. The parameters of the suspension variable can be interpreted as difference-in-time estimates of the causal effect of the repeal of sports betting on VLT gambling. This variable u
Another parameter of interest is the adjusted value from the first-stage regression of weekly sportsbook volume. This parameter captures the lag of the causal effect of an increase in sports betting on other casino revenues. The parameters of the table gambling revenue model are not statistically different from zero. However, the parameters of the VLT revenue model are negative and statistically different from zero at the 5% significance level. The legalization of sports betting caused a decrease in VLT revenues in West Virginia. The magnitude of the parameters is also economically significant. For every $1 increase in sports betting, VLT gambling decreased by $3. 96. This gives an elasticity of VLT revenues to changes in sportsbook volume of 0. 18 on average across the distributions of sportsbook and VLT revenues. Note that this parameter estimate is consistent with the estimates of the positive effect of sportsbook interruptions in Mardi Gras and Wheeling Island on VLT revenues discussed above.
Table 7 in the Appendix includes the OLS results for Model IV with VLT revenue as the dependent variable for comparison with the IV results. OLS does not correct for correlations between sports betting handles and unobservable factors that affect table games and VLT revenues, and if such correlations exist, OLS will be biased and inconsistent. The OLS results show that there is no correlation between sports betting handles and these two variables. The parameter estimates for the sports betting handle variable in the OLS model are biased because they do not consider the effect of game availability on handles.
Table 5 also shows two standard IV diagnostic statistics for instrumental associations: the Kleibergen-Paap rk statistic and the Stock-Yogo first-stage F statistic. In this setting, identification requires that the ordering condition is met. It tests the extent to which the first-stage omitted variables (instruments) are correlated with the endogenous dependent variable, sports book grips. Such a large rk statistic (p-value for uncorrelated zero instruments is less than 0, 001) indicates that the instruments are effective. The first-stage F Stock-Yogo statistic of 15 also suggests that the instruments are not weak.
The magnitude of the estimated parameters for the sportsbook handle seems reasonable from an economic perspective. The magnitude of the effect represents the result of a gambler who previously spent an evening at a casino betting $40 on VLTs, now betting $5 on a game at a sportsbook instead of betting $20 on a VLT. Because VLT patrons put coins into machines, whereas bettors are more likely to bet on a game and then watch that game at a sportsbook, the share of patron spending on VLTs is likely to exceed the share of patron spending on sports betting.

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The opening of a sportsbook provides new betting opportunities for the casino. At one extreme, the opening of a sportsbook may only attract new customers who would not have gone to the casino to play VLTs or table games. This would obviously increase the casino's overall handle and keep it there. At the other extreme, the opening of a sportsbook may not attract new customers, but instead draw all betting action from existing customers who previously bet on VLTs and table games. This is called cannibalization in the literature. Actual results probably reflect a mix of new customers and cannibalization.

The impact of cannibalization in a casino depends on both the percentage of handle for the three gambling types and the retention rate (divided by the percentage of handle). If customers bet the same amount in a single casino visit regardless of which gambling type they are, and the retention rates for the three gambling types are the same, even complete cannibalization will not affect the casino's revenue. A new sportsbook simply moves handle and hold from one part of the casino to another. However, if customers bet different amounts when they change gambling types and retention rates differ for the three gambling types, casinos could benefit from new sportsbooks or reduce hold or retention in response to changes in customers' actual behavior.

Elim Poon - Journalist, Creative Writer

Last modified: 27.08.2024

types of legalized betting opportunities, such as sports betting. Legalizing iGaming on Casino Revenues in Five States," February Helped in part by the expansion of legal sports betting, the commercial casino sector logged its fifth consecutive year of gaming revenue growth in —surging. State Gambling Survey), sports betting revenues in the. Projection States would be expected to increase after iGaming is implemented. The.

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Legalized Sports Betting VLT Gambling and State Gambling Revenues Evidence from West Virginia

Legalized Sports Betting, VLT Gambling, and State Gambling Revenues: Evidence from West Virginia

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Introduction

West Virginia Gambling in Context

Empirical Analysis

Data

Determinants of Sports Betting Handle

Impact of Sports Betting on Other Casino Revenues

Conclusions

Notes

References

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