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Online Poker in North America: Empirical Evidence on its Complementary Effect on the Offline Gambling Market

Gaming Law Review & Economics, Forthcoming

Posted: 16 Mar 2012 Last revised: 7 Jul 2012

Kahlil S. Philander

Washington State University - College of Business and Economics

Ingo Fiedler

University of Hamburg - Institute of Commercial Law

Date Written: March 14, 2012

Abstract

The relationship between online gambling and offline gambling is still an unsettled question: Is online poker mainly a new way of distribution, substituting the offline gambling products? Or does it add to the portfolio of gambling products as a complement, increasing not only the total volume of revenues but also the revenues of each product? This paper is first to shed light on this issue, using a cross-section of online poker revenue and offline gambling revenue in all U.S. states and Canadian provinces. The main finding is that online poker and offline gambling are complementary goods, which suggests that the presence of online poker may increase demand of offline gambling overall. These findings suggest that the offline gambling industry should not generally be adverse to the expansion of Internet poker. This study also reveals the most accurate estimates to date of the online poker market size in 2010 in U.S. states and Canadian provinces/territories.

Keywords: online poker, casino, lottery, internet gaming, complementary goods

JEL Classification: L83

Suggested Citation

Philander, Kahlil S. and Fiedler, Ingo, Online Poker in North America: Empirical Evidence on its Complementary Effect on the Offline Gambling Market (March 14, 2012). Gaming Law Review & Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2021993 or http://dx.doi.org/10.2139/ssrn.2021993

Kahlil S. Philander (Contact Author)

Washington State University - College of Business and Economics ( email )

PO Box 644750
Pullman, 99164-4750
United States

Ingo Fiedler

University of Hamburg - Institute of Commercial Law ( email )

Max-Brauer-Allee 60
Hamburg, 22765
Germany
+4940428386539 (Phone)
+4940428386443 (Fax)

HOME PAGE: http://www.wiso.uni-hamburg.de/institute/irdw

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