The Luck of the Texan: An Empirical Analysis of Texas Lottery Games
Journal of Gambling Business and Economics, Forthcoming
24 Pages Posted: 20 Jun 2007 Last revised: 3 Aug 2009
This paper provides an empirical analysis of the relationships between three popular lottery games in the state of Texas: Lotto Texas, Texas Two Step, and the multi-state Mega Millions game. The analysis suggests complementarity between the Lotto Texas and Mega Millions; habitual players tend to play relatively safer games; the 2006 Lotto Texas rule change decreased revenue substantially; and that only at low effective ticket prices do players prefer high stakes/low odds games. We simulate the effective prices at which consumers prefer one game over another and find that Mega Millions and Lotto Texas are strictly preferred over Texas Two Step, and that Lotto Texas is preferred to Mega Millions at all feasible price levels. Only at unfeasibly low effective ticket prices would Mega Millions be preferred to Lotto Texas.
Keywords: games of chance, preference, gambling
JEL Classification: D12, L83
Suggested Citation: Suggested Citation