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

See all articles by Craig A. Depken

Craig A. Depken

University of North Carolina at Charlotte - The Belk College of Business Administration - Department of Economics

Paul R. Dorasil

University of Florida

Abstract

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

Depken, Craig A. and Dorasil, Paul R., The Luck of the Texan: An Empirical Analysis of Texas Lottery Games. Journal of Gambling Business and Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=994383

Craig A. Depken (Contact Author)

University of North Carolina at Charlotte - The Belk College of Business Administration - Department of Economics ( email )

Charlotte, NC 28223
United States

Paul R. Dorasil

University of Florida ( email )

Gainesville, FL 32611-7140
United States

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