The demand for Euromillions lottery tickets: An international comparison

Abstract

We analyze the demand of the Euromillions lottery tickets, a European lotto-like game launched in 2004 and played simultaneously in nine countries with the same rules and the same draws. Using the effective price methodology, we show that price elasticities are very different across countries. Especially, Spain and Portugal exhibit a low price elasticity and high mean sales, meaning a low sensitivity to jackpot increases. On the contrary, Ireland and the United Kingdom exhibit very high long-run elasticities and a large sensitivity to jackpot variations. The interpretations of these results are linked to lower GDP in the two former countries and, for Spain, to the large development of syndication play, and to the bookmaking activities and the highly competitive betting market in Ireland and the UK. Moreover, we show that Spanish and Portuguese players pay a much higher effective price than UK gamblers, meaning that in a certain sense the former subsidize the latter.Lottery, gambling, demand estimation, price elasticity.