Submission Type

Presentation

Submission Title

Determinants of gambling in the UK: An economic analysis of recent changes in the UK Gambling Market

Session Title

Session 3-1-D: Gambling Market Case Studies

Location

Caesars Palace, Las Vegas, Nevada

Start Date

30-5-2019 9:00 AM

End Date

30-5-2019 10:25 AM

Disciplines

Econometrics

Abstract

Abstract

This paper provides a comprehensive economic "demand" analysis of the UK gambling markets using large scale microdata for the entire UK. We use the English Health Survey (EHS) and the UK Living Costs and Food Survey (LCFS) to investigate determinants of gambling behaviour, gambling expenditure, and health. The former survey contains detailed information on gambling behaviour and health. The latter on gambling expenditure and income. We combine data from the two sources and estimate multinomial choice models and continuous demand models to explain how gambling and problem gambling behaviour are related to income, social class, age, and the price and availability of gambling in the market.

The analysis is conducted over a period where the UK market has gone through significant change. These changes have included a change to (and increased prevalence of) gambling advertising, increases in mobile gambling penetration, and changes to gambling taxation. There have also been significant changes from a structural perspective, with consolidation through M&A increasing overall market concentration. Innovation continues to widen the breadth of products, with increases in the range of betting markets available and increasingly immersive gaming content.

Implications

The paper aims to provide new findings on the drivers of gambling and of problem gambling behaviour, all based on publicly available data. It provides insight as to: How do various gambling activities interact? How important are price and other factors in determining gambling behaviour and problem gambling behaviour? How has behaviour evolved over time?

Keywords

econometrics, uk, gambling, demand estimation, gambling behaviour, gambling responsiveness

Author Bio

Lars Nesheim is a Reader in Economics at UCL and Co-Director of the Centre for Microdata Methods and Practice (cemmap). After obtaining his PhD from the University of Chicago in 2001, he worked for 2 years at the Institute for Fiscal Studies before joining the Department of Economics at UCL in 2003. He teaches industrial organization, econometrics and urban economics. His research interests focus on structural econometrics, computational economics, industrial organization, urban economics, economic dynamics and hedonic models.

Adam Rivers is an economic consultant based in London, specialising in microeconomics and microeconometrics. He holds over eight years’ experience in the betting and gaming sector and is a regular speaker at international gambling conferences. He has worked with land-based and online betting operators, lottery providers and trade bodies across competition economics, regulatory economics and broader applications of microeconomics to commercial strategy. Adam holds an MSc in Industrial Economics from the University of East Anglia.

Seamus McGowan is an economic consultant based in London. Seamus is a regular speaker at international gambling conferences, covering issues including the economics of gambling taxation and regulation. He has worked with a number of gambling operators and trade bodies advising on fiscal affairs, regulatory engagement as well as commercial strategy. Seamus holds a BSc in Economics from the University of Birmingham.

James Bentley is an economic consultant based in London. He has five years’ experience working in regulated industries, particularly the betting and gaming sector, where he has advised land-based, online and lottery operators. He specialises in applying microeconomics and econometrics to regulatory and commercial strategy issues. He holds an MSc in Economics & Finance and a BSc in Mathematics, both from the University of Bath.

Funding Sources

None

Competing Interests

All authors regularly work as consultants for a range of operators in the UK gambling sector.

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May 30th, 9:00 AM May 30th, 10:25 AM

Determinants of gambling in the UK: An economic analysis of recent changes in the UK Gambling Market

Caesars Palace, Las Vegas, Nevada

Abstract

This paper provides a comprehensive economic "demand" analysis of the UK gambling markets using large scale microdata for the entire UK. We use the English Health Survey (EHS) and the UK Living Costs and Food Survey (LCFS) to investigate determinants of gambling behaviour, gambling expenditure, and health. The former survey contains detailed information on gambling behaviour and health. The latter on gambling expenditure and income. We combine data from the two sources and estimate multinomial choice models and continuous demand models to explain how gambling and problem gambling behaviour are related to income, social class, age, and the price and availability of gambling in the market.

The analysis is conducted over a period where the UK market has gone through significant change. These changes have included a change to (and increased prevalence of) gambling advertising, increases in mobile gambling penetration, and changes to gambling taxation. There have also been significant changes from a structural perspective, with consolidation through M&A increasing overall market concentration. Innovation continues to widen the breadth of products, with increases in the range of betting markets available and increasingly immersive gaming content.

Implications

The paper aims to provide new findings on the drivers of gambling and of problem gambling behaviour, all based on publicly available data. It provides insight as to: How do various gambling activities interact? How important are price and other factors in determining gambling behaviour and problem gambling behaviour? How has behaviour evolved over time?