Do people gamble more in good times? Evidence from 27 European countries

ABSTRACT

We provide evidence of a positive relationship between the intensity of gambling and economic growth in 27 European countries for 2005–2013. Our proxy for gambling is represented by government revenues from taxes on lotteries, betting and gambling. This variable is linked to GDP growth in a panel regression framework and pooled OLS. However, when we split our sample to account for the heterogeneity among European countries, we found that the positive ‘gambling – GDP growth’ relationship is driven extensively by the Central and Eastern European countries. It appears that people in these countries tend to gamble more when the economy is expanding.

KEYWORDS:

• Gambling
• lottery
• GDP growth
• European countries

JEL CLASSIFICATION:

• L83
• O10
• O40

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ For a comprehensive survey on this topic, refer to Ariyabuddhiphongs (2011).

² All data are obtained from the Eurostat database. We excluded Cyprus and Malta as we decided to split our sample into EU-15 and CEE countries.

³ Before 2012, producers that organized gambling or lotteries had to pay a levy based on their turnover. The levy had to be used for purposes beneficial to society and directly to beneficiaries of their own choosing instead of the state budget. Thus, only levies paid to municipalities have been included into the amount reported as taxes on lotteries, gambling and betting.

⁴ Gambling activities in Romania are subject to an annual licensing fee, an annual authorization fee (a percentage of the amount collected by gambling organizers from players), a corporate tax and an income tax on players’ gains (Baciu and Albu 2015). The fees are not recorded as taxes according to Eurostat.

⁵ Detailed results are available upon request.

Additional information

Funding

This work was supported by the Slovak Grant Agency for Science (VEGA project number 1/0402/15).