EVALUATING THE EFFECTS OF GAME DESIGN ON LOTTO SALES: A CASE STUDY FROM SPAIN

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Published: Jan 2, 2013
DOI: https://doi.org/10.5750/jgbe.v4i2.552
Keywords:
lotto game design ticket sales effective price risk preferences

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David Forrest
Centre for the Study of Gambling University of Salford
Levi Perez
Universidad de Oviedo, Departamento de Economía
Rose Baker

Abstract

In February, 2005 the Spanish National Lottery Agency (LAE) made several modifications to the design of one of its lotto games. The entry fee was not changed but the familiar 6/49 format was replaced by 5/54 + 1/10. This considerably lengthened the odds against winning a share of the grand prize. However, extra lower tiers of prizes were added and a guaranteed jackpot of €5m introduced. The change in rules provides an unusual opportunity to study the effect on sales of features of lotto games other than entry fee and pay-back rate. The changes in design appear in this case to have allowed the operator to achieve higher and more stable sales. Reasons for this are explored through estimation of demand models. Results indicate that gains to the operator had been achieved by better satisfying players’ preference for skewness in the distribution of returns.

Article Details

Issue
Vol. 4 No. 2 (2010)
Section
Articles

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