Do Sportsbooks Cannibalize Lottery Play? Evidence from Non-Jackpot Lottery Sales in Indiana

Session Title

Gambling Markets: Policy & Behavioral Response

Presentation Type

Paper Presentation

Start Date

28-5-2026 12:00 AM

Abstract

The rapid expansion of legal sports betting in the United States has raised concerns among policymakers and lottery administrators that new betting opportunities may cannibalize state lottery revenues. This study examines whether legal sports betting substitutes for or complements lottery participation, using Indiana as a case study with a clearly staged rollout of retail and mobile wagering. Using monthly Indiana Lottery data, the analysis focuses on non-jackpot lottery products, scratch tickets and fixed-payout draw games, rather than total lottery sales. Excluding jackpot-based games allows the study to isolate changes in baseline lottery participation and avoid volatility driven by rollover dynamics. A time-series policy intervention framework is employed that accounts for long-run trends, seasonality, and COVID-related disruptions. The results show no evidence of lottery cannibalization. Instead, the introduction of legal sports betting is associated with a statistically and economically meaningful increase in core lottery sales. This relationship is driven by the launch of retail sportsbooks, while the subsequent expansion to mobile sports betting does not generate additional gains. The findings suggest that the mode of access to gambling products plays a critical role in shaping cross-product participation.

Author Bios

Dr. Rodney Paul is Department Chair, Designer, and Director of the Sport Analytics Program at Syracuse University. He holds a Ph.D. in applied economics and has published extensively on sports gambling markets, lottery demand, and wagering behavior. His sports research also focuses on outcome uncertainty, attendance and viewership modeling. His research focuses on the economic and policy implications of regulated gambling, with particular emphasis on sports betting and state lotteries.

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May 28th, 12:00 AM

Do Sportsbooks Cannibalize Lottery Play? Evidence from Non-Jackpot Lottery Sales in Indiana

The rapid expansion of legal sports betting in the United States has raised concerns among policymakers and lottery administrators that new betting opportunities may cannibalize state lottery revenues. This study examines whether legal sports betting substitutes for or complements lottery participation, using Indiana as a case study with a clearly staged rollout of retail and mobile wagering. Using monthly Indiana Lottery data, the analysis focuses on non-jackpot lottery products, scratch tickets and fixed-payout draw games, rather than total lottery sales. Excluding jackpot-based games allows the study to isolate changes in baseline lottery participation and avoid volatility driven by rollover dynamics. A time-series policy intervention framework is employed that accounts for long-run trends, seasonality, and COVID-related disruptions. The results show no evidence of lottery cannibalization. Instead, the introduction of legal sports betting is associated with a statistically and economically meaningful increase in core lottery sales. This relationship is driven by the launch of retail sportsbooks, while the subsequent expansion to mobile sports betting does not generate additional gains. The findings suggest that the mode of access to gambling products plays a critical role in shaping cross-product participation.