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Technological Advancements in State Lottery Operations June 6, 2014 Presented by: Chris Robertson...
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Transcript of Technological Advancements in State Lottery Operations June 6, 2014 Presented by: Chris Robertson...
Technological Advancements in State Lottery Operations
June 6, 2014
Presented by:Chris Robertson
Director of Business Development
NCLGS
NO CANNIBALIZATION
• According to studies, no evidence to suggest that addition of new, lottery products, such as VLTs, in bars and clubs have a negative effect on Casino revenue.
• Research by Christian Marfels, professor of Economics at Dalhousie University in Nova Scotia, concludes “Simply stated the notion of substitution effect and gaming do not mix. There is simply no empirical evidence whatsoever to support such a claim. Rather, the introduction of VLT gaming to a jurisdiction with other forms of commercial gaming, including casino gaming, leads to more variety within the gaming industry.”
• An effect that Marfels called the “Supplementation Effect.”
NO CANNIBALIZATION
South Dakota1990 – 1996; VLT revenue $46M/year to $175M/year Casino Revenue $14M/year to $45M/year
Manitoba1990 – 1996; VLT revenue $0M/year to $185M/yearCasino revenue $5M/year to $101M/year
Nova Scotia1992 – 1997; VLT revenue $17M/year to $106M/year Casino revenue $0M/year to $71M/year
1990 1991 1992 1993 1994 1995 19960
50
100
150
200
South Dakota ($ millions)
VLTs Casinos
1990 1991 1992 1993 1994 1995 19960
50
100
150
200
Manitoba ($ millions)
VLTs Casinos
1992 1993 1994 1995 1996 19970
20406080
100120
Nova Scotia ($ millions)
VLTs Casinos
NO CANNIBALIZATION
West Virginia2000 – 2007; VLT revenue $0M/year to $397M/year Casino revenue $283M/year to $955M/year
Iowa2000 – 2007; MVM revenue introduced, then removed growing from $0M/year to $121M/yearCasino revenue $899M/year to $1044M/yearNote: Casino revenue the year the MVMs were removed had smaller growth rate than during years MVMs were introduced
British Columbia2003 – 2011; VLT revenue $0M/year to $170M/yearCasino revenue $374M/year to $960M/year
2000 2001 2002 2003 2004 2005 2006 20070
200400600800
10001200
West Virginia ($ millions)
VLTs Casinos
2003 2004 2005 2006 20070
200400600800
10001200
Iowa ($ millions)
MVMs Casinos
2003 2004 2005 2006 2007 2008 2009 2010 20110
200400600800
10001200
British Columbia ($ millions)
Community Gaming Casinos
NO CANNIBALIZATION
“….the extension of the substitution effect of casino gaming to other forms of commercial gaming in general, and to VLT gaming in particular, in the sense of cannibalization of gaming revenues, is misguided. If anything, the one dollar spent on VLT gaming is simply one dollar more spent on gaming. Why? Because VLT and casino activities are two vastly different forms of commercial gaming.
As a consequence, the substitution effect can be laid to rest, and it can be safely replaced by the supplementation effect.”
Christian Marfels, PH.D, Casino Gaming and VLT Gaming: Substitution Effect or Supplementation Effect?, GAMING LAW REVIEW, Volume 1, Number 3, 1997