Gambling on Lotto Numbers: Testing for Substitutability or Complementarity Using Semi-weekly Turnover Data.

The impact on the demand for a gambling product of the introduction of a competing product is a topical issue in Britain, Ireland and elsewhere. We consider empirically the demand for Lotto itself and for fixed-odds betting on the Lotto draw. The evidence suggests that these products are complements. Problems are posed by the need to rely on turnover data instead of price and quantity data in testing for substitutability or complementarity and by the semi-weekly nature of Lotto draws, which raises the possibility of a "seasonal" unit root in the turnover time series. Copyright 1999 by Blackwell Publishing Ltd