This article is available in: PDF

Market Cannibalization Within and Between Gambling Industries: A Systematic Review

Virve Marionneau, Janne Nikkinen


In economics, cannibalization refers to a process in which a new product or service partly or completely substitutes for those in existing markets. This systematic review analyses the existing evidence on cannibalization within gambling markets to determine whether such substitution takes place between different types of gambling. The analysis shows that new gambling products substitute to a certain extent for existing gambling products. The sector in which the evidence is most convincing is the casino industry, which cannibalizes lotteries and pari-mutuel racing. There is also evidence that casinos substitute for other casinos and for non-casino electronic gaming machines. Lotteries substitute for casinos, other lotteries, sports betting, and pari-mutuel or racing industries. In other cases, the evidence is less conclusive and sometimes non-existent, or industry relationships are more complicated. This review also found that even in cases where substitution does occur, it is incomplete, and thus the introduction of new products tends to expand the overall gambling market. We discuss these market dynamics and identify gaps in the available research. 



En économie, on entend par cannibalisation un processus par lequel un nouveau produit ou service se substitue partiellement ou complètement à des produits ou services existants. Cet examen systématique analyse les données dont on dispose sur la cannibalisation dans les marchés du jeu pour déterminer si une telle substitution a lieu entre différents types de jeux de hasard. L’analyse montre que les nouveaux produits de jeux de hasard remplacent, dans une certaine mesure, certains produits de jeu existants. La preuve la plus convaincante est celle portant sur le secteur du casino qui cannibalise les loteries et les courses de pari mutuel. Il est également prouvé que les casinos accaparent légèrement le marché d’autres casinos et d’appareils de jeu hors casino. Les loteries s’approprient une part de marché des casinos, d’autres loteries, de paris sportifs et mutuels ou des secteurs de la course. Dans d’autres cas, les preuves sont moins concluantes, voire inexistantes, ou les relations entre les divers secteurs sont plus compliquées. Cet examen a également révélé que, même dans les cas où il y a un accaparement du marché, il n’est pas total et, par conséquent, le lancement de nouveaux produits tend plutôt à élargir le marché global du jeu. Nous abordons ces dynamiques de marché et cernons les lacunes dans la recherche disponible.

Full Text:



Abbott, M., Binde, P., Clark, L., Hodgins, D., Korn, D., Pereira, A., . . . Williams, R. (2015). Conceptual framework of harmful gambling: An international collaboration revised September 2015. Guelph, ON: Gambling Research Exchange Ontario.

Ali, M., & Thalheimer, R. (1997). Transportation costs and product demand: Wagering on parimutuel horse racing. Applied Economics, 29, 529–542.

American Gaming Association. (2014). State of the states: The AGA Survey of Casino Entertainment. Retrieved from

Barnes, S. (2013). The real costs of casinos: Health equity impact assessment. Toronto, ON: Wellesley Institute.

Barrow, C., Borges, D., & Meister, A. (2016). An empirical framework for assessing market saturation in the U.S. casino industry. Gaming Law Review and Economics, 20, 397-411.

Basham, P., & Luik, J. (2011). The social benefits of gambling. Economic Affairs, 31, 9–13.

Bedford, K., Alvarez-Macotela, O., Casey, D., Kurban Jobin, M., & Williams, T. (2016). The bingo project: Rethinking gambling regulation. University of Kent, UK: Economic & Social Research Council.

Bol, T., Lancee, B., & Steijn, S. (2014). Income inequality and gambling: A panel study in the United States (1980–1997). Sociological Spectrum, 34, 61–75.

Brown, R., & Rork, J. (2005). Copycat gaming: A spatial analysis of state lottery structure. Regional Science and Urban Economics 35, 795–807.

Browne, M., Langham, E., Rawat, V., Greer, N., Li, E., Rose, J., . . . Best. T. (2016). Assessing gambling-related harm in Victoria: A public health perspective. Melbourne, Australia: Victorian Responsible Gambling Foundation.

Collins, P. (2003). Gambling and the public interest. Westport, CT: Praeger.

Costes, J., Eroukmanoff, V., Richard, J., & Tovar, M. (2015). Les jeux d’argent et de hasard en France en 2014 [Games of money and chance in France in 2014]. Paris, France: Les notes de l’Observatoire des jeux.

Cummings, W., Walker, D., & Cotti, C. (2017). The effect of casino proximity on lottery sales: Evidence from Maryland. Contemporary Economic Policy, 35, 684–699.

Davis, R., Filer, J., & Moak, D. (1992). The lottery as an alternative source of state revenue. Atlantic Economic Journal, 20, 1–10.

Dowling N., Rodda, S., Lubman, D., & Jackson, A. (2014). The impacts of problem gambling on concerned significant others accessing web-based counselling. Addictive Behaviour, 39, 1253–1257.

Eadington, W., Wells R., & Gossi, D. (2010). Estimating the impact of California tribal gaming on demand for casino gaming in Nevada. UNLV Gaming Research & Review Journal, 4, 33–45.

Economopoulos, A., & Stolle, W. (2012). Do Pennsylvania casinos cannibalize PA state lottery revenues? Pennsylvania Economic Review, 19, 1–14.

Elliott, D., & Navin, J. (2002). Has riverboat gambling reduced state lottery revenue? Public Finance Review, 30, 235–247.

Farrell, L., & Forrest, D. (2008). Measuring displacement effects across gaming products: A study of Australian gambling markets. Applied Economics, 40, 53–62.

Fink, S., & Rork, J. (2003). The importance of self-selection in casino cannibalization of state lotteries. Economics Bulletin, 8, 1–8.

Fong, D., Fong, H., & Li, S. (2011). The social cost of gambling in Macao: Before and after the liberalisation of the gaming industry. International Gambling Studies, 11, 43–56.

Forrest, D. (1999). The past and future of the British football pools. Journal of Gambling Studies, 15, 161–176.

Forrest D., Gulley, D., & Simmons, R. (2004). Substitution between games in the UK National Lottery. Applied Economics 36, 645–651.

Forrest, D., Gulley, D., & Simmons, R. (2010). The relationship between betting and lottery play. Economic Inquiry, 48, 26–38.

Forrest, D., & McHale, I. (2007). The relationship between a national and a multistate lotto game. The Journal of Gambling Business and Economics, 1, 207–216.

Forrest, D., & Perez, L. (2011). Football pools and lotteries: Substitute roads to riches? Applied Economics Letters, 18, 1253–1257.

Gallagher, R. (2014). An examination of cannibalization effects within the riverboat gaming industry: The case of Illinois-area casinos. Growth and Change, 45, 41–59.

Garrett, T., & Marsh, T. (2002). The revenue impacts of cross-border lottery shopping in the presence of spatial autocorrelation. Regional Science and Urban Economics, 32, 501–519.

Geisler, K., & Nichols, M. (2016). Riverboat casino gambling impact on employment and income in host and surrounding counties. The Annals of Regional Science, 56, 101–123.

Gordon, T. (2010). Nation, corporation or family? Tribal casino employment and the transformation of tribes (Occasional Paper Series 5). Las Vegas: University of Nevada, Las Vegas Center for Gaming Research.

Govoni, R. (2000). Gambling behaviour and the distribution of alcohol consumption model (Doctoral thesis, University of Windsor, Windsor, ON). :Retrieved from

Grinols, E. (2004). Gambling in America: Costs and benefits. New York, NY: Cambridge University Press.

Grote, K., & Matheson, V. (2006). Duelling jackpots: Are competing lotto games complements or substitutes? Atlantic Economic Journal, 34, 85–100.

Grote, K., & Matheson, V. (2013). The economics of lotteries: A survey of the literature. In L. V. Williams & D. S. Siegel (Eds.), The Oxford handbook of the economics of gambling (pp. 670–691). New York, NY: Oxford University Press.

Grun, L., & McKeigue, P. (2000). Prevalence of excessive gambling before and after introduction of a national lottery in the United Kingdom: Another example of the single distribution theory. Addiction, 95, 959–966.

Gulley, O., & Scott, F. (1989). Lottery effects on pari-mutuel tax revenues. National Tax Journal, 42, 89–93.

Gulley, O., & Scott, F. (1993). The demand for wagering on state-operated lotto games. National Tax Journal, 46, 13–22.

Hansen, M., & Rossow, I. (2008). Adolescent gambling and problem gambling: Does the total consumption model apply? Journal of Gambling Studies, 24, 135–149.

Hansen, M., & Rossow, I. (2012). Does a reduction in the overall amount of gambling imply a reduction at all levels of gambling? Addiction Research & Theory, 20, 145–152.

Hunsaker, J. (2001). The impact of riverboat casinos on the demand for gambling at casino resorts: A theoretical and empirical investigation. Managerial and Decision Economics, 22(1–3), 97–111.

Kaplan, H. (1990). The effects of state lotteries on the pari-mutuel industry. Journal of Gambling Studies, 6, 331–344.

Kendall, D. (2011). Sociology in our times (8th ed.). Belmont, CA: Wadsworth.

LaPlante, D., & Shaffer, H. (2007). Understanding the influence of gambling opportunities: Expanding exposure models to include adaptation. American Journal of Orthopsychiatry, 77, 616–623.

Levitzky, I., Assane, D., & Robinson, W. (2000). Determinants of gaming revenue: Extent of changing attitudes in the gaming industry. Applied Economics Letters, 7, 155–158.

Lin, C-T., & Lai, C-H. (2006). Substitute effects between lotto and big lotto in Taiwan. Applied Economics Letters, 13, 655–658.

Lund, I. (2008). The population mean and the proportion of frequent gamblers: Is the theory of total consumption valid for gambling? Journal of Gambling Studies, 24, 247–256.

Marfels, C. (1997). Casino gaming and VLT gaming: Substitution effect or supplementation effect? Gaming Law Review, 1, 333–340

McGowan, R. (2009). The competition for gaming revenue: Pennsylvania v. New Jersey. Gaming Law Review and Economics, 13, 145–155.

Miers, D. (1996). The implementation and effects of Great Britain’s national lottery. Journal of Gambling Studies 12, 343–373.

Mikesell, J., & Zorn, C. (1987). State lottery sales: Separating the influence of markets and game structure. Growth and Change, 18, 10–19.

Mobilla, P. (1992). Trends in gambling: The pari-mutuel racing industry and effect of state lotteries: A new market definition. Journal of Cultural Economics, 16, 51–62.

Nichols, M. (1998) Deregulation and cross-border substitution in Iowa’s riverboat gambling industry. Journal of Gambling Studies 14, 151–172.

Orford, J. (2012). Gambling in Britain: The application of restraint erosion theory. Addiction, 107, 2082–2086.

Paton, D., & Vaughan Williams, L. (2013). Do new gambling products displace old? Evidence from a postcode analysis. Regional Studies, 47, 963–973.

Philander, K. (2011). The effect of online gaming on commercial casino revenue. UNLV Gambling Research & Review Journal, 15, 23–34.

Philander, K., Abarbanel, B., & Repetti, T. (2015). Consumer spending in the gaming industry: Evidence of complementary demand in casino and online venues. International Gambling Studies, 15, 256–272.

Philander, K., & Bernhard, B. (2012). Informing the public debate: Cannibalisation: The effect of new casinos on gaming and non-gaming businesses. Las Vegas, NV: International Gaming Institute.

Philander, K., & Fiedler, I. (2012). Online poker in North America: Empirical evidence on its complementary effect on the offline gambling market. Gaming Law Review & Economics, 16(7–8), 415–423.

Prybylski, M., Felsenstein, D., Freeman, D., & Littlepage, L. (1998). Does gambling complement the tourist industry? Some empirical evidence of import substitution and demand displacement. Tourism Economics, 4, 213–231.

Purfield, C., & Waldron, P. (1999). Gambling on lotto numbers: Testing for substitutability or complementarity using semi-weekly turnover data. Oxford Bulletin on Economics and Statistics, 61, 527–544.

Ray, M. (2001). How much on that doggie at the window? An analysis of the decline in greyhound racing handle. Review of Regional Studies, 31, 165–176.

Roger, P., & Chabi, S. (2009). La cannibalisation des produits à prix aléatoires: L'Euromillions a-t-il tué le loto français? [Cannibalization of products of random cost: Has the Euromillions killed the French lottery?]. Strasbourg, France: Laboratoire de recherche en gestion & economie.

Room, R., Turner, N., & Ialomiteanu, A. (1999). Community effects of the opening of the Niagara casino. Addiction, 94, 1449–1466.

Schüll, N. (2012). Addiction by design: Machine gambling in Las Vegas. Princeton, NJ: Princeton University Press.

Schüll, N. (2013). Balancing acts: Gambling-machine addiction and the double bind of therapeutics. In E. Raikhel & W. Garriott (Eds.), Addiction trajectories (pp. 61–87), Durham, NC: Duke University Press.

Shaffer, H. (2005). From disabling to enabling the public interest: Natural transitions from gambling exposure to adaptation and self-regulation. Addiction, 100, 1227–1230.

Shonkwiler, J. (1993). Assessing the impact of Atlantic City casinos on Nevada gaming revenues. Atlantic Economic Journal, 21, 50–61.

Siegel, D., & Anders, G. (2001). The impact of Indian casinos on state lotteries: A case study of Arizona. Public Finance Review, 29, 139–148.

Simmons, S., & Sharp, R. (1987). State lotteries' effects on thoroughbred horse racing. Journal of Policy Analysis and Management, 6, 446–448.

Srinivasan, S., Ramakrishnan, S., & Grasman, S. (2005). Identifying the effects of cannibalization on product portfolio. Marketing Intelligence and Planning, 23, 359–371.

Steinnes, D. (1998). Have Native American casinos diminished other gambling in Minnesota? An economic assessment based on accessibility. Journal of Regional Analysis and Planning, 28, 18–32.

Stover, M. (1990). Contiguous state lotteries: Substitutes or complements? Journal of Policy, Analysis and Management, 9, 565–568.

Swiss Institute of Comparative Law. (2006). Study of gambling services in the internal market of the European Union. Lausanne, Switzerland: European Commission.

Thalheimer, R. (1998). Parimutuel wagering and video gaming: A racetrack portfolio. Applied Economics, 30, 531–543.

Thalheimer, R. (2008). Government restrictions and the demand for casino and parimutuel wagering. Applied Economics, 40, 773–791.

Thalheimer, R. (2012). The demand for slot machine and pari-mutuel horse race wagering at a racetrack-casino. Applied Economics, 44, 1177–1191.

Thalheimer, R., & Ali, M. (1992). Demand for parimutuel horse race wagering with specific reference to telephone betting. Applied Economics, 24, 137–142.

Thalheimer, R., & Ali, M. (1995a). The demand for parimutuel horse racing and attendance. Management Science 41, 129–143.

Thalheimer, R., & Ali, M. (1995b). Exotic betting opportunities, pricing policies and the demand for parimutuel horse race wagering. Applied Economics, 27, 689–703.

Thalheimer, R., & Ali, M. (1995c). Intertrack wagering and the demand for parimutuel horse racing. Journal of Economics and Business, 47, 369–383.

Thalheimer, R., & Ali, M. (2003). The demand for casino gaming. Applied Economics, 35, 907–918.

Thalheimer, R., & Ali, M. (2008). Table games, slot machines, and casino revenue. Applied Economics, 40, 2395–2404.

Tosun, M., & Skidmore, M. (2004). Interstate competition and state lottery revenues. National Tax Journal, 57, 163–178.

Trucy, F. (2011). Les multiples aspects d'un phénomène social majeur [The multiple aspects of a major social phenomenon]. Pouvoirs, 139, 65–76.

Vasche, J. (1990). The net revenue effect of California’s lottery. Journal of Policy Analysis and Management, 9, 561–564

Walker, D., & Jackson, J. (2008). Do U.S. gambling industries cannibalize each other? Public Finance Review, 36, 308–333.

Walker, D., & Nesbit, T. (2014). Casino revenue sensitivity to competing casinos: A spatial analysis of Missouri. Growth and Change, 45, 21–40

Walker, D., & Sobel, R. (2016). Social and economic impacts of gambling. Current Addiction Reports, 3, 292–298.

Wardle, H., Moody, A., Griffiths, M., Orford, J., & Volberg, R. (2011). Defining the online gambler and patterns of behaviour integration: Evidence from the British Gambling Prevalence Survey 2010. International Gambling Studies, 11, 339–356.

Williams, R., Rehm, J., & Stevens, R. (2011). The social and economic impacts of gambling. Final Report to the Canadian Interprovincial Consortium for Gambling Research. Retrieved from

Young, M., Tyler, W., Lamb, D., & Stevens, M. (2008). Expenditure on electronic gaming machines in the Northern Territory: A venues-based analysis. Report prepared for the Community Benefit Committee. Darwin, Australia: Charles Darwin University, School for Social and Policy Research.

Zheng, V., & Wan, P-s. (2014). Gambling dynamism. The Macao miracle. Berlin, Germany: Springer.


Copyright © 2017 | Centre for Addiction and Mental Health
Editor-in-chief: Sherry Stewart, Ph.D.
Managing Editor: Vivien Rekkas, Ph.D. (contact)