Participation and Professional Team Sports
New Horizons in the Economics of Sport series
Edited by Wladimir Andreff
Chapter 7: Guessing Who Wins or Predicting the Exact Score: Does it Make Any Difference in Terms of the Demand for Football Pools?
Jaume García, Levi Pérez and Plácido Rodríguez INTRODUCTION The Spanish State Lotteries and Gaming (Loterías y Apuestas del Estado – LAE), a government organisation reporting to the Ministry of Economy and Finance via the State Secretary for Finance and Budgets, controls most legal sports betting in Spain. Sport betting consists of pools and other competitions for forecasting the results of sports events. Despite Spain’s enthusiasm for football, legal sports betting in relation to football is largely limited to people gambling on the outcome of professional football matches through football pools.1 As in the case of lotteries, the introduction of football pools in the gambling market could be explained in terms of the desire of governments to identify a new source of revenue. Furthermore, the exceptional importance of this gambling industry in Spain lies in the scope of its economic and social benefits; generally speaking, the funds obtained have been used to further promote sporting activities. Thus the LAE seeks to maximise revenue for the state or its nominated organisations (such as those promoting sports or the professional football teams). As revenues are a fixed proportion of sales, football pools managers should be motivated to maximise sales. To see if revenue-maximising game designs have been chosen, we need to look at the determinants of participation, which include the price, the size of the prize pool and the difficulty of the game (that is, the probability of winning the top prize, known as a jackpot). 114 M2464 -...
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