Gambling Market and Individual Patterns of Gambling in Germany

Abstract

In this paper individual patterns of gambling in Germany are estimated for the first time. The probit technique is used to test the influence of a set of individual characteristics on the probability of participating in each of the various legal games. A sample size of 1,586 adults collected for the pool of German lotteries provides a reliable set of data. All disaggregated estimations of participation are statistically significant at least at the 5 percent level. The basic findings suggest that gambling is a widespread normal (superior) consumption good because gambling participation tends to rise with income. Moreover, no demand anomaly can be found to justify assessing gambling as a social demerit. Only the participation in gaming machines is higher for younger, unemployed and less educated adults. While a moral evaluation of gambling is beyond the scope of this paper, the legislator's preference for a highly taxed state monopoly in gambling markets is to be rejected, at least for Germany. Additional statistical findings suggest distinct consumer perceptions of the characteristics of the various games and may be used for market segmentation. The paper starts with a descriptive introduction to the German gambling market.