Household gambling expenditures and the Irish recession

Abstract: This article examines the determinants of household gambling expenditures in Ireland and the effects of the recession on these expenditures using a large micro data-set, the Irish Household Budget Survey (HBS). Two gambling expenditures are examined, bookmaker tote betting and spending on the national lottery. Households with an older and a less educated head of household participate in and spend more on both forms of gambling while the presence of children in the households tends to reduce participation and spending in gambling. There is also evidence to suggest that households with an unemployed head of household have a higher likelihood of participation in gambling. The recession has affected the two forms of gambling in different ways. Lottery expenditures appear resilient to the effects of the recession. This is demonstrated in the estimated expenditure elasticities in particular. Bookmaker/tote expenditures have changed from a necessity to a luxury good, while lottery expenditures have increased in their necessity status. This can be explained by the fact that playing the lottery requires less time, knowledge and risk and has potentially greater benefits attached to it in comparison to bookmaker/tote betting. During a recession these factors become much more prevalent.