Gambling spending and its concentration on problem gamblers

Abstract

While most gamblers spend moderate amounts of money, a few spend much more. This leads to spending being concentrated among a small number of players. Building on a body of literature that shows disproportionate spending by problem gamblers, we hypothesize that problem gambling causes such concentration. We investigate this hypothesis empirically by using GINI coefficients derived from survey datasets of gamblers from three different jurisdictions: France, Québec, and Germany.We find strong positive relationships between the GINI coefficient and (1) the share of revenue derived from problem gamblers, and (2) excess spending of problem gamblers. We interpret these results as a link between the effect of problem gambling—excessive and disproportionate spending—and concentration of gambling demand. Since the problem gambling status of players is often unknown, policy makers and gambling operators could use the GINI coefficient as an additional indicator to monitor social risk in gambling markets.