The Effect of Inequality and Prosperity on the European Market for Gambling Machines: A Socioeconomic Panel Analysis

Abstract

This study examines the potential influence of prosperity and inequality on gambling participation in Europe. We combined data from the Eurostat database, the Global Wealth Report, and the European Casino Association and estimated fixed effects panel regression models. We show that income inequality has a negative effect on the number of gambling machines that flattens for high values, while wealth inequality has a linear negative effect. Moreover, an increase in the disposable income of the lower quintiles leads to significant increases in the number of gambling machines per country. These findings are important for future researchers who relate any kind of economic variable to gambling as well as for policy makers, as our results suggest that the lower-income groups should be given the most attention with regards to gambling regulation.