On the effect of taxation in the online sports betting market

  1. Juan Vidal-Puga
Revista:
SERIEs : Journal of the Spanish Economic Association

ISSN: 1869-4195

Ano de publicación: 2017

Volume: 8

Número: 2

Páxinas: 145-175

Tipo: Artigo

DOI: 10.1007/S13209-017-0156-Y DIALNET GOOGLE SCHOLAR lock_openAcceso aberto editor

Outras publicacións en: SERIEs : Journal of the Spanish Economic Association

Resumo

We analyze the effect of taxation in the online sport betting market. A relevant characteristic of this market is its negligible marginal cost on bet volume. Taxation can be on gross profit (Gross Profit Tax) or on volume (General Betting Duty). We model the two most popular online sport betting bets: fixed-odds and spread, as compared with another traditional sport betting: parimutuel. We characterize the odds and the bookmaker’s payoff in (strong) subgame perfect equilibrium for each of the three types of bets under both taxation schemes. The results show that taxation on gross profit maximizes the utilitarian social welfare. Moreover, the three types of bets are equivalent when the market is symmetric.

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Fonte de datos: Dialnet