Since the first modern state-sponsored lottery was instituted in New Hampshire in 1964, lotteries have proliferated to 42 states and the District of Colombia. With little exception, research has shown that these lotteries are a highly regressive form of taxation. However, this body of research does not take into account a theoretical finding that the manner in which collected funds are earmarked impacts participation patterns. The goal of this dissertation is to test this finding empirically. In the first analysis, I use sales data from the Tennessee Education Lottery and scholarship data from the TEL Scholarship program to test this theory directly. I find that instant game sales are increasing in the number of scholarships awarded in a given county and that the implicit tax incidence is less regressive than in certain other states. Theory does not hold for Powerball sales. This may be due to a misconception that buying into a multi-state game does not directly subsidize programs in Tennessee. In the second analysis, I focus on the Texas Lottery, which began as a revenue stream for the state’s General Fund, but eventually became a dedicated revenue stream for K-12 education. I exploit this change to test for a structural break in the demand for two lottery games. Then, I extend an existing theory of lottery demand to take this structural break into account. I find that there is a structural break at the time the earmark is implemented, and that the lottery is less regressive after the earmark.

The present investigation aims at modeling the sales response to advertising and, in the process, sheds some light on the sales-advertising relationship subject, which has been at the center of a decades-long controversy due to its inherent complexities. We studied three Colorado Lottery games, Lotto, Powerball, and Scratch, over a four-year period of operation. To synthesize a model that appropriately described the sales-advertising behavior of each one of these games, we addressed three fundamental questions driving the modeling process itself: 1. Is there a relationship between sales and advertising? 2. If such relationship exists, is there an advertising "carryover effect" on sales? And, 3. What is the shape of the sales-advertising relationship? We put forward two general-response models (Current Effects and Koyck's) in combination with eight functional forms (one linear and seven nonlinear forms) to address the above questions and test the respective hypotheses. Employing the available time series data corresponding to game sales, game advertising expenditures, state population, state unemployment rate, and jackpot (for the relevant games), we performed the respective regression analyses. We, then, evaluated the posited relationships and selected the best predictive model for each game, when statistical evidence supported a significant sales-advertising association. Using this final model, we addressed the three research questions at the core of this study. The results of this investigation suggested the existence of a significant positive and nonlinear (concave-downwards) Scratch sales-advertising relationship. No sales-advertising association was found for the Lotto or Powerball games. The data analyzed did not seem to support either the advertising "carryover effect" on sales on any of the games studied. From the theoretical point of view, these findings extend prior empirical research that has generally assumed, for simplification purposes, a linear sales-advertising relationship with its corresponding consequences. From the practical perspective, this study highlights advertising’s contribution to sales, which can help debunk mistaken beliefs frequently stigmatizing advertising as a resource-spending function and quell the long-established skepticism about its financial accountability. / text

The thesis explores models of gambling regulations in the European Union, focused on the Czech Republic, the Slovak Republic and the Great Britain. These models are further examined and analyzed according to their impact on the non-profit sector. The aim was to propose optimal gambling regulation including stimulation of funding sources for charities and non-profit organizations in the Czech Republic. Results of the analysis prove that there is a possibility of contributions to good causes, as well as the state lottery and the charity lottery.