John C. Navin

Has Riverboat Gambling Reduced State Lottery Revenue

Over the past decade, most states have introduced lotteries, and many now license casinos. To what extent does the presence of licensed casinos cannibalize revenues from state-sponsored lotteries? To what extent does pari-mutuel betting cannibalize revenues from state-sponsored lotteries? Based on pooled cross-section data for the period from 1989 to 1995, this research reveals significant cannibalization of lottery revenues by both casinos and pari-mutuel betting. Nevertheless, states, in general, gain by having both lotteries and casinos. In the case of pari-mutuel betting, however, the substitution is so severe that, at existing effective tax rates, lost lottery revenues outweigh states’ receipts from pari-mutuel betting.

The Optimal Size of Countercyclical Budget Stabilization Funds: A Case Study of Ohio

Ohio is one of several states that has instituted a Budget Stabilization Fund to serve as a tool to fight the impacts of economic fluctuations on state finances. The optimal size and rate of contribution to the fund are explored in this study. A widely accepted target of 5 percent of general fund revenue for the budget stabilization fund is found inadequate to provide any degree of normalization of state general fund revenue when Ohios recent fiscal experiences are examined. An optimal size of close to 13 percent emerges as a more likely target for Ohio along with an annual contribution rate approaching 4 percent of revenues in average non-contractionary years.

Do Riverboat Casinos Act as Competitors? A Look at the St. Louis Market

Using monthly data covering 1991 to 2003 for the five casinos located in the St. Louis, Missouri, metropolitan area, the authors examine how the return to gaming, as measured by the payout rate on electronic gaming devices, changes as new firms enter the market. The clear timing of the new entrants into the market and the availability of monthly data allow the authors to examine how competition has affected the payout rates. They find that new entrants into the market have clearly reduced the hold rate (increased the payout rate) on electronic gaming devices and increased the return to gamblers. Given that the tax revenue from riverboat gambling is based on adjusted gross revenue (total revenue less payout), the decrease in hold rates and, therefore, adjusted gross revenue has significant policy implications for local governments, the majority of which rely on a single casino for their local tax revenue.

The Market for Scholarly Communication

ABSTRACT This article provides an overview of the market for scholarly communication and how that market creates unusual positions for the producers, distributors, and consumers as compared to a traditional market for goods and services. Unlike traditional markets, the end users of scholarly communication are often not those responsible for the actual purchase and distribution of the products. The separation of end user and purchasers creates a number of interesting features that are explored in this article.

Broadband Developments in the United States Subsequent to the Federal Communications Commission's 2010 National Broadband Plan

The United States Federal Communications Commission delivered to Congress a national broadband plan in 2010. The purpose of this article is to analyze key economic arguments involving the development of the broadband plan addressing open network and competition issues, to make recommendations to the Commission in its formulation of federal policy as to positions that make the most economic sense, and to indicate recent economic and legal developments in broadband markets since publication of the broadband plan. One critical issue prior to the development of the broadband plan and subsequent to its publication is the competitiveness of the Internet Service Provider market. There is emerging evidence that, at least with respect to very high-speed broadband markets, a cable monopoly may be looming. The authors continue to predict with confidence that technological innovations are likely to make many opposing legal arguments obsolete in the near future.