State lotteries are an important source of state revenue in the 45 states that operate them. Following the repeal of the Professional and Amateur Sports Protection Act (PASPA), 38 states and Washington, DC legalized sports betting. Mixed evidence exists on the relationship between spending on different forms of gambling, raising concerns about potential fiscal impacts. Using monthly lottery sales data from 18 states and a staggered difference-in-differences design exploiting legalization, we find no economically or statistically significant effect of sports betting on state lottery revenues. These results are robust across specifications and sub-samples.
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Nedved et al. (2026) studied this question.
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