Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/195290 
Year of Publication: 
2017
Citation: 
[Journal:] SERIEs - Journal of the Spanish Economic Association [ISSN:] 1869-4195 [Volume:] 8 [Issue:] 2 [Publisher:] Springer [Place:] Heidelberg [Year:] 2017 [Pages:] 145-175
Publisher: 
Springer, Heidelberg
Abstract: 
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.
Subjects: 
Taxation
Online betting market
Sport betting
Bookmaker
JEL: 
C72
D42
L83
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

Files in This Item:
File
Size
672.69 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.