Entry Fees as a Responsible Gambling Tool: An Economic Analysis

Abstract

Entry fees, or levies, have received increased interest as a responsible gambling tool and have been implemented or proposed in an increasing number of jurisdictions. Using comparative statics analyses, this study uses neoclassical economic theory to understand the distributional consequences of entry fees on players with and without gambling related problems. Overall, it appears that there is relatively weak theoretical support for entry fees’ use as responsible gambling tool, as they primarily distort the demand of more price sensitive recreational gamblers. This creates a potentially large dead weight loss in the economy, and likely increases the share of revenue from players with a gambling disorder.