Cannibalization of Products with Random Prices: Did the Euromillions Lottery Kill the French 6/49 Lotto?

Abstract

The success of a lottery product is essentially linked to the design of the game, that is the structure of prizes offered to players, and the competitive universe of betting markets in which it is embedded. In this paper, we analyze the "death" of the French 6/49 lotto in October 2008 after 32 years of existence. By analyzing more than 700 draws of the French lotto, we show that the launching of the European lottery, called Euromillions, led to cannibalization of lotto sales. It helps to understand, four years later, the change of design proposed by La Francaise des Jeux.

Keywords: loterie, cannibalisation, effets de substitution

JEL Classification: D81, H71