The Economics of Gambling: Checkpoint 1

Quick checkpoint - five questions on the house edge, psychology, lotteries, casinos and horse racing.

Question 1 of 5 What makes the expected value of casino bets negative for players?

The house edge Luck Taxes only Skill

Roulette's edge is about 2.7%.

Question 2 of 5 What is the gambler's fallacy?

Believing a win is due after losses Always winning Betting small Quitting early

Each spin is independent.

Question 3 of 5 Why are lotteries called a regressive tax?

Poorer people spend a larger share of income on them The rich pay more They're free They're illegal

Kerala's lottery began in 1967.

Question 4 of 5 Which state has floating casinos?

Goa Bihar Punjab Assam

They are on the Mandovi river.

Question 5 of 5 Why is horse race betting legal?

The Supreme Court held it a game of skill It's run by the RBI It's untaxed It's online

The 1996 judgment settled this.

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