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- Title
Does what happen in Vegas stay in Vegas? Football gambling and stock market activity.
- Authors
Cox, Justin; Schwartz, Adam; Van Ness, Robert
- Abstract
We examine whether lagged football betting payoffs result in changes in retail investing in lottery-like stocks. We show that lagged, low betting imbalances are associated with increases in retail stock participation, particularly for lottery-like stocks. This finding implies support for the "break-even" hypothesis that following negative sentiment and losses from football gambling, investors use lottery-like stocks to offset losses or break-even. This result holds for lottery-like stocks defined based on high idiosyncratic volatility and skewness as well as stocks that trade in over-the-counter (OTC) markets. Finally, we address whether the reverse relation exists, finding that only OTC market activity leads to increases in football betting activity but not football betting imbalances. Overall, our paper contributes to the literature investigating the relation between gambling sentiment and stock market activity.
- Subjects
LAS Vegas (Nev.); STOCK exchanges; FOOTBALL; GAMBLING; OVER-the-counter markets
- Publication
Journal of Economics & Finance, 2020, Vol 44, Issue 4, p724
- ISSN
1055-0925
- Publication type
Article
- DOI
10.1007/s12197-020-09513-9