Does International Simulcast Wagering Reduce Live Handles at Canadian Racetracks?

Transcription

1 Does International Simulcast Wagering Reduce Live Handles at Canadian Racetracks? Brad R. Humphreys University of Alberta Department of Economics Brian P. Soebbing University of Alberta Faculty of Physical Education and Recreation John Turvey University of Alberta Department of Economics May 26, 2009 Corresponding author. Address: 8-14 Tory, University of Alberta, Edmonton, Alberta, Canada T6G 2H4. Phone: ; Fax: ; Funding for this research provided by the Alberta Gaming Research Institute. We would like to thank the Canadian Parimutuel Agency, Janet Cookson of Standardbred Canada, and Equibase and the Jockey Club Information Services Incorporated for their data access. In addition, we would like to acknowledge Steven Koch of the Woodbine Entertainment Group who provided valuable information on simulcast markets and other useful comments Address: W1-16 Van Vliet, Faculty of Physical Education and Recreation, University of Alberta, Edmonton, Alberta, Canada T6G 2H9. Phone: ; Fax: ; Address: 8-14 Tory, University of Alberta, Edmonton, Alberta T6G 2H4 Canada. Phone: ; Fax: ; 1

2 Abstract 2

3 3 Introduction Horse racing and other forms of gambling provide additional revenue streams to governments. Interest and revenues from horse racing have been declining in recent years in the United States (Thalheimer & Ali, 1995a). More recently, annual reports from the Ontario Racing Commission, Alberta Horse Racing, and the Racing Division of British Columbia Gaming Regulation Enforcement Branch all display graphs bearing similar trends for Canada. As a result, the industry and governments introduced simulcast wagering which provides bettors with additional betting options at local tracks. Simulcast racing has been combined with live racing to be called the racetrack-racebook (Thalheimer & Ali, 1998). These simulcast bets go to the host tracks and increase the host tracks revenue. Potentially this poses a problem for tracks which host simulcast betting and live racing because live handle could be affected and the tracks themselves could lose revenue. The consequence, in terms of Canadian racetracks, is a decrease in Provincial government revenue which effects things such as community social programs, infrastructure, recreation programs, and education. Horse racing and gambling has been a fixture in Canada for many years (Wynne, 1994). Canada introduced simulcast in 1982 (Thalheimer & Ali, 1995a). One reason was that simulcast was a way to increase revenues. These revenues could then be redistributed back into society. However, research has yet to determine if this increase in revenue does indeed happen or if revenue decreases with the presence of simulcast wagering. The purpose of this paper is to explore the effect that North American simulcast has on live handle at Canadian racetracks from We examined the top 18 grossing racetracks in Canada and their aggregate simulcast wagering that these tracks bet on other horseracing tracks throughout North America. We incorporate a two-stage model to examine these effects. Our results indicate that the presence of simulcast has no effect on the live handle at these major Canadian tracks. As a result, these racetrack-racebooks do not see a decrease in the live handle due to offering simulcast, but there are also no complementarities with the presence of simulcast. Horse Racing and Simulcast Horse-race wagering is a special kind of economic good quite distinct from a vast number of other goods (Ali & Thalheimer, 1997, p. 529). Originally, a consumer must travel to the specific track in order to place a bet on a horse race. As a result, the consumer has a choice of two different goods. The first is the choice to visit the horse track. Once at the race track, the consumer has the choice on whether or not to wager on a horse race (Ali & Thalheimer, 1997). Betting on horse races has evolved so now consumers do not actually have to go to the track in which the race is held. In the early 1970s, off-track betting became an option for consumers. Off-track betting are remote locations that allows consumer to place bets on local horse race tracks (Thalheimer & Ali, 1995a). In 1982, simulcast betting began which allowed consumers to bet on live racing that was occurring in a certain territorial restriction. For example, in 1983, the state of New Jersey began simulcast betting which allowed patrons to watch and bet on live races in the state of

4 4 New Jersey (Thalheimer & Ali, 1995a). Since 1982, simulcast has evolved to include more races than just from a geographical region.... Simulcast means the live transmission of video and audio signals conveying a horse race held either inside or outside this state to a licensed race meeting in this state. A simulcast from one racetrack in this state to another racetrack in this state shall be called an intertrack simulcast. A simulcast from a racetrack outside this state to a racetrack inside this state shall be called an interstate simulcast. (Excerpt from Horse Racing Law of State of Michigan Act 279 of 1995, Section 18) As a result, horse tracks as well as off-track betting facilities now have choices to make in terms of the menu they offer consumers. What once was just a choice of races within a certain geographical has turned into what Thalheimer and Ali (1998) term the racetrackracebook. The racetrack-racebook is a racetrack location which offers its partons the opportunity to wager on a variety of parimutuel products including live (on-track) horse racing and a wide variety of races simulcast to that racetrack both in-state and out-of-state racetracks (Thalheimer & Ali, 1998, p. i). These simulcast options also now include out of country. For example, a consumer at the Woodbine Racetrack in Toronto can not only bet on a race in Ontario (provincial), but also bet on a race elsewhere in Canada, United States, and also countries such as Western Europe, New Zealand, and Hong Kong. Given all the options now that tracks and off-track betting facilities have to choose from, it is important for race tracks to select the correct or optimal portfolio of races in order to maximize its revenue. For tracks within Canada, revenues from horse betting are redistributed throughout society. For example, 70 million in the 2006 fiscal year was circulated throughout the community through pari-mutuel wagering in the province of Alberta (Horse Racing Alberta, 2007). 1 As a result, selecting the optimal mix of live and simulcast racing (in terms of numbers of simulcast races but also locations) has a direct effect on how much revenue governments in Canada receive from pari-mutual wagering. Therefore, it is important to determine two things, the first is the presence of simulcast wagering on the live handle. The second is the determinants of horse racing and how that affect the live handle at these horse tracks that offer the mix of both simulcast and live racing. Determinants of Horse Race Betting Handle With the increased availability of simulcast wagering for consumers, empirical research on race track handle focused on both attendance at tracks and the determinants of betting on horse racing. Thalheimer and Ali (1992; 1995a; 1995b; 1998) and Ali and Thalheimer (1997; 2002) contribute the majority of the recent research that examines the determinants and demand of pari-mutuel horse race wagering. Their research investigates both a handle at a single track (Ali & Thalheimer, 2002; Thalheimer & Ali, 1998; 1991) and specific geographical regions (Ali & Thalheimer, 1997; Thalheimer & Ali, 1995a; 1995b) as well as documenting the evolution of simulcast betting. 1 The figure is in Canadian Dollars (CAD).

5 5 Thalheimer and Ali (1992) first examined how the introduction of telephone betting affected both live handle and total handle at Louisville Downs racetrack in Louisville, Kentucky, from 1970 through Controlling for the items such as the presence of Churchill Downs, the quality of the races, total income and the number of racing days, it was found that both live handle and total handle decreased with the introduction of telephone betting at the race track. Thalheimer and Ali (1995a) investigated the impact that intrastate wagering has daily handle for six race tracks in Kentucky. Recall that intrastate simulcast was one of the early forms of simulcast. They hypothesized that daily handle is a function of four things: price, characteristics of the product, substitution of other gambling products, and consumer preferences. This study covered the period ( ) when intrastate was introduced into Kentucky. They found that not only did the handles increase at all tracks, but also handles continued to increase as the distance between intrastate sites decreased. This presents a different result than Thalheimer and Ali s (1992) research on the effect of telephone betting. A couple of reasons for this difference of results. The first is in comparison to telephone betting, consumer still has to attend the horse track. As a result, the consumer would bet more if attending a track rather than betting on one specific race over the phone. The second is even though both studies are located in the same geographical regions (Kentucky), the power of including six tracks compared to examining only one track provides a better overall policy examination. A complementary study to Thalheimer and Ali (1995a) further examined the relationship. However, instead of using daily handle, Thalheimer and Ali (1995b) used annual handle data from 1960 through 1987 among tracks in the Kentucky and Ohio region. Among the many results that examine the relationship between various entertainment and gambling options with both handle and attendance at the race tracks, it was determined that the increase in the number of racing days and higher quality of races effected the natural log of the per capita handle. Ali and Thalheimer (1997) again examined the wagering of parimutuel horse racing. This study differed in two ways. The first is instead of examining Kentucky racetracks, Ali and Thalheimer (1997) examined New Jersey race tracks from 1960 through The time period is significant because it is the time period around where intrastate simulcast was introduced in the state of New Jersey. The second is the authors includes transportation costs. Recall that consumers have to travel to a location in order actual bet on horse racing. Results from the study show that reducing the cost for people to visit and consume the product will increase wagering. The increase in wagering will occur at both thoroughbred and standardbred races. They comment that reducing cost can occur by altering the product mix. However, it is unclear whether people prefer simulcast of live races. A more extensive study of demand for wagering was undertaken by Ali and Thalheimer (2002) in examining the full simulcast portfolio of a racetrack-racebook. Using similar frameworks from earlier research, Ali and Thalheimer (2002) examined daily wages at Garden State Park in Results found that the takeout rate was the most significant determinant, followed by the number of races, field size, and average purse. Unlike previous studies (Ali & Thalheimer, 1997) that could not determine an appropriate product mix, Ali and Thalheimer (2002) were able to estimate an ideal product mix for Garden State Park. In summary, the previous studies present a comprehensive picture regarding the demand

6 6 and some determinants of wagering. These studies encompass both single track case studies and larger jurisdictional studies. In addition, these studies examine both daily and annual handle at these horse tracks. One limitation of the research is these studies have been constrained by not examining multiple tracks over multiple jurisdictions over time. This type of analysis has many benefits. First is that it is not constrained by geographical region. This analysis can examine the determinants for wagering across multiple time zones and multiple jurisdictions. Second, when examining just one jurisdiction most consumers are betting on the same race cards. When examining multiple jurisdictions, many time bettors in one area are betting on races in which other bettors may not be able to consume. Third, it allows for more variation among racetracks. A geographical jurisdiction such as a state or province only has a certain amount of horse tracks. By eliminating provincial or state boundaries, one can examine different tracks (both as betting from and the tracks that they bet to). This variation will also eliminate any homogeneity among the jurisdictional population. In addition, the results examining multiple jurisdictions may be different than the determinants of wagering we see among one geographical jurisdiction. Research Questions The purpose of this paper is to extend the stream of research of Thalheimer and Ali by examining the relationship between live and simulcast handle at 18 Canadian tracks. Our primary question is how does the presence of simulcast wagering effect the live handle at each of these 18 major tracks? The secondary question is how do items such as field size, average purse, and the number of races effect the live handle. In order to answer these questions, we use data from 18 Canadian tracks from 1999 through Data We analyze data from Canadian horse tracks that offered simulcast wagering over the period 1999 through We obtained track-specific handle data from the yearly statistical reports published by the Canadian Pari-mutuel Association. From these reports, we compiled a list of all tracks which offered simulcast racing and from that list, selected the 18 largest tracks from that list. These 18 tracks had a average gross simulcast handle during the sample period of at least 80,000 CAD. 2 They also represent the major Canadian provinces and also race for most of the year (therefore we exclude seasonal race tracks). Table 1 presents the 18 tracks with the city and province they are located in. From the annual reports, we are able to track the flow of money from these 18 locations to all of the tracks in which patrons can bet via simulcast. These tracks are located all over the world. We drop all tracks that are not located in North America. Finally, we sum all of the simulcast betting track characteristics in order to create one track year observation for each of the 18 tracks. Table 2 presents the summary statistics over the sample time period. The average live handle for the 18 tracks was 24,700,000 CAD. The mean average field size was 8.02 with an average of racing days. The city population that these 18 simulcast 2 The dollar amount is calculated in 2002 real dollars

7 7 Table 1: Canadian Horse Racing Tracks Track Name City Province Assiniboia Downs Winnipeg Manitoba Georgian Downs Barrie Ontario Stampede Calgary Alberta Mohawk Raceway Milton Ontario Frasier Downs Surrey British Columbia Flamboro Downs Hamilton Ontario Northlands Edmonton Alberta Grand River Raceway Woolrich Ontario Fort Erie Racetrack Fort Erie Ontario Western Fair Raceway London Ontario Hippodrome d Montreal Montreal Quebec Rideau Carlton Ottawa Ontario Hippodrome d Quebec Quebec City Quebec Marquis Downs Saskatoon Saskatchewan Sudbury Downs Greater Sudbury Ontario Woodbine Toronto Ontario Hastings Raceway Vancouver British Columbia Windsor Raceway Windsor Ontario tracks are located in range from less than 18,000 to just under 5.5 million. The average simulcast handle per track was 83,700,000 in 2006 CAD. Empirical Model The basic empirical model used to analyze the volume of betting, or the handle in gaming jargon, at Canadian horse racing tracks is a reduced form model of the determination of annual handle at tracks H it = α i + β 1 P it + β 2 F it + β 3 RD it + β 4 CIT Y P OP it + β 5 CIT Y INC it + β 6 T t + ρ i HO ijt + ɛ it. (1) In equation (1), i indexes Canadian tracks, j indexes sumulcast race tracks (i j), t indexes years, α i is a vector of track specific intercepts, and ɛ is the equation error term that is assumed to be identically and independently distributed with mean zero and variance σ ɛi. This variance may vary by track. The independent variables in equation (1) are: H total handle at track i in year t (dependent variable). P average purse size at track i in year t. F average field size at track i in year t.

8 8 Table 2: Summary Statistics Variable Mean Median St.Dev. Minimum Maximum Live Handle 24,700,000 9,491,040 53,500, , ,000,000 Average Purse 12,011 8,235 10,551 2,295 50,568 Average Field Size Live Racing Days City Population 973, ,753 1,310,396 17,797 5,423,955 City Income 26,600,000 15,600,000 36,400, , ,000,000 Simulcast Handle 83,700,000 33,400, ,000, , ,000,000 Simulcast Broadcast Days Observations 144 RD total number of racing days at track i in year t. CITYPOP population of the city that track i is located in for year t. CITYINC total income in the city of track i in 2007 real Canadian dollars (CAD) for year t. T time trend variable to capture systematic yearly changes across tracks. HO simulcast handle at track i wagered at track j in year t. Purse size and field size reflect the quality of races at tracks. Larger purses identify higher quality races which should be more attractive to bettors. Larger fields indicate more betting options which should also attract more bettors and betting. Racing days is a proxy for betting opportunities available to bettors. City characteristics capture characteristics of the markets that each track operates in. The time trend variable captures systematic changes in horse race gambling that affect all tracks over time. The time trend can capture demographic changes, changes in the opportunity cost of attending horse racing, and systematic changes in the relative appeal of betting on horse races such as the overall decrease in wagering as cited by Thalheimer and Ali (1995a). The primary parameter of interest here is ρ, the parameter on the simulcast handle at each track. We are interested in the relationship between live handle and simulcast handle at Canadian tracks. The sign of this parameter cannot be determined a priori. The availability of simulcast betting options could attract more bettors to the track, but it could also lead existing bettors to bet less on live races and more on remote races. Live betting and simulcast betting could be either substitutes or complements. If the estimated parameter on simulcast handle is positive, then the presence of simulcast betting options increases live handle at the Canadian tracks; if the estimated parameter on simulcast handle is negative, then the presence of simulcast betting decreases live handle at the Canadian tracks, suggesting that some form of cannibalization of live handle takes place.

9 9 Typically HO ijt and the equation error term (ɛ) are assumed to be uncorrelated in equation (1). However, this assumption would be heroic in our setting; the equation error term in the reduced form empirical model for live handle at a track and the amount bet on simulcast racing at that track are likely to be correlated because the betting comes from the same pool of bettors. This correlation, if uncorrected, leads to inconsistent estimates on the parameters when estimating equation using OLS. One way to handle this problem is using instrumental variables (Greene, 2000). To identify an instrument, one must first find one or more variables that affect the simulcast handle at track i but are uncorrelated with the equation error term in equation (1), ɛ it. These instruments are used to estimate an equation for the endogenous variable, HO ijt. The fitted values of this first stage equation, which are by construction uncorrelated with ɛ it are used as an explanatory variable in equation (1). We collected data on the characteristics of all of the tracks in North America that were available on simulcast broadcasts at the Canadian tracks, identified by subscript j in equation (1), as well as the total amount bet on races at these tracks. Simulcast betting flowed from the 18 Canadian tracks to 138 different tracks located in 10 different countries. For the purposes of this paper, we examined just the US and Canadian tracks which account for 91 of the 138 tracks with races simulcast at Canadian tracks. Again, the first stage equation includes explanatory variables (instruments) that effect the simulcast handle at track i, HO ijt and are uncorrelated with the equation error term ɛ it in equation (1) (Newhouse & McClellan, 1998). The first stage regression model is HO ijt = β 0 + β 1 P ijt + β 2 RD ijt + β 3 T Z ijt + ɛ jt (2) where H is the total handle at track j in year t, P is the average purse size for the track, RD is the number of racing days at track j in year t, and T Z is an indicator for the time zone for the city that track j is located in. Since the tracks where the simulcast racing takes place are located remotely, in many cases hundreds or thousands of miles from the i tracks, these factors should be uncorrelated with the unobservable factors that affect live handle at the Canadian tracks, making these variables viable instruments. We aggregate the variables over all the remote tracks, replacing HO ijt with the total simulcast handle at each Canadian track J HO s,it = HO ijt j=1 P ijt with the average purse size at all remote tracks available at each of the Canadian tracks, P it, the number of racing days RD ijt From this first stage regression, we calculate HO ˆ ijt based on OLS estimates of equation (2), replace HO ijt in Equation 1 with HO ˆ ijt and estimate Equation 1 using OLS. Table 3 presents the results for two alternative models. The first two columns of results on Table 3 treat the simulcast handle as exogenous; the second two columns of results use an IV estimator, Two Stage Least Squares, to control for correlation between the simulcast handle and the equation error term as described above. All four models contain track specific fixed effects terms to correct for unobservable track characteristics that affect live handle and simulcast handle. All four models also control for

10 10 Table 3: OLS-FE and IV Regression Results OLS-FE IV Variable Model 1 Model 2 Model 3 Model 4 Total Simulcast Handle <0.001 < Average Field Size 2,395,240 2,233,885 2,460,733 2,397, Average Purse Size Racing Days 130, , , ,738 <0.001 <0.001 <0.001 <0.001 City Population City Income Time Trend -815, , , ,297 <0.001 <0.001 <0.001 <0.001 R heteroscedasticity using White s correction. We do not report these track specific effects, but they are available on request. The reason for the two different model specifications is uncertainty about the appropriateness of the average purse variable. As can clearly be seen from models 3 and 4, the significance of the estimated simulcast variable in the IV estimates is sensitive to the inclusion of the average purse size variable in the model. The reason for this sensitivity is probably correlation between the average purse size and the equation error term. Purses are typically paid out of track revenues, the effect of which are captured by the equation error term. However, we lack a good instrument for the average purse size variable, so we check for robustness by omitting this variable from the model. The results on Table 3 are generally consistent with those found in the literature. The average field size and number of racing days are positive and significant, indicating that increases in betting options, as proxied by average field size, and opportunities to bet, as reflected by number of racing days, are both positive and significant. The market characteristic variables are both significant even when controlling for unobservable track specific effects. Tracks located in larger cities have lower handles, probably reflecting the wider array of entertainment and gambling options available in larger cities. Horse race betting is a normal good, as indicated by the positive and significant parameters on city income in all four models. The negative time trend variable captures the steady decline in live handle at Canadian horse racing tracks over the 8 year sample period. The average purse size variable is not significant in either the fixed effects OLS model or the IV model. Again, average purse size may reflect the quality of the races run at the track, under the assumption that larger purses will attract higher quality horses to enter the races. However, purses are paid in part out of track revenues, so this variable may be correlated

11 11 with the equation error term. Since we lack any good instruments for this variable in our current data, we estimate the OLS and IV models with this variable included and excluded. The parameter of interest is the estimated parameter on the simulcast handle variable, which captures the relationship between remote betting and live betting at tracks. We believe that this variable is correlated with unobservable factors that affect live betting, indicating that the fixed effects OLS results suffer from endogeneity problems. The estimated parameter on the simulcast handle variable is only significant in IV model four, the one that omits average purse size from the model. Taken together, the results on Table 3 contain weak support for the idea that simulcast handle does not reduce live handle, but at worst has no effect on live handle and at best the presence of simulcast betting opportunities stimulated live betting at tracks. Note that these results are all conditional on the declining secular trend in horse race betting over the sample period, so the positive and significant sign on the parameter on simulcast betting on Model four means that simulcast betting led to smaller declines in betting handle at Canadian race tracks. Identification The reliability of estimates from Instrumental Variables estimators depends critically on the identification of the endogenous variable. This identification in turn depends on the strength of the instruments - the ability of the variables excluded from the second stage to explain observed variation in the endogenous variable and to be uncorrelated with the unobservable equation error term in the second stage. Only if both criteria hold can we be reasonable sure that the relationship between simulcast handle and live handle is causal. If the instruments are weak, then the correction for correlation between simulcast handle and the equation error term in the second stage can have an adverse effect on all the parameter estimates in the IV model. Recall that we use five instruments: the average purse size at the remote tracks, the number of races run at the remote tracks, the average field size at the remote tracks, and the number of races run at remote Canadian and US tracks. We calculate these values for each of the 18 Canadian race tracks in our sample. Since these variables reflect activity at the remote tracks, they should be uncorrelated with unobservable factors at the track where the live betting takes place. since they are located remotely. We performed a number of diagnostic tests of the validity of our instruments. Table 4 summarizes these tests for our preferred specification, Model four on Table 3. The F-statistic on the first stage regression was 18, much larger than the usual rule of thumb value of 10. The Sargan test is based on the overidentifying restrictions implied by our five instruments. See Baum, et al (2007) for details on these tests. The results of this test indicate that the instruments are uncorrelated with the residuals from the second stage regression. The Anderson-Rubin test is based on canonical correlations between the explanatory variables in the second stage and the instruments. Under the null hypothesis of this test, the model is weakly identified because the instruments and the second stage regressors are uncorrelated. The results of this test indicate that our model is identified. The Kleibergen-Paap statistics are based on the rank of the matrix of the instruments. The results of these two tests indicate that our model is identified. Finally, Stock and Yogo (2002) proposed two tests for weak instruments, both of which have a null that the instruments are weak in the sense that the lack of correlation with the endogenous variable induces bias in the IV estiamtes. The

12 12 Table 4: Summary of Identification Diagnostic Tests Identification Diagnostic Test Statistic P-Value Sargan Test of Overidentifying Restrictions H o : Corr(INST, ɛ it ) = 0 Anderson-Rubin Wald test H o : Model weakly identified Kleibergen-Paap rk LM statistic H o : Underidentified model Kleibergen-Paap rk Wald statistic H o : Model underidentified Kleibergen-Paap rk Wald F statistic 3.46 H o : Model weakly identified Stock-Yogo Critical Values 5.15 (MRB) 9.38 (IV-S) maximial relative bias (MRB) test uses the finite sample distribution of the IV estimator; the maximal IV size test (IV-S) is based on the rejection rates of the Anderson-Rubin Wald test when instruments are weak. Our model passes both tests, based on the critical values of the test statistics. The instrument diagnostics all indicate that our instruments are strong enough to identify the model, and that the IV results are reliable. Conclusions Our paper attempts to examine the relationship between live handles and the presence of simulcast. We examined the top 18 grossing tracks across Canada over an eight year time period. In order to examine this relationship, we used instrumental variables. Our results indicated that controlling for other factors such as field size, average purse, city characteristics, and racing days that the presence of simulcast has no effect on the live handles of these selected tracks. When removing average purse size, due to concerns about endogeneity, does have a small but significant positive effect on live handles. The implications for the research reflect towards the horse racing industry, in particular the executives in charge of creating the racecard for each day. The results here conclude that the presence of simulcast has minimal effect on the live handle. Therefore, executives should focus their attention on generating a better mix to increase attendance (and possibly live handle) at the home horse track. However, racing executives need to be careful as in not to cannibalize the live handle but rather to use simulcast as a way to help entice attendees to bet on live events. Also, horse racing executives want to focus on the races that they offer. The results on these parameters show that an increase in field size increases the live handle. That could be due to more uncertainty regarding who will win the race and thus create more interest in the race from a bettors perspective. Increasing the number of racing days will also increase the live handle at horse tracks. The above research is not without its limitations. Unlike Thalheimer and Ali s recent

13 13 research, we do not know the individual takeout rate of the 18 Canadian tracks. However, if the takeout rate is consistent over time for each of the tracks, then the track fixed effects parameters will pick it up. Future research in this area is important from a government policy perspective. For example, instead of examining 18 tracks individually, future research could aggregate to a provincial level to examine how foreign simulcast effect the total provincial handle. This would examine the flows to other provinces as well as to the United States and other foreign countries. Due to the nature of how gambling revenues are distributed throughout Canadian provinces, this is an important next step in this area of research.

14 14 References Ali, M. M. & Thalheimer, R. (1997). Transportation costs and product demand: wagering on parimutuel horse racing. Applied Economics, 29, Ali, M. M. & Thalheimer, R. (2002). Product choice for a firm selling related products: A pari-mutuel application. Applied Economics, 34, Baum, C. F., M. E. Schaffer, & S. Stillman. (2007). ivreg2: Stata module for extended instrumental variables/2sls, GMM and AC/HAC, LIML, and k-class regression. Boston College Department of Economics, Statistical Software Components S Downloadable from Horse Racing Alberta (2007) Horse Racing Alberta: 2007 annual report. Retrieved May 24, 2009, from Greene, W. H. (2000). Econometric Analysis: Fourth Edition. Upper Saddle, NJ: Prentice- Hall. Newhouse, J. P. & McClellan, M. (1998). Econometrics in outcomes research: The use of instrumental variables. Annual Review of Public Health, 19(1), Stock, James H. & Yogo, Motohiro (2002). Testing for Weak Instruments in Linear IV Regression. NBER Working Paper No. T0284. Available at SSRN: Thalheimer, R. & Ali, M. M. (1992). Demand for pari-mutuel horse race wagering with special reference to telephone betting. Applied Economics, 24, Thalheimer, R. & Ali, M. M. (1995a). Intertrack wagering and the demand for parimutuel horse racing. Journal of Economics and Business, 47, Thalheimer, R. & Ali, M. M. (1995b). The demand for parimutuel horse race wagering and attendance. Management Science, 41(1), Thalheimer, R. & Ali, M. M. (1998). An economic analysis of a parimutuel racetrackracebook. University of Louisville, unpublished manuscript. Wynne, H. J., Smith, G. J., & Volberg, R. A. (1994). Gambling and problem gambling in Alberta: Final report. Retrieved May 7, 2009, from