The effects of limiting access to gambling: Insights from the closures of Electronic Gambling Machines

In industries where consumption generates negative externalities and internalities, governments can attempt to curb excess demand by restricting supply. However, this strategy may simply shift consumption to substitutes with similar negative consequences. We explore this issue in the Finnish gambling market using two quasi-experiments and a difference-in-differences framework to assess how reducing the supply of land-based gambling affects gambling volume. Our findings suggest that, overall, there is limited substitution between different types of gambling. However, among high-volume gamblers, we observe some substitution, though even for these individuals, total gambling volume declines.