Searching for Gambles: Gambling Sentiment and Stock Market Outcomes

Yao Chen, Alok Kumar, Chendi Zhang

Research output: Contribution to journalArticlepeer-review

2 Scopus citations


Using Internet search volume for lottery to capture gambling sentiment shifts, we show that when the overall gambling sentiment is strong, investor demand for lottery stocks increases, these stocks earn positive short-run abnormal returns, managers are more likely to split stocks to cater to the increased demand for low-priced lottery stocks, and initial public offerings (IPOs) earn higher first day returns. Further, the sentiment-return relation is stronger among low institutional ownership firms, headquartered in regions where gambling is more acceptable and local bias is stronger. These results suggest that gambling sentiment has a spillover effect on the stock market.

Original languageEnglish (US)
Pages (from-to)2010-2038
Number of pages29
JournalJournal of Financial and Quantitative Analysis
Issue number6
StatePublished - Sep 2021

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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