Gambling Outlets Location in Urban Areas: A Case Study of Madrid

Cities are certainly a key factor in the location of gambling facilities. This paper aims to map the location of gambling outlets in urban areas and to examine potential links between neighborhoods socioeconomic and demographic characteristics and gambling supply, taking into account spatial dependencies of neighboring areas. This correlation is of interest because neighborhood characteristics may attract sellers, and because the presence of gambling sellers may cause changes in neighborhood demographics. Using detailed official data from the city of Madrid for the year 2017, three spatial econometric approaches are considered: spatial autoregressive (SAR) model, spatial error model (SEM) and spatial lag of X (explicative variables) model (SLX). Empirical analysis finds a strong correlation between neighborhoods characteristics and co-location of gambling outlets, highlighting a specific geographic patterning of distribution within more disadvantaged urban areas. This may have interesting implications for gambling stakeholders and for local governments when it comes to the introduction and/or increase of gambling availability.