We are all going to regret Kalshi and Polymarket.

Gambling should be like cigarettes: Legal but inaccessible.

The biggest winner in this year’s Super Bowl was the betting market Kalshi. The biggest losers were everyone who used Kalshi to place bets.

It’s being reported that over $1 billion was wagered on Kalshi this Sunday. That included over $100 million in bets on what Bad Bunny’s first song would be. This is bad, and I think we all know its bad, and everyone ought to say so goddammit. To a first approximation, $500,000,000 was lost on Kalshi this Sunday. Much of that surely came from people who would have been better off using that money for other things. $500,000,000 was also won on Kalshi this Sunday. For every winner, there is an equal and opposite loser (minus Kalshi’s fee).

…Oh and also, Kalshi turned around and paid some of its fees to Giannis Antetokounmpo, who is now promoting the gambling site to all of his fans. (Giannis is bad now. We are done with Giannis.)

Kalshi wants to create a world where “The long-term vision is to financialize everything and create a tradable asset out of any difference in opinion.” I wish we still lived in a society where someone in a position of authority would ask the obvious follow-up question: “Are you kidding me? Why?”

Set aside how this leads to truly impossible levels of insider trading and corruption. (We can come back to that.) Just think for a moment about how it degrades every facet of society.

Kalshi is a negative-sum game. For every winner, there is an equal and opposite loser, minus the fee that Kalshi extracts. No additional value is created.¹ When the gambling economy becomes larger than the actual economy, then actual economic and social activity just becomes something to gamble upon. We all know how that story plays out, don’t we? Desperate people end up taking desperate measures, while the gambling sites maintain plausible deniability and leave everyone else to handle the fallout.

Here’s what I believe: gambling ought to be legal. But it ought to be legal in the same way that cigarettes are legal. It should be heavily regulated, difficult to access, with zero advertising and a ton of social stigma.

(Josh Gondelman phrased it well in his newsletter yesterday: “Gambling should be something you have to hide from your wife and children. It should not be an activity that Kevin Hart begs you to do at every commercial break.”)

I wrote about this two years ago (“Old Gambler Yells at Clouds”). Circumstances have gotten worse, so allow me to repeat myself.

I was a semi-professional poker player in my twenties. It’s still a hobby, and I haven’t lost my touch. Unless you, dear reader, are a professional, you probably don’t want to sit down at the table with me.

Poker is a game of skill, with a significant element of chance. It isn’t pure gambling. But neither are sports betting or prediction markets. Some people are better at sports betting, others are worse. Over time, the money will flow to the sharps and away from the recreational players.

I remember, in my 20s, I played in a game against this one guy who was a big loser. Anytime he was in the game, the game was good. He was a nice guy. Owned a string of pizza parlors. He was going through a divorce. (Amicable, it seemed.) Poker was how he blew off steam. He didn’t mind paying to chase an inside straight draw,. This was his entertainment budget, and he could afford to lose it. It wasn’t healthy for him. But that wasn’t my problem. He was going to lose that money whether I was at the table or not.

I never felt guilty playing in those games because there was so much social friction between guys like him and the poker table. The game wasn’t advertised anywhere. You had to hear about it from someone. You showed up at a nondescript doorway, rang the buzzer, and waited for them to recognize you before being let in. And that meant everyone knew what they were getting themselves into. Caveat Emptor, and all that jazz.

The problem with sports betting and prediction markets isn’t that gambling has been made legal. It’s that it has been made entirely too accessible. Kalshi has Giannis advertising its product. DraftKings has Lebron. CNN is partnering with Kalshi as well. Everything everywhere has been turned into an advertisement for gambling sites. It has never been easier to risk money you can’t afford to lose. It should be hard to risk that money.

We, as a society, ought to be in the habit of stigmatizing and regulating social vices. This seems so glaringly obvious that I wonder sometimes why it even needs to be said.

That doesn’t mean we outlaw all gambling. But it means we really ought to start treating gambling and prediction markets like cigarettes. They are social vices — harmful for the individual, with collective costs that we all bear.

We dealt with cigarettes by (1) adding obnoxious warning labels, (2) outlawing advertising — particularly advertisements that target young people, and (3) banning them from certain locales, and (4) taxing the hell out of them.

Cigarettes are legal, but at least every single smoker had to endure an appropriate amount of social friction to engage in their preferred vice.

The Trump administration isn’t going to handle any of this, because ellohell of course they aren’t. But holy hell some Democratic Presidential candidate ought to make this one of their centerpiece campaign issues. There is nothing more traditionally conservative than declaring “this new vice is bad, and we ought to go back to the way things were in the olden days.” Here we have an issue where progressives are equally outraged, and inattentive normies recognize “yeah there’s gambling in everything now and it seems pretty fucked up.”

In the meantime, while we’re waiting to install a government that actually cares about democratic governance, we should at least engage in some old-fashioned social shaming.

Sports-bettors are losers. Prediction markets are for chumps. If your reaction to Bad Bunny’s halftime performance was “did I win money on it,” then that’s bad and you ought to feel bad about it.

1. (Technically you could argue that they are creating entertainment value, and I’m sure there are a few sicko economists who have written/will write a paper explaining how this is all so very rational when you think about it from just the right angle. But I’m gonna trust that you, dear reader, are able to figure out that the point of Kalshi and of gambling-on-everything isn’t just aw shucks gambling is fun and the market ought to provide as much fun as people desire.)