Gambling offers a pleasurable dopamine hit. There's a shot of this in anticipation as the game proceeds. It's not all that different from a lot of other drugs.
There is a lot of gambling that is acceptable. An entrepreneur convinced of the coming success of their new enterprise invests takes a gamble. Actually decades ago it was shown (forget where) that entrepreneurs are actually relatively bad at accessing risks. They are relatively optimists who overestimate results and underestimate risks. That is what makes them entrepreneurs in the first place (those that strike lucky may of course become robber barons and become very good at fighting their risks)
There used to a solid lines between gambling, insurance and investing with a whole pile of legal principles and precedents. The idea was the investing was a business operation. It had its risks, but they were risks intrinsic to any enterprise. Insurance involved offering options based on intrinsic risks. If a ship sank at sea, the insurer would cover the loss. Ships at sea face intrinsic risks, and insurance was a way of spreading the risk more broadly. Gambling has nothing to do with intrinsic risks. If you ran a bar and hosted a Superbowl party, your risks would involve a customer falling from a stool. If you owned a team playing in the Superbowl, you might insure the health and ability to perform of your players. If you place a bet on the point spread, you're betting on a made up risk. A customer falling off a stool or a player pulling a muscle are intrinsic risks. The outcome of the game is extrinsic.
You are right of course, though it is also a bit a matter of language. "Gambling" is different from 'taking a gamble'. Investing in a business differs of course from investing in the market depending on what you invest in. There are grey areas, buying an option is somewhere between investing and gambling. One does invest, but it is a high risk investment, so it gets closer to being a real gamble. And more complicated strategies are investments directed at certain scenarios (e.g. when there is high volatility and uncertainty, a conservative strategy could by buying both call and put options in a spread.
Maybe we could say that true gambling is when on average everybody loses except for the operator of the casino. The stock market has real gains (the market is not entirely zero-sum because real companies make real profits) but there is a lot of luck involved. Poker then becomes gambling because on average it is zero-sum except for the game operator, even if it has aspects of skill (but so has blackjack — a very little bit).
That's a reasonable approach, but a bank that sells puts and calls also makes a consistent profit like a casino even if it sells contracts in which one party wins and the other party loses. That bank is letting investors deal with the intrinsic risks of holding securities, so I'd consider it investing or insurance rather than gambling. It's more esoteric than, let's say an airline buying oil futures to hedge fuel prices, but it still deals with intrinsic risk. (I did some work for an airline. They'd buy petroleum futures and on delivery tell the refinery to turn it into jet fuel or heating oil depending on the prices.)
You’re correct in the sense that people take risks every day, and their experience of life will be much better if they have a basic sense of how to interpret those risks. And in limited cases gambling can be a training ground.
But… any educated adult putting money down on a roulette table with three zeros and expecting to win is a moron. Some lessons should be so obvious that you don’t need to experience them.
And betting on Bad Bunny’s first song? There is no learning going on there. Just bored idiots pursuing pointless play.
Yep. Expecting to win in a lottery/gamble is moronic. However, enjoying the fantasy to win (which isn't available unless you play) isn't. That's human. I don't feel I can label such people morons.
Stop! You're hurting the feelings of snowflake libertarians and ditto extremist capitalists and other way-out-there individualists (hmm, is there a difference between these?)!
I think what people don't get is just how much of a public health crisis this is.
People beat the fuck out of their partners over the losses they cannot stomach, and the companies have entire teams of data scientists who's whole job it is to work with product teams to make it so those same people put too much down to lose next time. It is sickening.
To me, our allowance of big sports networks to get into bed with these companies and let their athletes stump for betting platforms is a sign of moral dereliction up there with doing something as heinous as having Big Bird light a Camel Crush next to Grover.
I'll throw down fifty bucks on a game or two when I'm in Vegas. I know a lot about sports and figure in three hours I'll lose less and might easily win more than I will at the tables. But I have no interest in being one click away on my phone -- that way is going to lie madness, and more important, some really tragic stories. And I've heard a few gambling addict tales of woe -- every bit as anything you'll hear from drug addicts or alcoholics. One concerning aspect of the gambling we have now is that there were props on the Super Bowl that were easily manipulable by individuals. It's one thing to bet on who will score first in a competitive game where both teams are doing their damndest to score and to stop the other team from scoring. It's quite another to have a prop bet on the color of the Gatorade that will be poured on the winning coach -- something that a handful of people could easily manipulate.
I've seen it completely corrupt political conversations. In 2020, my college group chat of very successful people in their 3ps went from talking about who we felt should win the election and why, to who the prediction markets are favoring. People who are addicted to gambling see everything in terms of odds. Classic is/ought confusion
Did you have time to read yesterday's Matt Levine? I feel you and he are saying something similar, though of course his bit is more po-faced:
"Prediction markets have increasingly become sports gambling sites, and compared to traditional sportsbooks they have a range of regulatory advantages. Sports gambling is illegal in some US states and heavily regulated in most others, but Kalshi is in theory federally regulated, so it’s available everywhere and state regulators can’t do much to stop it. And because prediction markets are in theory financial markets, not gambling, they might be available in your brokerage app. “An emerging asset class like event contracts,” is how Robinhood described Super Bowl betting last year.
In particular, Kalshi has better access to one important demographic of sports bettors, which is college students. Most states that allow sports betting have age requirements, and usually you have to be at least 21 years old to bet legally at a sportsbook. But Kalshi, which is federally lightly regulated, allows 18-year-olds to open accounts and bet on sports. Young men seem to be the most active and addicted gamblers, so getting them three years early seems like a big advantage for Kalshi."
The amazing thing is that when you read this passage in the context of his newsletter, the setup makes it sound neutral, as Levine avoids normative language except in egregious cases. But stripped of context as it is here, it sounds bad! It must be related to the Chotiner Effect.
I scrolled down to here to see whether someone else like me is extremely rattled by the reach of tapping very young gamblers. In 2022 I was fortunate to interview Brianne Doura-Schawohl, advocate, consultant, and lobbyist about problem gambling. At that time campuses were beginning to tap into the early gambling firms' underwriting at universities - think encourage tailgating and gambling. It's only gotten worse, deeply worse. As a Dave Karp fan girl, thank you esteemed bedbug, iykyk.
Until fairly recently, people under 21 were considered legal infants and could only be held responsible for debts involving necessities not luxuries. They used to pound this into law students. So, a supermarket could collect but not a jeweler. I have no idea of when this distinction vanished.
"The long-term vision is to financialize everything and create a tradable asset out of any difference in opinion.”
And the author sharply states his opposition to unregulated behavior that can be as self harming as a teenage cutter. It can lead to unparalleled corruption. On its face it is immoral and self defeating , particularly in government.
He then reflects on his semi-pro career as a gambler, with a brief aside of an easy mark who was blowing off steam by losing money.
"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 gather Dave believes he has no moral or ethical duty to help his fellow man. He simply wishes the government would modify the loser’s behavior until what? Everyone is a winner? Doesn’t the behavior of the individual, winner and loser, reflect itself in the society we live in?
Somehow Trump got in the middle of this, but with Dave it always does, and doubtlessly Trump is to blame. I mean truly the man has no shame and I agree with the author, we are circling the toilet as a country and a civilization. But we have been doing that since they allowed lawyers to advertise in the ‘80s. Just as Trump was making his own way as trained by his father to bully his opponents, practice racial discrimination in housing and ignore any ethical or moral societal limitations such that laws were required to curb personal ambition, greed and corruption.
And those laws apparently have failed because the individual has lost his moral and ethical compass to the notion that it’s someone else who should fix it.
Its a bit of a stretch from "(not) help your fellow man" to "heavily regulate and tax a historically corruptive behavior that has only recently been re-legitimized" as a false equivalence.
As far as Trump, it was the Supreme Court striking down a ban on sportsbetting in 2018 that kicked off this adventure.It happened on his watch and its an American tradition to blame or credit the President for whatever happens during his term.
And as far as the individual's role in all this, Dave's position is that a corrupt behavior like making gambling trivially easy to do is corrosive to society as a whole. The great experiment of the Volsted Act showed what happens when you attempt to enforce a specific morality on a population largely unwilling to go along. It did break the back of widespread alcoholism at the cost of establishing a professional well-funded organized crime system and encouraging breaking the law as cool. The government can't save the individual from himself, but it can make it harder for him to fall into bankruptcy. It used to take some effort to lose that much momey, now its trivial and the on line bettors are engaging in heavy behavior modification to encourage it.
Nothing more than a casino. As long as casinos, crypto etc.. are around and accepted, I do not see why Kalshi is any different. I personally never understood why smoking was not banned completely and allowed with a warning message. I guess governments are taking a good cut of the profits through taxes. Thinking about it Kalshi is also profiting governments by levying taxes and have no incentive to change.
For a society that lauds the notion that if you work hard you will get ahead, the overwhelming promotion of gambling is either hypocritical or an acknowlegement that it was never true. I think we underestimate the social impact of gambling, including government-run lotteries, which reinforces the message to the public that the only way to get ahead is through luck. Perhaps this is true for the working and middle class now.
I think gambling should be entirely legal, with the sole regulation being keeping it honest.
I also think drugs should be legal - all of them. Like gambling, the only regulation should be preventing fraud. If you want to gamble yourself into the poorhouse or drug yourself into the morgue, there should be nothing stopping you but good sense.
A lot of today’s problems stem from the fact stupid people are not only surviving, but thriving and reproducing. What I’m suggesting isn’t so much culling the herd as simply letting nature take its course.
This ignores one of the big reasons gambling was outlawed originally. When one party in a married couple lost significant joint funds gambling, both parties were harmed as were any dependents. This happened with business partners as well when one was forced to liquidate to pay a gambling debt. Maybe gambling should be legal, but the funds should be completely private with no other interested parties.
That's just blaming the victims. Gamblers often hide their addiction. Often enough, they're embezzling to cover losses. People change as the compulsion or opportunities change, and they do so more quickly than a marriage or business partnership can be dissolved assuming this is possible. A saavy five year old who knows about daddy or mommy's problem is going to be hard pressed to change parentage before the gambling problems get out of control.
I hate gambling. It’s so dumb. If I’m going to take up a disreputable vice, it’s at least going to be an enjoyable one.
My degree is physics, and that means I took a lot of mathematics, and that means I can calculate odds.
So, no, I do not gamble.
I'd rather spend the $$$ on guitars ;-D
Gambling offers a pleasurable dopamine hit. There's a shot of this in anticipation as the game proceeds. It's not all that different from a lot of other drugs.
I guess for some? To me it seems about as much fun as just setting money on fire.
De gustibus non est disputandum. Some people's brains are wired differently.
Any bet you can't raise or fold is a stupid bet. Especially if some third party wants to skim off a percentage.
Smacks of the crypto hype a few years ago
There is a lot of gambling that is acceptable. An entrepreneur convinced of the coming success of their new enterprise invests takes a gamble. Actually decades ago it was shown (forget where) that entrepreneurs are actually relatively bad at accessing risks. They are relatively optimists who overestimate results and underestimate risks. That is what makes them entrepreneurs in the first place (those that strike lucky may of course become robber barons and become very good at fighting their risks)
There used to a solid lines between gambling, insurance and investing with a whole pile of legal principles and precedents. The idea was the investing was a business operation. It had its risks, but they were risks intrinsic to any enterprise. Insurance involved offering options based on intrinsic risks. If a ship sank at sea, the insurer would cover the loss. Ships at sea face intrinsic risks, and insurance was a way of spreading the risk more broadly. Gambling has nothing to do with intrinsic risks. If you ran a bar and hosted a Superbowl party, your risks would involve a customer falling from a stool. If you owned a team playing in the Superbowl, you might insure the health and ability to perform of your players. If you place a bet on the point spread, you're betting on a made up risk. A customer falling off a stool or a player pulling a muscle are intrinsic risks. The outcome of the game is extrinsic.
You are right of course, though it is also a bit a matter of language. "Gambling" is different from 'taking a gamble'. Investing in a business differs of course from investing in the market depending on what you invest in. There are grey areas, buying an option is somewhere between investing and gambling. One does invest, but it is a high risk investment, so it gets closer to being a real gamble. And more complicated strategies are investments directed at certain scenarios (e.g. when there is high volatility and uncertainty, a conservative strategy could by buying both call and put options in a spread.
Maybe we could say that true gambling is when on average everybody loses except for the operator of the casino. The stock market has real gains (the market is not entirely zero-sum because real companies make real profits) but there is a lot of luck involved. Poker then becomes gambling because on average it is zero-sum except for the game operator, even if it has aspects of skill (but so has blackjack — a very little bit).
That's a reasonable approach, but a bank that sells puts and calls also makes a consistent profit like a casino even if it sells contracts in which one party wins and the other party loses. That bank is letting investors deal with the intrinsic risks of holding securities, so I'd consider it investing or insurance rather than gambling. It's more esoteric than, let's say an airline buying oil futures to hedge fuel prices, but it still deals with intrinsic risk. (I did some work for an airline. They'd buy petroleum futures and on delivery tell the refinery to turn it into jet fuel or heating oil depending on the prices.)
You’re correct in the sense that people take risks every day, and their experience of life will be much better if they have a basic sense of how to interpret those risks. And in limited cases gambling can be a training ground.
But… any educated adult putting money down on a roulette table with three zeros and expecting to win is a moron. Some lessons should be so obvious that you don’t need to experience them.
And betting on Bad Bunny’s first song? There is no learning going on there. Just bored idiots pursuing pointless play.
Yep. Expecting to win in a lottery/gamble is moronic. However, enjoying the fantasy to win (which isn't available unless you play) isn't. That's human. I don't feel I can label such people morons.
Stop! You're hurting the feelings of snowflake libertarians and ditto extremist capitalists and other way-out-there individualists (hmm, is there a difference between these?)!
I think what people don't get is just how much of a public health crisis this is.
People beat the fuck out of their partners over the losses they cannot stomach, and the companies have entire teams of data scientists who's whole job it is to work with product teams to make it so those same people put too much down to lose next time. It is sickening.
To me, our allowance of big sports networks to get into bed with these companies and let their athletes stump for betting platforms is a sign of moral dereliction up there with doing something as heinous as having Big Bird light a Camel Crush next to Grover.
I'll throw down fifty bucks on a game or two when I'm in Vegas. I know a lot about sports and figure in three hours I'll lose less and might easily win more than I will at the tables. But I have no interest in being one click away on my phone -- that way is going to lie madness, and more important, some really tragic stories. And I've heard a few gambling addict tales of woe -- every bit as anything you'll hear from drug addicts or alcoholics. One concerning aspect of the gambling we have now is that there were props on the Super Bowl that were easily manipulable by individuals. It's one thing to bet on who will score first in a competitive game where both teams are doing their damndest to score and to stop the other team from scoring. It's quite another to have a prop bet on the color of the Gatorade that will be poured on the winning coach -- something that a handful of people could easily manipulate.
Gambling, with life. There are a couple of good movies, Repo-Men (2010), Repo Man (2014), which illustrate what this will lead to.
I've seen it completely corrupt political conversations. In 2020, my college group chat of very successful people in their 3ps went from talking about who we felt should win the election and why, to who the prediction markets are favoring. People who are addicted to gambling see everything in terms of odds. Classic is/ought confusion
Did you have time to read yesterday's Matt Levine? I feel you and he are saying something similar, though of course his bit is more po-faced:
"Prediction markets have increasingly become sports gambling sites, and compared to traditional sportsbooks they have a range of regulatory advantages. Sports gambling is illegal in some US states and heavily regulated in most others, but Kalshi is in theory federally regulated, so it’s available everywhere and state regulators can’t do much to stop it. And because prediction markets are in theory financial markets, not gambling, they might be available in your brokerage app. “An emerging asset class like event contracts,” is how Robinhood described Super Bowl betting last year.
In particular, Kalshi has better access to one important demographic of sports bettors, which is college students. Most states that allow sports betting have age requirements, and usually you have to be at least 21 years old to bet legally at a sportsbook. But Kalshi, which is federally lightly regulated, allows 18-year-olds to open accounts and bet on sports. Young men seem to be the most active and addicted gamblers, so getting them three years early seems like a big advantage for Kalshi."
I’m a huge Matt Levine fan.
The amazing thing is that when you read this passage in the context of his newsletter, the setup makes it sound neutral, as Levine avoids normative language except in egregious cases. But stripped of context as it is here, it sounds bad! It must be related to the Chotiner Effect.
I scrolled down to here to see whether someone else like me is extremely rattled by the reach of tapping very young gamblers. In 2022 I was fortunate to interview Brianne Doura-Schawohl, advocate, consultant, and lobbyist about problem gambling. At that time campuses were beginning to tap into the early gambling firms' underwriting at universities - think encourage tailgating and gambling. It's only gotten worse, deeply worse. As a Dave Karp fan girl, thank you esteemed bedbug, iykyk.
Until fairly recently, people under 21 were considered legal infants and could only be held responsible for debts involving necessities not luxuries. They used to pound this into law students. So, a supermarket could collect but not a jeweler. I have no idea of when this distinction vanished.
"The long-term vision is to financialize everything and create a tradable asset out of any difference in opinion.”
And the author sharply states his opposition to unregulated behavior that can be as self harming as a teenage cutter. It can lead to unparalleled corruption. On its face it is immoral and self defeating , particularly in government.
He then reflects on his semi-pro career as a gambler, with a brief aside of an easy mark who was blowing off steam by losing money.
"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 gather Dave believes he has no moral or ethical duty to help his fellow man. He simply wishes the government would modify the loser’s behavior until what? Everyone is a winner? Doesn’t the behavior of the individual, winner and loser, reflect itself in the society we live in?
Somehow Trump got in the middle of this, but with Dave it always does, and doubtlessly Trump is to blame. I mean truly the man has no shame and I agree with the author, we are circling the toilet as a country and a civilization. But we have been doing that since they allowed lawyers to advertise in the ‘80s. Just as Trump was making his own way as trained by his father to bully his opponents, practice racial discrimination in housing and ignore any ethical or moral societal limitations such that laws were required to curb personal ambition, greed and corruption.
And those laws apparently have failed because the individual has lost his moral and ethical compass to the notion that it’s someone else who should fix it.
Its a bit of a stretch from "(not) help your fellow man" to "heavily regulate and tax a historically corruptive behavior that has only recently been re-legitimized" as a false equivalence.
As far as Trump, it was the Supreme Court striking down a ban on sportsbetting in 2018 that kicked off this adventure.It happened on his watch and its an American tradition to blame or credit the President for whatever happens during his term.
And as far as the individual's role in all this, Dave's position is that a corrupt behavior like making gambling trivially easy to do is corrosive to society as a whole. The great experiment of the Volsted Act showed what happens when you attempt to enforce a specific morality on a population largely unwilling to go along. It did break the back of widespread alcoholism at the cost of establishing a professional well-funded organized crime system and encouraging breaking the law as cool. The government can't save the individual from himself, but it can make it harder for him to fall into bankruptcy. It used to take some effort to lose that much momey, now its trivial and the on line bettors are engaging in heavy behavior modification to encourage it.
Nothing more than a casino. As long as casinos, crypto etc.. are around and accepted, I do not see why Kalshi is any different. I personally never understood why smoking was not banned completely and allowed with a warning message. I guess governments are taking a good cut of the profits through taxes. Thinking about it Kalshi is also profiting governments by levying taxes and have no incentive to change.
For a society that lauds the notion that if you work hard you will get ahead, the overwhelming promotion of gambling is either hypocritical or an acknowlegement that it was never true. I think we underestimate the social impact of gambling, including government-run lotteries, which reinforces the message to the public that the only way to get ahead is through luck. Perhaps this is true for the working and middle class now.
Social shaming is correct. This sort of gambling is happening because too many people are bored out of their minds, and that’s their fault.
The message needs to be: grow up. Do something useful.
I think gambling should be entirely legal, with the sole regulation being keeping it honest.
I also think drugs should be legal - all of them. Like gambling, the only regulation should be preventing fraud. If you want to gamble yourself into the poorhouse or drug yourself into the morgue, there should be nothing stopping you but good sense.
A lot of today’s problems stem from the fact stupid people are not only surviving, but thriving and reproducing. What I’m suggesting isn’t so much culling the herd as simply letting nature take its course.
This ignores one of the big reasons gambling was outlawed originally. When one party in a married couple lost significant joint funds gambling, both parties were harmed as were any dependents. This happened with business partners as well when one was forced to liquidate to pay a gambling debt. Maybe gambling should be legal, but the funds should be completely private with no other interested parties.
Sounds like a good lesson in being careful about who they associate with.
That's just blaming the victims. Gamblers often hide their addiction. Often enough, they're embezzling to cover losses. People change as the compulsion or opportunities change, and they do so more quickly than a marriage or business partnership can be dissolved assuming this is possible. A saavy five year old who knows about daddy or mommy's problem is going to be hard pressed to change parentage before the gambling problems get out of control.
It’s not my job or my responsibility to look out for your interests.
So, your the guy driving on the wrong side of the road with his headlights off after dark. Hey, it's not your job .....
Driving properly looks out for my interests. Any benefit you derive is purely coincidental.
Any thoughts on the push into real estate by the predictive markets?
https://parcl.co/blog/parcl-x-polymarket-launch-real-estate-prediction-markets
I don't think it's a great idea-see your column-but when I shared this with a group of real estate appraisers, there was less concern.