I don't love casinos or lotteries, but at least there's the friction of having to travel to a physical location to feed your addiction.
And then there's the whole "insider trading" and "gambling on war" angles that come into play with prediction markets.
> it is clear from studies and from what we see with our eyes that ubiquitous sports gambling [...] is mostly predation on people who suffer from addictive behaviors.
> This is not a minor issue. This is so bad that you can pick up the impacts in overall economic distress data.
> the financial consequences of legalized sports betting [...] include a 28% overall increase in bankruptcies (!). [...] a 28% increase in bankruptcies is far more than I would have predicted. The typical adult bankruptcy rate is about 0.16%, so this would mean about 4bps (0.04%)/year of additional bankruptcies, or an over 1% additional chance a typical person goes bankrupt during their lifetime. [...] A bankruptcy is extremely socially expensive, on the order of $200k. That alone is almost triple the profits, and clearly wipes out all the social gains. Legalized online sports betting is currently a deeply, deeply horrible deal.
> [...] there might be a 3% overall increase in domestic violence as the result of legalized sports betting [...] This is a huge direct cost to bear. Domestic violence ruins lives. It also is a huge indicator that this is causing large amounts of distress in various forms, and that those gambling on sports are not making rational or wise consumption decisions.
OTOH allowing those kind of activities WILL end up with people opting in for the greater evil and thus some kind of limits should be enforced by governments.
I have no idea what would be the right approach, but outright banning prediction markets and casinos is definitely not the right one.
Nations have established middle grounds for gambling. To gamble, drive a couple of hours down to an exempt casino and set fire to your money if you so wish. Bootleg operations are permitted as long as they stay low. Prostitution has similar regulations. Sports betting, Onlyfans & Prediction markets remove those necessary frictions from each vice, preying on men (it's mostly men) at their most vulnerable.
Prediction markets : gambling :: weed : cigarettes
America is the land of the free, but I think there have been and will continue to be reasonable disagreements on the question of, free to do what? It's evident that "freedom" isn't a pure, unrestricted thing in the anarchist sense. We all agree that through the democratic process, laws can be made to declare some things not free to be done.
And to the degree that various taxpayer-funded social programs exist, the cost of grown consenting adults destroying their own lives are directly borne by the rest of us.
> but outright banning prediction markets and casinos is definitely not the right one
In general, I think a gradual "ban" in the form of taxation is often times better, especially for things that society is trying to discourage out of its sinful or destructive nature; think cigarettes.
I'm not sure why we think this works.
Gambling is considered bad, and banned in many states, but many of those states run a lottery. This is just a straight up theft from the poor who are least well equipped to understand they are playing a rigged game, and not rigged in their favor.
I think gambling is almost a natural instinct in humans, and a state-run lottery may be a relief valve for that itch to be scratched in a controlled manner.
That rationale gets undermined if the state lottery is widely advertised in a predatory manner though.
Would be interesting to see how a new prohibition amendment on gambling on games of chance would work.
Or if you allow it put a warning like the surgeon generals warning on tobacco. Clearly state that most people lose money.
Smoking is legal but advertising cigarettes is illegal. I grew up in the 1980's where smoking was everywhere. We even had a smoking area at school. Today I don't know anyone that smokes. Obviously people still do but it is much less common
These markets are a straightforward way to cut through all the noise of the current media conglomerates. Rather than getting bombarded by inflated headlines a glance at polymarket or kalshi is often enough to know whether something is actually happening or it's just the media corporations trying to get your attention.
Of course there should be limits with regards to what kind of markets are allowed on these platforms. But in a lot of areas there's genuine price discovery happening that's not available anywhere else.
A market that only works as long as participants in the market also pretend that they aren't in a market is nonfunctional.
Let all reasoning be silent when experience gainsays its conclusion. The beautiful libertarian theories have failed.
* researchers found that prediction markets are actually good for your wellbeing
* lobby group is lobbying to fight against Utah lawmakers who are working against the wellbeing of people in Utah
Perhaps a solution instead of banning them would be to create a class similar to accredited investors that are allowed to participate. And stuff like market manipulation should just be prosecuted in old fashioned ways like we prosecute any crime.
It's like you make something legal, and some group of people try as hard as possible to push the limit as far as they can, and in turn ruin for everyone.
In sports? Perhaps you just observe a player get injured in a car accident and bet based on that.
It becomes problematic when we make a game of it and add financial stakes. Gambling is a lot like drugs in its ability to hijack the brain's reward circuits. I stopped investing in cryptocurrencies because seeing +400% profits was like crack. I never gambled any money I couldn't afford to lose but there are people out there who were leveraging their entire lives to FOMO into markets.
https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_...