Picking the winner could win you money

June, 2018

I think I feel the same way about gambling as the typical NRA member feels about guns: I don’t want the government to stop me from having what I want.

In fact, I think there is more justification for banning guns than there is for banning gambling. Guns kill. Gambling is largely victimless. But gambling is mostly forbidden, while guns are protected by the Constitution.

The opposition to gambling is paternalistic, in my opinion. We think we need to protect people from spending the food and rent money. Unless they want to risk everything on stocks.

Most of the trades made every day on the world’s stock markets are nothing more than short-term bets on the direction of the price of a stock. Many of these bets are made by computers and cashed in in seconds with “High-Speed Trading.” You don’t even have to own the stock to bet on it (look up “options (finance))” in Wikipedia. This is not investing; it is gambling. And it’s not only legal; the government encourages it.

Why is it that we think gambling on stocks is good, while gambling on football is bad? I don’t see the difference. Neither apparently do the American people who bet huge amounts illegally on sports. No one knows how much, but estimates range as high as $350 billion a year. That would be more than half as much as we spend on defense.

Prohibition should have taught us that when we pass laws forbidding activities people want to do, all we do is advance lawlessness and corruption. Better to regulate than to suppress.

The Supreme Court has recently given us the chance to change. By ruling that it is unconstitutional for the federal government to forbid 49 of the 50 states from sports betting, the way is opened up for each state to experiment with betting.

My suggestion is that we start by allowing (and taxing) two kinds of betting: Sports betting and political betting. Allowing sports betting will simply bring into the light of day what has become a huge illegal industry that has taught average citizens to flout the law.

Allowing political betting will, I think, spike interest in elections and bring out the vote. People react differently when they have skin in the game. Imagine if the average person knew as much about our political leaders as they do about their sports stars.

They allow extensive political betting in the United Kingdom. You can even bet on some US elections. Right now a bookie called Ladbrokes is offering odds on whether or not Donald Trump will run for a second term and whether or not Kanye West or someone named Ben Shapiro will ever be president.

I’m a big government liberal, but I think the government shouldn’t be telling us what we can’t do without very good reason. There are plenty of good things government does. As economist Paul Krugman puts it, The federal government is an insurance company (Medicare, Medicaid, Social Security) with a defense department attached.


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