While every choice under certainty is in some sense a “gamble”, humans have often gone out of their way to create “gambling” contexts where they can more quickly make many uncertain win or lose choices.
I think there's good reason to ban "gambling" if we're just talking about games of chance where the house always has an edge. It's a type of business that preys on people who have high time preference and there's good reason to protect such people from themselves.
That said, like you, I wish we allowed more forms of financial risk taking that are today illegal, such as real money prediction markets. One policy I'd like to see try is a very simple rule: allow any form of gambling, but only if the result takes at least 24 hours to resolve.
There's likely some nuance to this I haven't thought through, but my thinking is ban things that involve quick feedback loops that suck in people with high time preference and rapidly separate them from their money and in exchange allow arbitrary bets on anything so long as there's a minimum 1-day waiting period on the result. This should allow roughly the best of both worlds.
I don't think "high time preference" is quite the right way to think about compulsive gambling. It's a much more complicated kind of boundedly rational decision making, I think. Not wholly a conscious choice, not even a shortsighted one.
However a 24 hour rule is coincidentally probably a good way to make the right tradeoff.
One example is that there are already restrictions on intraday trades in cash retail brokerage accounts.
I think that is a pretty good diagnosis of the problem, and a pretty good trade-off between letting people do what they want and avoiding rather predatory behavior that we know is destructive.
I need to be able to put myself on a list, where I will be forcefully prevented from gambling. Not everybody's psychology is as invulnerable to traps as yours is.
I think it is mainly women who don't like gambling. If their man loses, they also lose. If their man wins, then there's an increased risk of him moving on to greener pastures. It's a lose-lose proposition for them.
This is insightful, thanks Tim. This reminds me of why women were at the forefront of the various movements to prohibit alcohol consumption over the 19th and early 20th century. Their man drinking was lose-lose for women and their children.
Yes, hookers, but more generally, men would spend winnings on alcohol and carousing. It was rare to win enough from gambling to be able to move-up in the mating market.
Exactly. To move up the mating market you need to show transferable skills. One time winning through gambling is not a transferable skill. Successful cheating at gambling is one though, lol.
The most pernicious argument against gambling in a financial or decision-making context is from the common confusion between "what I want to happen" vs. "what I think is most likely to happen". These are too often taken to be the same thing.
Even today short-sellers on Wall Street are often viewed as "anti-American" people who want businesses and the larger economy to fail. This conflation between is and ought did much to kill perfectly good internal decision markets in US national defense, and various corporations.
Is there a way to frame a bet that doesn't tickle people's sensitivities on this?
I would like to see gambling better regulated, such as a prohibition on most advertising. Better: a bet with known odds should clearly state the expected loss in some standard way, for instance “If you spend a hundred dollars on this bet, you should expect to lose twelve dollars on average”.
Manipulating those who naturally favor gambling, whether though low intelligence, high arousal, low conscientiousness, and so on, into losing up to and including everything they have, seems like the sort of vice we should discourage. Not prohibit, there are reasons people bet, but advertising it on every podcast, with the mere fig leaf of a problem gambling hotline at the end, strikes me as insufficient.
The anti-gambling stance seems like a low effort signal, folks... Why don't we aim our guns at persuasive tech? Ya know, the things that we mindlessly consume, the things that waste our time, the things engineered specifically to exploit/erode our cognition...?
I think you are quite correct that extending the bet-resolution time span does a great deal towards limiting the damage gambling can do, and that limiting gambling to longer horizons would be effective in lowering the costs.
How to implement and enforce such rules is somewhat difficult to nail down, and doing so would destroy probably 90% of the gambling industry (slot machines, casino games, and probably the vast majority of sport book betting). Barring more drastic legal changes, however, that might be the best thing for it, so long as the rest of us get stuck with the costs of supporting those with short time preferences who lose all their money doing foolish things.
“…probably the vast majority of sport book betting”
Why do you think a 24 hour time minimum would do this?
I think if the owners/executives of the FanDuels and DraftKings of the world got to choose, they would take that deal in a millisecond (and surely less than 24 hours! 😏)
Eliminate Vegas and Indian casinos as competition?!? A no brainer for that industry - they would instantly become “the best game in town”. With plenty of possible bets a day or two away.
Yea the eliminating competition part would be good for them. However, and apply salt as I am not a gambler and know about the industry second hand, it seems that the online gambling industry is increasingly going for bets that extremely short term. Short term as in “how will the next play go” short term. I suspect that is because you can get people to keep pouring money in as they attempt to stitch together the highs. Think slot machine players who just mechanically push the buttons until they run out of coins, hardly even noticing the wins. That sort of mindless chasing the dragon seems to be the riskiest and most parasitic behavior group. Put in a 24 hour time limit and all that goes away.
If the law had exceptions for table games that would probably be fine. I think slot machines and always on instant bet resolution is the problem that breaks brains. If I didn’t have to pay for it when people do stupid stuff I wouldn’t care, but if I have to pay that seems like a good thing to remove, cost/benefit wise.
Do you/we have to pay when people lose at gambling today, or are you just speculating about future laws?
I do very little (but non-zero) online sports gambling (the occasional horse race, which has been legal “forever” now). I am an NFL fanatic, and listen to a few football podcasts, some of them sponsored by the gambling sites. It seems pretty clear to me that most of their business is not in the kinds of bets you are talking about. Though whether such bets make up, say, 1% or 19% of their revenue I cannot say.
I suspect that those who burn through their money gambling end up putting themselves and their dependents and immediate families (assuming they are blowing through family money) are getting government assistance in various ways. If they are not, great! Let them go nuts gambling. As I said elsewhere, it isn't my business if people want to do stuff I think is dumb and end up getting very hungry. However, people seem to want to make it my business. Current laws aren't great, but I am more worried about future laws.
It is quite possible that most of the business of sports betting sites isn't the very short duration bets, I don't know first hand. I do know they seem to advertise the hell out of them, and they seem to pitch it as a competitive advantage they believe people want. It may well be a minority of the bettors but a majority of the bets. I don't know.
“I suspect that those who burn through their money gambling end up putting themselves and their dependents and immediate families (assuming they are blowing through family money) are getting government assistance in various ways.”
IMO the argument that any activity that might cause someone to go on public assistance is a reason for banning that activity is the Road to Serfdom, as it justifies all sorts of government intrusion into every aspect of human life.
I’m surprised to hear you in particular making such an argument.
That isn't quite the argument I am making. I am saying that if one is worried about the ravages of gambling as some people are here, the really bad sort seems to be the "bet on what happens in this game in the next 5 minutes" type. That might well pass the cost/benefit if one wants to ban something to avoid having to deal with lots of people who need public assistance as a result. Similar to how people want to ban fentanyl or other hard drugs. I am fine with leaving people to their own devices if I am left to mine, but seeing as how we as a society can't seem to get behind the idea that people are responsible for themselves, there is probably some cost/benefit analysis that needs to be made to balance that out.
So to recap:
1st best: People do whatever, and are responsible for themselves come what may.
2nd best: If we must have some sort of publicly funded safety net we probably should ban only the most destructive things that are likely to put people in that safety net. Ban as little as possible to try and minimize the use of the safety net, which itself should be pretty minor.
Re: the last, I just don’t hear the ads for “bet what happens in the next 5 minutes”, even though I do hear plenty of sports gambling ads these days.
I strongly suspect you are misinterpreting adds for “prop bets” - bets on what an individual player will do in tonight’s game, and other similar things beyond the final score of the game - than actual “what literally happens next” stuff. But most of these are in terms of timeframe no different than who will win the game.
But to repeat, I cannot say whether the “instant” in-game bets (most of which are not in fact “instant” but resolve at the end of the game) are a tiny minority or just a minority of the revenue of these firms.
I would go the exact opposite way. The only reason I would support a hard limit on people's ability to gamble (i.e. make their own decision on the matter) is because I and others will be liable to support them if and when they screw up and need assistance. If people are responsible for their own decisions and the outcomes, then I am fine with them doing things I consider foolish and short sighted. Once I have to pay for it, however, I start taking an interest.
I think there's good reason to ban "gambling" if we're just talking about games of chance where the house always has an edge. It's a type of business that preys on people who have high time preference and there's good reason to protect such people from themselves.
That said, like you, I wish we allowed more forms of financial risk taking that are today illegal, such as real money prediction markets. One policy I'd like to see try is a very simple rule: allow any form of gambling, but only if the result takes at least 24 hours to resolve.
There's likely some nuance to this I haven't thought through, but my thinking is ban things that involve quick feedback loops that suck in people with high time preference and rapidly separate them from their money and in exchange allow arbitrary bets on anything so long as there's a minimum 1-day waiting period on the result. This should allow roughly the best of both worlds.
I don't think "high time preference" is quite the right way to think about compulsive gambling. It's a much more complicated kind of boundedly rational decision making, I think. Not wholly a conscious choice, not even a shortsighted one.
However a 24 hour rule is coincidentally probably a good way to make the right tradeoff.
One example is that there are already restrictions on intraday trades in cash retail brokerage accounts.
I think that is a pretty good diagnosis of the problem, and a pretty good trade-off between letting people do what they want and avoiding rather predatory behavior that we know is destructive.
I need to be able to put myself on a list, where I will be forcefully prevented from gambling. Not everybody's psychology is as invulnerable to traps as yours is.
I think it is mainly women who don't like gambling. If their man loses, they also lose. If their man wins, then there's an increased risk of him moving on to greener pastures. It's a lose-lose proposition for them.
This is insightful, thanks Tim. This reminds me of why women were at the forefront of the various movements to prohibit alcohol consumption over the 19th and early 20th century. Their man drinking was lose-lose for women and their children.
It's not so much risk of his moving on to greener pastures than spending the win on hookers.
it is exceedingly rare that a won bet results in the better exchanging a worse for a better life partner.
Yes, hookers, but more generally, men would spend winnings on alcohol and carousing. It was rare to win enough from gambling to be able to move-up in the mating market.
Exactly. To move up the mating market you need to show transferable skills. One time winning through gambling is not a transferable skill. Successful cheating at gambling is one though, lol.
The most pernicious argument against gambling in a financial or decision-making context is from the common confusion between "what I want to happen" vs. "what I think is most likely to happen". These are too often taken to be the same thing.
Even today short-sellers on Wall Street are often viewed as "anti-American" people who want businesses and the larger economy to fail. This conflation between is and ought did much to kill perfectly good internal decision markets in US national defense, and various corporations.
Is there a way to frame a bet that doesn't tickle people's sensitivities on this?
The US is embarking on a wonderful experiment with mass gambling. Australia went there first: https://tempo.substack.com/p/the-worlds-biggest-losers?utm_source=publication-search
I would like to see gambling better regulated, such as a prohibition on most advertising. Better: a bet with known odds should clearly state the expected loss in some standard way, for instance “If you spend a hundred dollars on this bet, you should expect to lose twelve dollars on average”.
Manipulating those who naturally favor gambling, whether though low intelligence, high arousal, low conscientiousness, and so on, into losing up to and including everything they have, seems like the sort of vice we should discourage. Not prohibit, there are reasons people bet, but advertising it on every podcast, with the mere fig leaf of a problem gambling hotline at the end, strikes me as insufficient.
The anti-gambling stance seems like a low effort signal, folks... Why don't we aim our guns at persuasive tech? Ya know, the things that we mindlessly consume, the things that waste our time, the things engineered specifically to exploit/erode our cognition...?
I think you are quite correct that extending the bet-resolution time span does a great deal towards limiting the damage gambling can do, and that limiting gambling to longer horizons would be effective in lowering the costs.
How to implement and enforce such rules is somewhat difficult to nail down, and doing so would destroy probably 90% of the gambling industry (slot machines, casino games, and probably the vast majority of sport book betting). Barring more drastic legal changes, however, that might be the best thing for it, so long as the rest of us get stuck with the costs of supporting those with short time preferences who lose all their money doing foolish things.
“…probably the vast majority of sport book betting”
Why do you think a 24 hour time minimum would do this?
I think if the owners/executives of the FanDuels and DraftKings of the world got to choose, they would take that deal in a millisecond (and surely less than 24 hours! 😏)
Eliminate Vegas and Indian casinos as competition?!? A no brainer for that industry - they would instantly become “the best game in town”. With plenty of possible bets a day or two away.
Yea the eliminating competition part would be good for them. However, and apply salt as I am not a gambler and know about the industry second hand, it seems that the online gambling industry is increasingly going for bets that extremely short term. Short term as in “how will the next play go” short term. I suspect that is because you can get people to keep pouring money in as they attempt to stitch together the highs. Think slot machine players who just mechanically push the buttons until they run out of coins, hardly even noticing the wins. That sort of mindless chasing the dragon seems to be the riskiest and most parasitic behavior group. Put in a 24 hour time limit and all that goes away.
If the law had exceptions for table games that would probably be fine. I think slot machines and always on instant bet resolution is the problem that breaks brains. If I didn’t have to pay for it when people do stupid stuff I wouldn’t care, but if I have to pay that seems like a good thing to remove, cost/benefit wise.
Do you/we have to pay when people lose at gambling today, or are you just speculating about future laws?
I do very little (but non-zero) online sports gambling (the occasional horse race, which has been legal “forever” now). I am an NFL fanatic, and listen to a few football podcasts, some of them sponsored by the gambling sites. It seems pretty clear to me that most of their business is not in the kinds of bets you are talking about. Though whether such bets make up, say, 1% or 19% of their revenue I cannot say.
I suspect that those who burn through their money gambling end up putting themselves and their dependents and immediate families (assuming they are blowing through family money) are getting government assistance in various ways. If they are not, great! Let them go nuts gambling. As I said elsewhere, it isn't my business if people want to do stuff I think is dumb and end up getting very hungry. However, people seem to want to make it my business. Current laws aren't great, but I am more worried about future laws.
It is quite possible that most of the business of sports betting sites isn't the very short duration bets, I don't know first hand. I do know they seem to advertise the hell out of them, and they seem to pitch it as a competitive advantage they believe people want. It may well be a minority of the bettors but a majority of the bets. I don't know.
It seems I owe you an apology.
From a little bit of Internet digging, it does seem that a large percentage of bets are indeed in-game.
The majority, and perhaps large majority, of this doesn’t resolve instantly, but instead at the end of the game. Still, your point was mostly correct.
Hats off to you for taking the time to dig that up and posting it here!
“I suspect that those who burn through their money gambling end up putting themselves and their dependents and immediate families (assuming they are blowing through family money) are getting government assistance in various ways.”
IMO the argument that any activity that might cause someone to go on public assistance is a reason for banning that activity is the Road to Serfdom, as it justifies all sorts of government intrusion into every aspect of human life.
I’m surprised to hear you in particular making such an argument.
That isn't quite the argument I am making. I am saying that if one is worried about the ravages of gambling as some people are here, the really bad sort seems to be the "bet on what happens in this game in the next 5 minutes" type. That might well pass the cost/benefit if one wants to ban something to avoid having to deal with lots of people who need public assistance as a result. Similar to how people want to ban fentanyl or other hard drugs. I am fine with leaving people to their own devices if I am left to mine, but seeing as how we as a society can't seem to get behind the idea that people are responsible for themselves, there is probably some cost/benefit analysis that needs to be made to balance that out.
So to recap:
1st best: People do whatever, and are responsible for themselves come what may.
2nd best: If we must have some sort of publicly funded safety net we probably should ban only the most destructive things that are likely to put people in that safety net. Ban as little as possible to try and minimize the use of the safety net, which itself should be pretty minor.
Re: the last, I just don’t hear the ads for “bet what happens in the next 5 minutes”, even though I do hear plenty of sports gambling ads these days.
I strongly suspect you are misinterpreting adds for “prop bets” - bets on what an individual player will do in tonight’s game, and other similar things beyond the final score of the game - than actual “what literally happens next” stuff. But most of these are in terms of timeframe no different than who will win the game.
But to repeat, I cannot say whether the “instant” in-game bets (most of which are not in fact “instant” but resolve at the end of the game) are a tiny minority or just a minority of the revenue of these firms.
If we can introduce some sort of safety net in gambling and betting activities, maybe society will be more keen to allow it.
I would go the exact opposite way. The only reason I would support a hard limit on people's ability to gamble (i.e. make their own decision on the matter) is because I and others will be liable to support them if and when they screw up and need assistance. If people are responsible for their own decisions and the outcomes, then I am fine with them doing things I consider foolish and short sighted. Once I have to pay for it, however, I start taking an interest.
There are already numerous safeguards and features, practices and policies that potential customers can avail-of.
I;ve written about these ALOT. I decided a far few over the years
Not going to happen. Gambling subverts the behavioral reward pathways. Just like cancer genes subvert the cell growth pathways.