Comment by mullingitover
5 hours ago
> “Congress did not take a wrecking ball to all sports gambling regulations built up over decades by federal, state, and tribal governments when it amended the (Commodity Exchange Act),” Judge Ryan Nelson wrote in the unanimous decision.
Incredible that it's taken this long to arrive at the obvious.
Gambling is a negative externality that needs to be taxed.
Gambling takes advantage of the poor, under-educated, and addictive personalities and puts them into financial distress. This places burden on families, the state, and local municipalities. It creates strain on the workforce and deflects legitimate economic activity that would otherwise strengthen the economy.
We're a free society. I'm fine with gambling from a personal liberty perspective, but the companies that facilitate and profit need to pay 40-50% of their gross revenue to the government. That's comparable to tobacco.
Companies also need to be restricted in how they are able to advertise their vices. Never to children, and never targeted to at-risk personality types.
They also need to be tightly regulated and kept from using dark patterns and addictive gotcha mechanics to cause even greater harm to those most at risk.
> companies need to pay 40-50% of their gross revenue to the government. That's comparable to tobacco.
taxing a vice is worth it on paper, but the second-order effects (nonstop alcohol ads, pervasive gambling app dark patterns) aren't worth it imo
When was the last time you saw an ad for cigarettes?
Those second-order effects are easy to mitigate with sensible public policy. And it's not like we have to invent the solution from scratch — we've done it before, very effectively.
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Aren't worth what? The tax? Or the vice being legal in the first place?
You can't tax revenue in sports gambling markets, it actually just leads to predatory gambling products with massive vig/house edge. This was attempted in Tennessee. Margins are extermely low sports betting, like 4.5%. Its actually a loss leader typically. So for casinos that only have this type of wagering it taxes like this aren't going to work. A casino might turn over 50 billion yearly but only have a 2.5% edge in sports betting but you're proposing we tax them on the 50 billion. It doesnt work.
It will either push them out of business, or they'll find a way to screw the player to increase margin through even more deceptive products.
If the legal entity can't operate because of a tax on revenue than illegal offshore entities will gladly take their place and do.
The only solution really is sharia law, a complete ban and harsh punsihments for all operators and customers. I say this ironically but it actually is really the only solution, and even this doesnt work entirely.
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Your argument of course sounds nice and fails under your inability to define "gambling."
I view favored house-odds, on arbitrary games or not, as unethical and predatory. This is the classic casino slot machine and related. However, Poker doesn't have house odds, it is a fair game.
Move one level up: prediction markets don't have house-odds if implemented plainly. On non-game events, they also have a positive externality, which already contradicts your claim: prediction markets predict quite well.
Yet another level up: investing in the stock market. The same authentic gambler who burns money into a slot machine can play the stock market to similarly disastrous ends. But if you define this as gambling and want to outlaw or limit it to 'professionals' then you bar people from capital markets which is absurd.
Or, at least treat it like a public health issue. Used to be that if you wanted to gamble, you had to physically to a dedicated gambling zone.
Which we called the "stock market"
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I don't think you can equate Kalshi style "prediction market" with gambling in Vegas. The worst thing that can happen in Vegas is you the gambler go bankrupt. In the meantime we already have reports of war intelligence in Ukraine being distorted so someone who betted on frontline movements can pocket some cash. Losing a war because some rich degenerate is trying to bet his way towards a second Ferrari is less unlikely than you imagined.
The reports that were altered were public reports at the ISW from open reporting, not government intelligence. If you lose a war because you based your tactics and strategy off of media reports instead of your own intel, you weren't going to win that war anyway.
That said, I recognize the broader point. Betting on everything, especially things that betters can directly influence is incredibly dangerous.
You can always just ban things. The families of those who go into financial ruin from gambling would prefer this.
> gotcha mechanics
gacha mechanics
The government never needs to tax things. If you think it is negative to society then it can be banned so that money can be spent elsewhere.
Why should it be comparable to tobacco? It should be derived from first principles. Figure out the external cost to society and tax it enough to pay for those costs after money distribution overheads. If there is no tax structure where the revenues exceed the costs, ban it.
The difficulty with taxing prediction markets is that encouraging gambling on some events incentivizes gamblers to try to influence those events in a way contrary to how people would want to influence them in the absence of gambling, which typically means gamblers are incentivized to influence events in a way that will increase societal harms. For some events, resolving one way or the other is inconsequential, but this is not true for many of the events I see people gambling on in prediction markets.
The law is slow by design, it's deliberative, it's multi-staged, it's escalatory and obsessed with consulting multiple jurists. That can be extremely frustrating until you start looking into how the country would look if individual judges were able to fast-track the whole system. Naturally we'd celebrate the positive outcomes, but the bad ruling would immediately go into effect rather than facing injunction, review, etc.
These laws have profound effects and it takes people time to learn about what they pertain to, especially new technology or new ways of using it. It's good to have periods of feedback between the public, the courts, the legislature and the executive branch. The same things that slow down what we most want to happen quickly also slow down the things we desperately want to avoid.
"If only the law moved as quickly as an individual" is great until you get a guy like Trump in power.
Was great when the world ran on horses and whale blubber.
The legal system tells itself this noble story of measured action without realizing it actually became the bad guy many decades ago.
My brief little opinion here is half informed from dating a lawyer for a few years.
The law being slow is exactly why a guy like Trump in power is dealing so much damage. Nearly everything he’s done has been illegal, but the decisions often take so long that they have no effect.