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The battle to stop clever people betting

economist.com

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Re: The battle to stop clever people betting

#81

Post by pama »

wbshaw wrote: post #75
jbstack wrote: post #59

Earlier quoted context omitted.

It's a bad analogy because the incentives are totally different. With sports betting (of the type in the article) you're betting against the bookmaker. If you win, they lose, and vice versa. Obviously it's better for them that you lose. With financial markets you are betting against other users. The ones running the market take fees on each transaction, so they don't care whether you win or lose. Their incentive is j…

I always understood bookmaking as the house making money on the vig. They don't care who wins or loses. They just want to make sure there's an equal number and they take their percentage off the top of all the bets. Too many people betting the over? Move the line.

The article explains that there are other betting systems/organizations where you bet against the house, especially in early times of a new type of bet, before there is market information. These organizations try to eliminate/reduce the power of intelligent players. In financial markets the function of the house is done by market makers. You could technically burn down a market maker with superior intellect and a deep bankroll, but they generally have very deep pockets and make money at a fast rate to weather the storms.

Re: The battle to stop clever people betting

#82

Post by Youden »

mr_mitm wrote: post #80
Youden wrote: post #76

Earlier quoted context omitted.

> Neo brokers offering highly leveraged index funds securities These, eToro and the like, aren't "brokers" so much as online betting platforms for the stock market. A typical broker like Interactive Brokers, Charles Schwab etc. acts as a gateway to the market, other traders act as counterparties, and is bound by strict regulation These "neo brokers" as you call them don't. Those "securities" you're buying are offered…

I was thinking of platforms like Trade Republic, and it's my understanding that they are backed by a licensed bank and what you trade are indeed regulated derivatives. Have I been misinformed?

Hadn't heard of that one, I don't immediately see anything that makes it seem as dodgy as eToro. Do you have a link to any of these highly-leveraged securities they're trading?

Re: The battle to stop clever people betting

#83

Post by pama »

integralid wrote: post #61
ekjhgkejhgk wrote: post #44

If you want to bet, you could do so in regulated markets like financial markets. This isn't a smartass remark "stock market is gambling". I literally mean that the financial markets went through all this bullshit 100 years ago, and came up with rules to make them fairer. For example, you won't be blocked from the stock market just because you do really well.

Stock market is not gambling, but you can definitely gamble on the stock market. Considering it's a zero sum game (instead of negative sum, like in casino) and it's taxed favorably I have no idea why anyone still does sports betting.

The financial markets are only near-zero sum at the level of large finanical institutions. For everyone else there is a cost per transaction (either a direct fee or your info gets shared with a favored sharkpool first). Limit orders give away information and market orders pay the spread between buy and sell. Not exactly zero sum at a technical level, but definitely much closer to it than casinos.

Re: The battle to stop clever people betting

#84

Post by dangus »

singron wrote: post #55
dangus wrote: post #10

Earlier quoted context omitted.

I imagine there’s lots of money to be made on fools in polymarket, like “Will the US confirm that aliens exist in 2025?” That topic had over a 10% “yes” chance in January. Betting no on that is better taking out a CD.

You can still make that bet at 10% "yes" for the next year. Previous years had similar patterns, so it's not a reaction to Trump. To be fair, we don't need to find little green men in a UFO. It's sufficient to e.g. find fossils of extinct microorganisms on Mars, which is a slim possibility that's a goal of the Mars Sample Return mission. These markets also have low volume at reasonable prices. If you bought $10K of "…

I don't believe that fossils of microorganisms were counted in the resolver, but the ambiguities of Polymarket are definitely something to be wary of if the resolutions aren't well defined.

To your last point, I'd argue that the S&P 500 has way more risk. Bets for insane stuff like this where a sufficient number of morons are believers in the obviously-not-going-to-happen outcome are the ones that act like CDs.

Re: The battle to stop clever people betting

#85

Post by mr_mitm »

Youden wrote: post #82
mr_mitm wrote: post #80

Earlier quoted context omitted.

I was thinking of platforms like Trade Republic, and it's my understanding that they are backed by a licensed bank and what you trade are indeed regulated derivatives. Have I been misinformed?

Hadn't heard of that one, I don't immediately see anything that makes it seem as dodgy as eToro. Do you have a link to any of these highly-leveraged securities they're trading?

This is a 73000x security on silver: https://www.ls-tc.de/en/turbo/4244036

It's got an ISIN and all that.

L+S is the exchange where Trade Republic trades: https://support.traderepublic.com/en-nl/705-On-which-trading...

Re: The battle to stop clever people betting

#86

Post by pama »

deadbabe wrote: post #37

Why wouldn’t you ban clever people? Isn’t the point to let all players have a fairly equal chance? Someone’s going to win the money regardless, so it’s not like you’re saving money. If the same data savvy people are just going to win most of the time, why would people bother playing? Ultimately you would not have enough players and the industry collapses. I don’t understand why this makes the casinos the bad guys.

Per the article, the intelligent bets are typically against the house (unpopular/early), not other people. The organizers wouldnt care if other people lost their money. Addicts would still bet somewhere.

Re: The battle to stop clever people betting

#87

Post by m4ck_ »

blell wrote: post #42
m4ck_ wrote: post #26

I would love to see the gambling industry beaten back into whatever holes they slithered out of. If you want to gamble it should be in some smokey back room at a liquor store. I'm surprised the christian right isn't making more of a fuss about gambling, but I guess they're getting greased to look the other way.

Lately it feels like more and more people who are not religious invoke Christ to tell believers what they must do.

Well, us non-believers are always told how we should live, what we should believe, how horrible we are for living our lives the way way do, etc, under penalty of eternal torture - why shouldn't I hold them to their own standards? It's their game and they can stop it any time they want.

Re: The battle to stop clever people betting

#88

Post by ekjhgkejhgk »

integralid wrote: post #61
ekjhgkejhgk wrote: post #44

If you want to bet, you could do so in regulated markets like financial markets. This isn't a smartass remark "stock market is gambling". I literally mean that the financial markets went through all this bullshit 100 years ago, and came up with rules to make them fairer. For example, you won't be blocked from the stock market just because you do really well.

Stock market is not gambling, but you can definitely gamble on the stock market. Considering it's a zero sum game (instead of negative sum, like in casino) and it's taxed favorably I have no idea why anyone still does sports betting.

> Stock market is not gambling

I don't like picking on definitions, because then we start discussing the definitions instead of the underlying points. But if you're going to make such definitive statements, then I have to reply with "depends on your definition of gambling".

> gambling: the practice or activity of betting : the practice of risking money or other stakes in a game or bet

Re: The battle to stop clever people betting

#89

Post by ekjhgkejhgk »

jbstack wrote: post #59
ekjhgkejhgk wrote: post #44

If you want to bet, you could do so in regulated markets like financial markets. This isn't a smartass remark "stock market is gambling". I literally mean that the financial markets went through all this bullshit 100 years ago, and came up with rules to make them fairer. For example, you won't be blocked from the stock market just because you do really well.

It's a bad analogy because the incentives are totally different. With sports betting (of the type in the article) you're betting against the bookmaker. If you win, they lose, and vice versa. Obviously it's better for them that you lose. With financial markets you are betting against other users. The ones running the market take fees on each transaction, so they don't care whether you win or lose. Their incentive is j…

> With financial markets you are betting against other users.

Learn what a "broker" is.

Re: The battle to stop clever people betting

#90

Post by quickthrowman »

jbstack wrote: post #59
ekjhgkejhgk wrote: post #44

If you want to bet, you could do so in regulated markets like financial markets. This isn't a smartass remark "stock market is gambling". I literally mean that the financial markets went through all this bullshit 100 years ago, and came up with rules to make them fairer. For example, you won't be blocked from the stock market just because you do really well.

It's a bad analogy because the incentives are totally different. With sports betting (of the type in the article) you're betting against the bookmaker. If you win, they lose, and vice versa. Obviously it's better for them that you lose. With financial markets you are betting against other users. The ones running the market take fees on each transaction, so they don't care whether you win or lose. Their incentive is j…

A book maker and market maker offer the same service: liquidity. The only difference is the market they offer liquidity in.
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