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It's actually somewhat easy... If you are creating financial exposure to an event with no underlying risk to it, and the point is exposure itself, you are gambling.

In your snow example, those guys were gambling on snow for fun. The formal weather derivative - most weather derivatives have parties (usually players in the energy market, sometimes agriculture) who have real underlying risk and aren't entering those contracts to create risk for it's own sake. It's quite hard to get a market off the ground when there is no underlying risk - people purely speculating generally don't generate enough volume to achieve liftoff. Look at Kalshi and the volume on most bets - it's tiny.

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The "for fun" part is really important here. Addictive behavior comes from a hijacked dopamine system, into which you slowly get lured in. This makes it applicable to social media, drugs and if you squint, even to broad obsessions.

This doesnt help the gambling distinction though. What activities can take over your neurological reward mechanism? Pretty much everything, like neurotically washing your hands. So you have to factor in societal scale and amount of (potential) harm and this is where the vague debate begins. A key point is a dealer/platform, profiting from your behavior, to exclude neurotics.

A striking observation i made was, that gambling machines have deliberate delays between action (eg pull the lever) and reaction/reward for the brain to create tension and to break it with a dopamine spike. This deliberate design is how the machine exploits your brain and makes you an addict. A similar system is the endless social media feed (or even worse brainrot short videos). You scroll, you see new stuff, you identify content maybe emotionally. Its the same fast stimulus-reward cycle. Meassured in 1-2 seconds, same as gambling machines.

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How would Poker fit into that definition?
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Having "underlying risk" to something just means you invested in it before. So for you it's not a gambling as long as you... have gambled before in the other direction?

Buy bunch of call options? Gambling. Buy a bunch of put options for stock I already hold, somehow honorable investing.

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It's all gambling. You can dress it to as having a social purpose, but that's not why most people do it - they want the numbers to go up. The stock market is exactly the same - middle class gambling.
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> The stock market is exactly the same - middle class gambling.

Our entire society is based on being forced to gamble. If you don't invest your money in some capacity then inflation will eat you alive.

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@hgomersall: emerging from a lucky orifice is in fact the main thing in life if you think about it. After all, we are collectively a computer made of monkeys, and the function it is computing is natural selection. Kin selection is one aspect of it. Everything else - including money and innovation - is window dressing.
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Sure, so should we, as society, reward it further by also providing more free money?
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Why should having money ever give you a return on that? I ask that question in the context of moral philosophy, not a capitalist society. Surely there are better ways to determine how an individual should live that doesn't typically amount to emerging from a lucky orifice?
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> You can dress it to as having a social purpose, but that's not why most people do it - they want the numbers to go up.

Too cynical. This disqualifies basically anything you can do with money. If you put it in a bank to get interest you are solidly into the not-gambling end of the scale. And I don't think an index fund is that much more to the gambling side.

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> If you put it in a bank to get interest you are solidly into the not-gambling end of the scale

Isn't that a bet that your government won't devalue your currency fast enough?

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Not really. The question is are you working for your money or are you hoping the money will provide free rent for you. If the latter, you're gambling. The only reason it's relatively risk free is because the system has been thoroughly stitched up in favour of the rent seekers.
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I'm confused by the ideas you're combining here. Do you think all forms of rent-seeking are gambling or just ones that involve money in a direct way?

The only risk in a bank deposit is up at the "societal collapse" level. Are you really so extreme as to say that's gambling, and if so isn't having money at all a form of gambling?

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The point is largely around expectation. Sure, the base case of putting money in a bank is very safe, but the interest on that is not. Factor in inflation and its pretty easy to get negative returns on bank deposits.

If you fiddle with "investments" with the intent of making money without doing anything else, that's gambling.

Sticking money in the bank with the hope that it's still there next time you come back to it is not really gambling. You're just doing the default thing.

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> Factor in inflation and its pretty easy to get negative returns on bank deposits.

But that applies to having money at all. That can't be enough to call it gambling.

> expectation, intent

I understand your argument here, but I disagree. Shifting to the bank that offers the best rate is good management, not gambling. Understanding how interest works and being motivated by interest to do bog-standard money storage doesn't turn that storage into gambling.

> without doing anything else

I don't understand how this connects at all. Maybe it reflects badly on you if you want to turn money into free income, but that doesn't make it any more or less of a gamble. It's a totally different axis.

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>But that applies to having money at all. That can't be enough to call it gambling.

It is, because there's no choice not to gamble. You have to make choices, and none of those choices are risk-free. The options are on a scale between low-risk negative-return and high-risk high-return. But the risk is never zero - not even in FDIC insured accounts - and there's an element of randomness involved in the outcomes.

That's the point. There's no option to say "I have this store of value, and if I don't do anything with it it will retain its value forever."

It won't. So you're forced into risk assessment and randomness, not just with money but with assets in general.

This is the foundation of the economy. All non-trivial transactions are based on risk/reward estimates, and some parts of the economy can force risk and hazard on others.

It's not just a casino you can never leave, it's a casino where the management use various tricks to siphon money from your assets into their pockets without giving you any agency over what happens.

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Government-backed bonds are the intended zero-risk option. You know exactly how much you will get and it is designed to track inflation (sorta).

If you don't believe in that, precious metals are another way to go. I don't personally subscribe to that theory but that's the idea.

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Fair point re seeking the best return given the same risk profile.

Allow me to refine my point: It's gambling when you seek to increase your risk profile in the hope of gaining higher returns, without actually doing anything else other than "invest" the money.

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> If you fiddle with "investments" with the intent of making money without doing anything else, that's gambling.

There are lot of value investors which sit at home do stock picking occasionally. They don't work for their money. I don't think they are gambling.

The only investors that fits your non gambling definition seems to be the active investors who take part in the companies. But most investors don't

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Why don't you think they are gambling?
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> Not really. The question is are you working for your money or are you hoping the money will provide free rent for you. If the latter, you're gambling.

So putting money in my savings account is gambling, but investing in businesses is not.

I suspect I misunderstand your point completely.

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No - it means you are exposed to - electricity / gas / oil prices. Or Wheat maybe?
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It's certainly not well defined today; memecoins, prediction markets, sports betting, and more are all toeing the line of gambling.
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> toeing the line I'm not sure that phrase means what you intended to say here. From Wikipedia, [1]: "Toe the line" is an idiomatic expression meaning either to conform to a rule or standard, or to stand in formation along a line.

[1] https://en.wikipedia.org/wiki/Toe_the_line

It's possible I misinterpreted your statement though, and if so: apologies.

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Prediction markets are 100% gambling. It's just synonym acrobatics.

I say this as someone who had a lot of fun GAMBLING during the World Cup.

https://www.youtube.com/watch?v=mOptJl8Xkx0

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Not 100%

In certain cases you can use information asymmetry to your advantage. You know something they don't. A good example is any market dependent on public opinion surveys (eg political polling). That data can be hard to find. If you can find it faster than everybody else then you win more often. There is still some chance involved but it's more like poker than blackjack (not a great analogy but you get my drift).

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People did this in sports gambling since forever. Professional gamblers would cultivate a source (like a coach) to get inside information to get a leg up. That said - you are still placing a bet based on the best information you have. It's gambling, or else, what other word is for it? Investing?
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Toeing the line? There is no underlying risk to any of that except the bet itself. Of course it is gambling.
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Not in the eyes of law (in many or most jurisdictions that regulate gambling).
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At some point it's going to catch up. Legislation is a very hard process.
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Sports betting is centuries if not thousands of years old.
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See also "binary options", which are such a bad deal for retail investors that the UK FCA explicitly tells you they're a scam.
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> What made one gambling and the other not? What makes any given bet a legitimate financial trade versus pure gambling?

Legally, it's whether the bet meets the legal definition of gambling as per the legislation applicable in your jurisdiction and any binding case law. There's no universal answer.

But from an ordinary language perspective, the difference is whether it involves an element of skill sufficient (at least in theory) to win in the long run if you possess that skill. For example:

Roulette - generally gambling

Blackjack - usually gambling these days, sometimes not if count counting is feasible

Poker - not gambling

Stock market investing - not gambling

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The examples don't hold in most jurisdictions (except for the stock market and if short sells are allowed).

All of the three categories are defined as gambling in pretty much all jurisdictions across the globe. However, they are classified as different types, e.g. roulette is closer to slots than poker is. Then poker can be "cash tables" vs "tournament". The main classifier difference is "game of chance" vs "game of skill", yet there are lots of nuances.

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> Poker - not gambling

https://en.wikipedia.org/wiki/United_States_v._Scheinberg

In the distant past of 2011, offering online poker to Americans, even from overseas, brought serious Federal prison time. That was before the lobbyists got to work.

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> Stock market investing - not gambling

That entirely depends on the asset classes you invest in. Proper stonks? Sure, that's not gambling. But as soon as you enter the fun world of derivatives and daytrading...

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That's fair. A lot of regulation seems to work this way: first you recognize a real harm, then spend years arguing over where exactly the boundary should be
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