As usual, on his show Last Week Tonight, John Oliver nicely explains how these rapidly growing online betting markets like Kalshi and Polymarket (that I have previously discussed here) work and why they are such a menace.

Warnings are being issued that gambling in the US is getting out of control because of the ease with which the new apps can be used to make bets on pretty much anything at any time.

Gambling addiction is spiraling “out of control” in the US, a leading campaigner for stricter guardrails has warned, as experts from around the world are set to gather in Boston to push for more regulation of the industry.

The rapid expansion of online gambling, prediction markets and sports betting platforms, “demands a public health response”, according to Harry Levant, director of gambling policy at the Public Health Advocacy Institute (PHAI), urging policymakers to intervene.

“You regulate the distribution, the speed, the type, the access to the product, because the product is what’s dangerous,” he said, calling for gambling to be treated like alcohol or tobacco. “The problem is the product, not the people,” said Levant. “We have a crisis here.”
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Sports betting has been legalized in 39 states and Washington DC since the landmark 2018 supreme court ruling.
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On both the federal level and in numerous states, legislation has been introduced to regulate online gambling. One of the bills that will be talked about on Friday is the Safe Bet Act, introduced in Congress by Tonko and Blumenthal, which seeks to establish “minimum federal standards” for legal sports betting and seeks to impose limits on marketing, introduce affordability checks and restrictions on apps using artificial intelligence to track players and create bets.

It is not only the US that has this problem. The UK too has seen a surge in online gambling with terrible consequences, and there are tragic stories (such as this and this) about people who have taken their own lives because of their excessive losses. Britons have a long history of gambling on sports, with football pools being common, Even my father would enter those when we lived in the UK even though he was clueless about soccer and only had the vaguest idea how the pools worked. Betting on horse races is also common. But in the past, they required mailing the pool sheet in or going to the neighborhood bookies, all of which took time and effort, unlike the gambling apps of today, thus discouraging impulsive or desperation betting of large amounts.

Betting on sports can be the gateway to gambling addiction because it seems relatively harmless, people think they know what they are betting on, and it can even be seen as an expression of fandom, showing support for one’s team. But as I have said repeatedly, gambling is a mug’s game where you can easily lose your shirt. Almost everyone loses money. The only ones who do not are those who have some insider information or have the resources to spend all their time exploring the tiny niches in which they can get a small advantage.

The only way to personally deal with gambling is to treat it as entertainment where one allocates a certain amount of money that one can afford to spend on it, like one does with tickets to concerts or sporting events and such, not as a means of making money. The money that you bet should be treated as gone forever but the reward is that you presumably obtained some enjoyment from it, however fleeting it was. But the catch is that those other forms of entertainment do not have the addictive qualities that gambling sites deliberately create, nor are they so easy to spend on all day and all night, anywhere, just with the tap of a finger.

Add cryptocurrencies to the mix and you now have all the ingredients to have criminal groups manipulate the markets to make money at the expense of the poor saps who think they can beat the system.

Regulating this properly will be difficult since the Trump family is heavily involved with it, with one of his sons Don Jr. serving as ‘advisor’ to both gambling companies, though what advice he gives is not specified. It looks like he was appointed more as a bribe to have Trump favor the companies. And it seems to be working, As Oliver says, Michael Selig, the chair of the Commodity Futures Trading Commission (CFTC), the body that is entrusted with overseeing this area, has not only not done anything about it, he is even suing states to block them from regulating the industry, claiming that the CFTC has exclusive jurisdiction. The CFTC is supposed to have five members of which two have to be from the minority party but it currently has no one except the chair. You would think that that would make invalid any decision that body makes, but that does not seem to be the case. Selig seems to treating himself as the sole authority, another example of the rot that is endemic in this administration.