A Casino in Every Pocket – Gambling with The Future

Governments have a duty to protect their citizens from harmful and addictive products and to adopt a public health response to gambling.

By Anil Madan

Shortly after the attempted assassination attempt on candidate Trump in July, the Wall Street Journal reported that Polymarket, a crypto-based prediction market, had seen a surge of interest in its betting markets tied to the presidential election. That article reported on a 20-year-old college student in Canada who bought thousands of contracts on the prospect of Trump’s winning the election and making $700 in less than one hour.

Gambling. Pic – Slot Casino Online

$700 is a trifling sum, but perhaps not to a college student. And if the short time he spent on the trade, or gamble if you will, is indicative of anything, it is that there is more to the story. Sure enough, the WSJ reported that in the preceding month, trading volumes on Polymarket had hit $112 million, but by July 18, that month’s volume had exceeded the prior month’s number.

One might be tempted to think that Polymarket’s system simply reflects market wisdom. There is something to that. Here is how it works. Contracts are based on a binary selection of yes-or-no to a specific question. So, in the past, the questions included Biden would drop out of the running. Each trader (or better or gambler) can purchase a “yes” or “no” contract. The price of the contract will range from zero to $1. When the question is definitively answered, everyone who holds a contract that got the answer right is paid $1 and everyone who bet the wrong way gets nothing, i.e., loses his stake. In a sense, the price reflects the collective wisdom of all those participating in this particular market, about the probability of the outcome.

The WSJ article went on to point out that Polymarket’s website showed that the college student had made over $150,000 since 2021.

About two and one-half weeks before the November 5 election, the WSJ reported that although polls across the nation showed the Trump-Harris race was neck-and-neck, the betting market, namely Polymarket was telling a vastly different story. There is Trump who had been even with Harris two weeks earlier at 50-50, now had a decided edge of 60% to 40% on the Polymarket platform.

This may have been an artifact caused by a $30 million bet on Trump by four account holders on the Polymarket site. Or, it was, just market wisdom. There was no serious charge that betting on Polymarket influenced the election.

A day after the election, the New York Post reported that the $30 million in bets were placed by a still anonymous French whale who raked in $48 million in profits. In all, the Post reported $3.7 billion worth of bets were placed on the Polymarket platform on the presidential election.

The so-called whale told the WSJ that he placed his bets simply to make money and he had no political agenda.

While this anecdotal evidence of betting on the presidential election is interesting, it appears to be only a small part of the surge in gambling worldwide.

The Lancet Public Health touts itself as the world-leading public health journal. The journal commissioned a study of gambling and published an article titled: ‘Time for a public health response to gambling’.

The Lancet article minces no words: “Gambling is not an ordinary kind of leisure; it can be a health-harming, addictive behavior. The harms associated with gambling are wide-ranging, affecting not only an individual’s health and wellbeing, but also their wealth and relationships, families and communities, and deepening health and societal inequalities.”

The commercial ecosystem supporting gambling has been transformed by its digitization. The Lancet Public Health Commission warns governments and policymakers to treat gambling as a public health issue with harms on a par with and exceeding those of alcohol and smoking.

The gambling industry sees a highly profitable market that is rapidly expanding with much room to grow. The Commission warns that we are on the precipice of an epidemiological landscape,

The numbers are staggering. In 2023, the Commission estimates that almost half (46.2%) of adults and 18% of adolescents had engaged in gambling. Whereas only 1.4%, a small proportion, of this represents problematic gambling, the number of women and men experiencing risk gambling is growing rapidly.

The ecosystem enabling and supporting gambling is complex and the capabilities of digital platforms provide new and innovative opportunities for targeting potential customers and victims. The outreach via social media, collection of user data, and the momentum provided by sports and media sponsorships and advertising outreach make what seems like harmless social gambling acceptable. All this masks a multibillion-dollar market.

For those hoping that government can and should do more to address this problem, is the sorry realization that governments are often conflicted, Governments in general have paid little attention to the harms that addictive gambling causes. They are instead more focused on the revenue generated by taxes on gambling revenues. And when it comes to state-run lotteries, governments promote gambling while paying lip-service to problem gambling and oversimplifications such as blaming individuals for their behaviour.

The Commission takes note of the gambling industry’s claims that their products offer enjoyment to millions and the overwhelming majority of participants do not suffer the adverse effects claims and therefore, government should not encroach on the freedom of individuals. The Commission’s response is that these industry assertions are deeply misleading. The Commission emphasizes that governments have a duty to protect their citizens from harmful and addictive products and to adopt a public health response to gambling.

The Commission estimates that the gambling industry’s growth will result in consumers losing $700 billion per year by 2028. More than 80% of countries permit gambling and online gambling is essentially borderless and available everywhere with an internet connection.

Commercial gambling would not have grown as fast and penetrated society as deeply as it has without digitization and access via smartphones. The consequences of the shift to new platforms offering easy access to betting has not been recognized or studied. Modern technology houses a gambling ecosystem of software-controlled information technology and financial services that is supported and endorsed by strong and profitable partnerships among media, social media, professional sports teams. These partnerships and alliances provide gambling platforms with marketing access to huge new audiences.

The Commission recognizes that this far-reaching and interdependent corporate ecosystem collectively wields substantial influence over policy and also the ability to manage, manipulate and leverage the behaviour of consumers.

Evolving online gambling products are designed to present engaging rapid and intensive wagering opportunities. These characteristics create a greater risk of harm for consumers. In-game betting during live matches that is available to those attending in person and also those watching on TV, cable, streaming or online, has placed a casino in every pocket and made online sports betting instantaneous and increased both its frequency and prevalence.

The success of these approaches have led states to offer faster cycles and more betting opportunities for traditional lottery games. And these are increasingly accessible through smartphone apps.

The Commission’s summary is worth reading in full: “Regulating an increasingly global gambling industry presents substantial challenges, but they are not insurmountable. The global nature of the industry necessitates strong international regulatory collaboration. Additionally, increased levels of research and improved monitoring systems are required to produce credible, independent, non-industry-driven, and therefore reliable, evidence on gambling harms and the efficacy of various control methods.”

“Without adequate oversight, profit-driven corporate behaviours in the gambling industry will pose ever greater risks to a widening circle of consumers and to public health worldwide.

Cheerz…
Bwana

Mauritius Times ePaper Friday 29 November 2024