alt Hacker NewsIt took decades to clearly define gambling enough to regulate it as we do now. Note that pinball was banned in major cities for decades because it was too similar to gambling devices.
And even with those definitions things weren't very clear. I used to work for financial traders here in Chicago. Every year there would be an unofficial snow futures market. It was a fancy way for all the traders and clerks to gamble on monthly snowfall at O'Hare.
But to my delight, the CME eventually created an actual, legal weather derivative for snow. What made one gambling and the other not? What makes any given bet a legitimate financial trade versus pure gambling? Let me know if you figure it out.
My point being that not having a clear definition won't stop us from grappling with the harms. Nor should it. Figuring out what new things really mean is always a messy process.
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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.
> 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
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
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.