Why did the American legal system, at a very early date, differentiate between betting on sports and betting on the stock market?Sports gambling can give athletes an incentive to play poorly and bet on their opponents, but stock gambling can likewise give the managers of corporations an incentive to manage poorly and sell the stock short. The transactions approved as speculation, on the other hand, involved some other useful societal end, even if the risks associated with speculation were indistinguishable from the risks associated with gambling.
- The day after the Super Bowl, speculators will place bets that stock prices will go up or down, that interest rates will rise or fall, that currency exchange rates will move in one direction or another.
- In the late 19th and early 20th centuries, there was an intense political and legal controversy over whether people should be allowed to risk money on the prices of things they do not own, such as by buying and selling grain futures without owning any grain.
- The difference between betting on sports and betting on the stock market—and more broadly the distinction between unlawful gambling and lawful speculation—was based primarily on the idea that risk is tolerable as a means to some greater end, but that it’s not a worthwhile end in itself.
“As gambling has lost some of its moral stigma over the past few decades, the enjoyment of risk for its own sake has increasingly come to be understood as little different from other forms of entertainment.”