Sat. Jan 22nd, 2022


The ads were inevitable all week. From the giant screen at Times Square’s Nasdaq MarketSite to billboards on the subway, New Yorkers are bombarded with memories that their state has just become the largest in the union to legalize online sports betting.

“Ring the bells, let go of the doves – Caesars Sportsbook is here,” proclaims one imperial gilded pitchman to a follower of the Las Vegas Palace of the same name. Social media posts from DraftKings and FanDuel offer hundreds of dollars in risk-free betting to buy the loyalty of bettors who they hope will be worth much more to them over time.

The marketing frenzy stems from a 2018 U.S. Supreme Court ruling to precipitate a federal law banning such betting outside of Nevada. Andrew Cuomo, the then governor of New York, decision three years and one pandemic later that the sanctioning of mobile sports betting could help plug a Covid-shaped hole in his state’s finances.

Thanks to a 51 percent tax rate, New York expects to raise $ 500 million a year from online betting by 2025. (Officials tend not to mention how much this implies New Yorkers will lose.)

Like one heading put it this way, online betting has gone from taboo to revenue, encouraged by states desperate to recover their balance sheets. Betting was brought straight to people’s mobile devices, which removed the access barrier to enter a racetrack or a casino.

The court and the pandemic ushered in a golden era of gambling. Online betting income $ 3.3 billion reach in the first 11 months of 2021, according to the American Gaming Association, 624 percent above the comparable period in 2019. However, such figures do not capture the full extent of America’s gambling explosion, nor the economic mood it alleviates. .

Once cautious media companies pile up, with even ESPN owner Disney to convince himself that participating in sports betting will not harm his family-friendly brand. Ari Emanuel, the Hollywood mogul whose Endeavor group $ 1.2 billion splashed on a sports betting platform, enthusiastic after a recent FT conference that “the economy is going to get fairly steep, fairly quickly ”as the sports, media and gambling industries converge.

People are shocked at how much gambling has been going on since Captain Renault stepped in Rick’s Café. But there’s something different about this new golden age of gaming, because it’s part of a much bigger boom in speculative activity.

While the image of a contemporary Caesar flickered off the Nasdaq screen this week, its place has been taken by another ad that places a non-fungal sign, or NFT, on the rags. Nearby, another billboard advertised a Bitcoin investment vehicle. That day, the market value of Nasdaq-listed Tesla fluctuated by a few more percent of $ 1tn.

From sports betting to digital tokens, cryptocurrencies to volatile meme stocks, Americans are being offered more ways than ever to roll the dice on their financial future.

Games and gambling run through all these worlds, fading together as each tries to get a piece of the other’s action: think of GameStop, the original meme stock, set An NFT division, or the NBA coin digital signs of game highlights.

Trading apps gamified to make an impulsive flutter more irresistible invite us to consider ourselves authorities on abstract assets. The eternal hope of making quick money is sweetened by a new story of democratization: we are now all art buyers and currency traders.

We’ve never had so many things to bet on, nor so many mainstream companies that encouraged us to make a point.

History has shown that any increase in speculation is painful for some. Already double addiction hotlines reports an influx of calls from day traders. Regulators’ limited efforts to catch up were greeted with contempt from those who would protect them. (Raise an eyebrow over the new speculation and you look like a finger-wielding defender of a discredited status quo.)

But why are so many willing to place high-risk bets when the odds are stacked against them? Pandemic stimulus packages certainly gave many Americans extra cash, but they could have parked it in a mutual fund account instead.

The explanation may be the fatalistic view that many of markets and the economy have. Opinion polls since the global financial crisis, there has been a growing cynicism about capitalism, especially among younger Americans, many of whom doubt that they will be better off than their parents, or that their employer will provide a fair wage and decent pension.

It fosters a form of financial nihilism that investor and former e-commerce manager Mike Effle dubbed “finihilism.” In an economy too many consider it to be struggling against them, and with markets showing little connection to underlying value, a bet on the play-offs or a sociable sally against AMC’s short-sellers may seem just as good a use of your money than any other.

It is easy to moralize about the rise in speculation. But it is difficult to blame people for wanting to get rich quick when they have lost confidence in their ability to get rich slowly.

andrew.edgecliffe-johnson@ft.com



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