Stock Pickers Versus Sports Bettors
Recently a man in North Dakota was found guilty of placing sports bets over the Internet, in violation of state (and possibly federal) law. He was fined a nominal amount of money and made an example to the hundreds of thousands – millions? – of people who use their computers to make wagers on football games. The “casinos” that book the action are located in places like Antigua and Australia, where betting on sports is sanctioned by the government. So, although the bets are not being made on American soil, where it is illegal to wager on sports (except in Nevada), the use of fiber optic lines and cables violates the Wire Act, which prohibits the use of telecommunication devices to transmit betting information. Thus, betting on sports, even in locales where it is legal is, for most Americans, illegal.
Betting on the stock market is not illegal. Indeed, it is a venerated pastime, and those who are good at it are celebrated on magazine covers and given honorary doctorates. What these luminaries do, though, is essentially what good sports bettors do: Find an “undervalued” team and bet on it. The big difference is that the financial markets are exponentially more rigged and “fixed” than any NFL game ever could be, with more attendant chicanery and degeneracy than the average gambler encounters in a lifetime of making wagers. Also, the pointspreads in football games more accurately reflect the true value of a team than stock prices, which, no matter how you turn the balance sheets inside out, often have no resemblance whatsoever to the real “value” of a company. Stocks prices go up and down not because a company is intrinsically worth more or less but because more people are buying into the pyramid scheme that is equity investing. Pointspread odds, on the other hand, go up and down as the public expresses their support for one team or another, accurately pricing a team’s value in the market.
Yet for reasons that are unclear to us – misguided moralism, perhaps? – the average person thinks that those who bet on sports are uncouth and of dubious character. Stock bettors, on the other hand are gallant “investors.” If the law allows people to put their life savings into stocks, whether or not they really have more or better information than the next guy, we ought to allow them to invest in football teams, too.