The Zicklin School of Business hosted a webinar on Nov. 11 about sports betting and the blurred lines between gambling and financial speculation.
Larry Zicklin led the discussion with John Holden, associate professor of business law and ethics at the Kelley School of Business, and Marc Edelman, professor of law at the Zicklin School of Business Department of Law.
They discussed the implications of a time when “anyone can bet on nearly everything.”
“So, they [sports betters] want close to an equal amount of money coming on each side. And that’s how they manage their risk,” Holden said.
“So, they [sports betters] want close to an equal amount of money coming on each side. And that’s how they manage their risk,” Holden said.
He compared bets to stocks, and just like stockholders, sports betters can see how much money is in and how much they are willing to lose.
Prediction markets, which are fairly new to the sports betting world, are contracts in a “yes” or “no” form.
The first to offer a sports contract nationwide was crypto.com, Sportico reported.
However, while sports betting is not illegal in every state, it is a form of social enjoyment, but some have tried turning it into a financial gain.
“What’s very concerning to me is the way I’m beginning to see some of the prediction markets being marketed to the public, which is not as an activity for social enjoyment, but as another means of financial investment,” Edelman said.
Some view the prediction markets like how one may view owning stocks, however, a stock gives one ownership in a company, while the sports betting market is based on an outcome of one specific event.
“The only clear winner is going to be the company that’s operating the prediction market itself that keeps a percentage of it,” Edelman said.
“So that’s fundamentally different from the notion of investing in stocks for the long term.”
Americans have legally bet nearly $150 billion on sports in 2024, which gave the sports betting industry $13.78 billion in revenue, the American Gaming Association reported.
Fans are not the only ones betting — so do athletes. In August, Cleveland Guardians pitchers Luis Ortiz and Emmanuel Clase were on non-disciplinary paid leave due to a gambling investigation, ESPN reported.
“And so you’re just destroying a lot of the arguments that people make in support of allowing sports betting if you allow these wagers that are susceptible to corruption,” Edelman said.
