The FUTURE of Gambling
I know it has been awhile since I have updated but I can never find a time where I am bored and can't think of anything to do. But today I will write on a topic that I was introduced to last semester. ..
As many of you know, Congress effectively banned online gambling in October by attaching the the law to the Port Security Bill. I did not like this because I enjoy playing online poker and online bingo as of late. I personally don't think the law is going to be around that long because its stupid. The United States casinos were lobbying for the bill since they couldn't compete with these online casinos and were losing business to them. There are many solutions to this problem and I don't think that banning it is one of them. You could either let American casinos operate their own online sites in order to compete fairly. If the United States legalized online gambling they then could start taxing that revenue which is something they couldn't do before. This was probably another big reason they banned it.
In my Investments class last semester my professor showed us this site called TradeSports.com which lets you take out "Futures Contracts" on certain events happening. This is basically the same thing as betting because I can take out a "contract" that the Packers will beat the Bears by at least 7 points or what have you. I can buy this contract if I think it is going to happen or sell this contract to somebody else if I don't think it will happen. Lets say I think it will happen and I pay 52 cents for 1 contract. If it does happen then I get a dollar which is basically a profit of 48 cents. Depending on what the "market" thinks is going to happen will effect the price of this contract. So maybe if the Packers take an early lead the value of this contract will go up because it looks like it will be more likely. Notice that when the value increases from lets say 52 cents to 60 cents...this contract becomes less profitable to buy since you will make less on it. However since I bought it for 52 cents...I could now sell my contract before the game was even over and make an 8 cent profit. Futures contracts are good for the market because they allow individual, institutions, and companies to diversify their risk. I could keep going on these contracts but I stop, I hope you kind of get the picture though.
Since these contracts are used to allocate risk to willing parties...whats the difference on taking out a contract on the price of gold or a contract on how much snow will fall in Central Park this year. There are also contracts for when they will catch or kill Osma Bin Laden. The most interesting contracts are for who will win elections in our government. When people have to put their money where their mouth is they will use all available information to make the best decision on who will win an election race. So really when you look at the price of the contracts for lets say....Hillary Clinton running for president, you are seeing what the market thinks the probability of her running and winning is for president. In my opinion this information is more accurate than any exit polls or other statistical process. So even if you yourself don't want to buy/sell these contracts you can use this information to help you prepare for the future.
So if Congress is trying to ban online gambling...then you would think this is a form of online gambling as well. But it is a form that the market needs to diversify its risk. So they can't get rid of it but its basically another avenue for casinos to take if they want to get online gambling go again. You could just take a "futures contract" out on the the ball landing on #36 or an odd number. I didn't really research much to see if that website listed above is legal in the United States or not...but I am assuming that it is. If you are interested in this then I encourage you to go to the site and find out more about it.
As many of you know, Congress effectively banned online gambling in October by attaching the the law to the Port Security Bill. I did not like this because I enjoy playing online poker and online bingo as of late. I personally don't think the law is going to be around that long because its stupid. The United States casinos were lobbying for the bill since they couldn't compete with these online casinos and were losing business to them. There are many solutions to this problem and I don't think that banning it is one of them. You could either let American casinos operate their own online sites in order to compete fairly. If the United States legalized online gambling they then could start taxing that revenue which is something they couldn't do before. This was probably another big reason they banned it.
In my Investments class last semester my professor showed us this site called TradeSports.com which lets you take out "Futures Contracts" on certain events happening. This is basically the same thing as betting because I can take out a "contract" that the Packers will beat the Bears by at least 7 points or what have you. I can buy this contract if I think it is going to happen or sell this contract to somebody else if I don't think it will happen. Lets say I think it will happen and I pay 52 cents for 1 contract. If it does happen then I get a dollar which is basically a profit of 48 cents. Depending on what the "market" thinks is going to happen will effect the price of this contract. So maybe if the Packers take an early lead the value of this contract will go up because it looks like it will be more likely. Notice that when the value increases from lets say 52 cents to 60 cents...this contract becomes less profitable to buy since you will make less on it. However since I bought it for 52 cents...I could now sell my contract before the game was even over and make an 8 cent profit. Futures contracts are good for the market because they allow individual, institutions, and companies to diversify their risk. I could keep going on these contracts but I stop, I hope you kind of get the picture though.
Since these contracts are used to allocate risk to willing parties...whats the difference on taking out a contract on the price of gold or a contract on how much snow will fall in Central Park this year. There are also contracts for when they will catch or kill Osma Bin Laden. The most interesting contracts are for who will win elections in our government. When people have to put their money where their mouth is they will use all available information to make the best decision on who will win an election race. So really when you look at the price of the contracts for lets say....Hillary Clinton running for president, you are seeing what the market thinks the probability of her running and winning is for president. In my opinion this information is more accurate than any exit polls or other statistical process. So even if you yourself don't want to buy/sell these contracts you can use this information to help you prepare for the future.
So if Congress is trying to ban online gambling...then you would think this is a form of online gambling as well. But it is a form that the market needs to diversify its risk. So they can't get rid of it but its basically another avenue for casinos to take if they want to get online gambling go again. You could just take a "futures contract" out on the the ball landing on #36 or an odd number. I didn't really research much to see if that website listed above is legal in the United States or not...but I am assuming that it is. If you are interested in this then I encourage you to go to the site and find out more about it.
posted by Vitamin Funk @ 3:01 PM
0 Comments:
Post a Comment
<< Home