From: Robin Hanson (rhanson@gmu.edu)
Date: Wed Aug 27 2003 - 08:34:26 MDT
On 8/27/2003 Robert Bradbury wrote:
> > If it smells to an ordinary person like morally-repugnant gambling,
> > then it's illegal. Welcome to democracy.
>
>Hmmmm... but then how do we "get away" with futures markets and
>other forms of derivatives.
>
>Looks to me like there is some "bias" against games where it
>is agreed that the "public" *will* lose some fraction of the
>time (e.g. gambling on slot machines, roulette, etc.), but
>not where there may be some more sophisticated strategies
>involved (e.g. what the yields will be on wheat, corn or
>pork bellies).
The general situation is that everything that looks like gambling is
illegal, expect that certain areas have been carved out as exceptions
for certain purposes. These include stocks, commodity futures and
insurance, each allowed in order to enable certain sorts of risk
hedging. The regulators for these exceptions are on the lookout
for people trying to slip ordinary gambling under their label.
Robin Hanson rhanson@gmu.edu http://hanson.gmu.edu
Assistant Professor of Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323
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