I saw this going viral: The Three Pillars of the Bro-Economy: Day-trading, sports betting, and crypto are about to get bigger.
The growing popularity of sports betting and crypto gambling is related to the rise of lottery-like systems of wealth. For those who cannot make it in tech or other high-status or high-paying jobs, they are either stuck with low-paying service jobs, hustles (like Uber Eats, Door Dash), or gambling.
Average-IQ people typically cannot become wealthy or attain high social status with meritocratic forms of wealth creation or occupations (e.g. tech jobs, finance, consulting, writing). It’s not like they can ace tech interviews or impress recruiters. Their career options are fairly limited, so the shot at getting rich quick despite the abysmal odds is an alluring one.
Thus, the only options for these people are lottery-like systems of wealth (e.g. podcasts, YouTube, sports betting, entrepreneurship), in which the median return is low or negative, but the average is skewed by huge outliers (e.g. Joe Rogan). You don’t have to be that smart to succeed at YouTube, but you do need connections (or luck by being early at a niche). Meritocratic wealth is the opposite, in which smart people with no connections suddenly make huge incomes at tech jobs just by being so competent instead of lucky. The median is much higher relative to the skew. Instead of having to be early, you only have to show up.
With lottery-like systems of wealth, one is under the illusion that the game is not rigged. Unlike lottery tickets, there is enough complexity in the system or game to create the false illusion of control or skill. Sports betting or crypto speculation tempts the sort of person who is too smart to play the lottery or slots, but is not savvy enough to see they are still being scammed, or that the game is still rigged. They think they have an edge, when the only one with the edge is the house. Sports betting is designed in such a way that the fees and spread erode at any profits. There is no evidence to suggest anyone has an edge at predicting outcomes.
Even if the expected value is positive, such as entrepreneurship, the odds are low enough that it’s often not worthwhile. The positive expected value from entrepreneurship assumes many trials, which although true from a theoretical perspective involving thousands of people, is inapplicable or impractical at an individual level. It’s not like you have unlimited trials, unless you have rich parents, in which case you don’t need to get into business to get rich–that is already done for you.