8 December 2022

What do the World Cup and financial markets have in common? It’s all a game…


A certain footballing event is a reminder, if one were needed, that Britain loves a bet. The Qatar World Cup is set to break all previous gambling records. Flutter – owners of SkyBet, PaddyPower & Betfair among others – expect ₤300 million to pass through their UK & Ireland books during the tournament.

And it’s not just here in the UK. Across the pond, a study by the American Gaming Association (AGA) found that over 20 million Americans will roll up to the World Cup tables with a cool $1.8 billion ready to wager. The liberalisation of US gambling laws is at the heart of it all. AGA Senior Vice President Casey Clark enthusiastically hailed the start of a new era, As the first World Cup with widespread availability of legal sports betting, this will certainly be the most bet-upon soccer event ever in the US With more than half of all American adults having access to legal betting options in their home market, legal sports betting will deepen American fan engagement in the most-watched sporting event in the world.” 

But while the sums changing hands may be reaching record highs, there’s nothing new about gambling – it’s been ingrained in our culture for centuries now. In the Good Old Days, men (and it was overwhelmingly men) would rush straight from work to the smoky bookies, exchange a wad of cash for a little betting slip and wait anxiously for the result. 

Historians have traced our love affair with these games as far back as 3000BC and a set of dice discovered in an Ancient Mesopotamian tomb. Gambling is in our DNA. Financial speculation too. The Amsterdam Stock Exchange was founded in 1611.   

Yet it remains a highly divisive topic. Gambling is seen as a vice, something to be frowned upon. A way for the reckless and feckless to lose money. But those who sneer at the silly gamblers and their adventurous urges may be shocked to learn that gambling isn’t inherently bad. Or that, at the core of modern society, ‘gamblers’ are hiding in plain sight. 

For example, traders and investors are sophisticated gamblers. 

Hundreds of billions are ‘gambled’ every day in financial markets. The epic final frontier of human speculation and competition. Traders, investors and bankers face off against each other in a Darwinian battle between the most-informed participants in the world, all placing their bets on an uncertain future. 

Gambling and trading are more alike than it’s comfortable for many finance professionals to admit. The story goes that investing is based on detailed and sophisticated research and analysis with the hopes of a longer-term pay off while Gambling is purely based on luck and for the purposes of short-term entertainment.

Both endeavours involve taking risks – which is effectively choice under uncertainty. People make decisions based on perceived (bad gambling) or calculated (good gambling) probability and then back those views with money in the hopes of generating a profit or return. What’s the difference? 

Even starting a business is gambling!

Naysayers will claim that investing is far more refined than simplistic gambling, but it’s really just a matter of how seriously you take your bets… 

Betfair co-founder Andrew Black is the perfect example. An immensely devoted gambler, he created his own software to identify mispricing of bookmakers’ odds way before online gambling was even dreamt of. Black was so successful that he quickly ran out of bookies to take the other side of his bets. 

That’s the Betfair origin story: If you won’t make me a market, I’ll build my own exchange”. The creation of Betfair was itself a gamble that almost failed. Ironically, the improbable merger of an undercapitalised, popular betting exchange (Betfair) with an over-capitalised less popular competitor (Flutter) saved both companies and formed the base for the betting behemoth it’s become today. 

Betting on uncertain outcomes is the seed of human progress. Most entrepreneurs fail with their first enterprise. 60% of UK startups fail within the first three years. Yet, many of society’s most transformative innovations were born from risk-takers. These gamblers who bet it all and lost, declared bankruptcy and started again… 

Tech companies like Shopify & Facebook (Meta) over-hired during the pandemic, implicitly betting that the post-Covid era would mean a quantum leap forward in online commerce and relationships. They were wrong. Now they’re cutting staff. Their stock prices have been decimated in 2022. Those bets didn’t pay off. 

Playing the lottery? 

As in business, gambling in life carries risks. Having a punt is available to every adult with a smartphone, fuelling what critics have called a gambling epidemic. It’s not like we need the nudge, although research struggles to establish a causal link between exposure to advertising and the development of problem gambling, it doesn’t take a genius to figure out that the more betting firms are spending on sponsorship and advertising, the more people are gambling.

Take the example from this excellent Bloomberg report on the UK betting industry. Stewart Kenny, the co-founder of Paddy Power left the firm in 2016 because of the collective failure to curb an epidemic of gambling addiction

Kenny said his position on the board had become untenable when, earlier that summer, senior managers shelved a safer gambling campaign it was running in Australia because it had proved too effective and was costing them money. He finished his speech, and later that afternoon he walked out of the building for the last time, never to work in the industry again. 

If it works that well to stop people from gambling, there’s a fair chance the opposite is true as well. 

But arguably the biggest danger is the gamification of gambling. Those 25p games. Fruit machines in the palm of your hand. Spin the Roulette wheel, so close! Try again! Have a free spin on us! We’re just not built to deal with that. 

The National Lottery is ‘played’, yet the odds of winning the game are infinitesimally tiny. Any regulated entities (bookies or retail brokers) offering a game with such low odds of winning would be made to publish a disclaimer in big red letters…


You’ll struggle to find that statistic on their website. Camelot clawed in over £8 billion of bets ticket sales in 2021. Flutter, with all of their household betting brands, generated a comparatively measly £6 billion in the same period. 

Even supposedly sophisticated financial markets aren’t immune to a ludic dopamine rush.

Enter the new ‘innovative’ thing in finance 

Robinhood burst onto the stock market scene during the pandemic. A new broker that promised commission-free trading along with in-app confetti animations to ‘celebrate’ each trade, rewards, trending stocks, and a game-like interface. 

The platform appealed to a bored and hyper-connected young audience that rapidly evolved into an army of day traders. Many had no idea of how the underlying market functioned. The combination of Wall Street Bets subreddit, lockdowns and a broker that gamified markets was undeniably potent. The casino doors were wide open and you didn’t even need to leave your house to play. 

The impact extended far beyond the reach of Robinhood and their band of merry men. Stock prices became memes. Markets were transformed into a giant casino, massively detached from any form of rational, fundamental analysis or valuation. 

The law of attraction is the law of attention

Wherever the collective attention goes, money quickly follows. Wall Street Bets & Robinhood became notorious. People were winning and losing enormous sums. The media amplified these stories of enormous bets and payouts, further fuelling the mania. Just like the big sporting events that everyone wants to bet on, money flowed towards the attention. 

It’s a repeating pattern. If there’s a new trend in financial markets, everyone wants to get involved. Property market boom? Everyone wants to buy houses and become a landlord. If there’s a big rollover on the lottery, everyone wants to buy an extra ticket or two. Mass attention is a money magnet. 

At the heart of this is the gambling urge. We are all gamblers. Most prefer not to call it gambling (probably because of the negative stigma), but we all make implicit bets, across multiple domains, throughout our entire adult lives.   

It’s uncomfortable to admit, but no matter how smart you think your endeavour is, there’s always risk and uncertainty involved. That’s the nature of existence. 

Smart gamblers simply know the conditions that are more likely to generate a positive outcome. Dumb gamblers tend to repeat the same bad bets, remain ignorant of risks, and, unless they’re very lucky, achieve the same negative outcomes. 

And funnily enough, this extends to politics too… If we accept that risk is an ever-present factor in our lives, then doesn’t it make sense to study the successful gamblers in society rather than deride the art of gambling itself? 

Macrodesiac is passionate about helping people understand the complex and ever-evolving world of finance and economics. With a deep understanding of international finance, the team focuses on providing readers with straightforward financial perspectives and analysis.

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David Belle is Founder of Macrodesiac.com.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.