[Week 29 of 2026] Bets and Brakes

Welcome back to Price and Prejudice with a few musings from Week 29 of 2026

Betting on the Bright Side

This article reports that Americans are on track to lose about $250 billion gambling in 2026, a record, up roughly 67% since 2019 and about 8% in the past year alone. This is apparently faster than at any point in the two decades before the pandemic. According to the article, much of growth traces back to the 2018 Supreme Court decision in Murphy v. NCAA, which struck down the federal ban on sports betting and let 39 states plus DC legalize it. $250 billion is probably a lower bound on gambling losses, since it excludes the money running through crypto, prediction markets, and zero-day options.

It's a pretty grim story, so what are some bright sides if any? One argument could be that gambling is a consumption good, so the losses are not really losses but the price of the entertainment. Read that way, "Americans lost $250 billion gambling" isn't so different from "Americans spent $250 billion on something they wanted," and revealed preference says they wanted it. So maybe a lot of people are simply a little happier. Another argument could be that some betting produces information: a prediction market on an election aggregates scattered beliefs into a single price that is public information, which is genuinely useful. But a Thursday-night parlay on the Knicks tells the world nothing, so this covers a thin slice of the total.

The problem with the consumption story is that entertainment doesn't usually leave a mark on your balance sheet. There is also some research showing that debt delinquency rose as states legalized sports betting, concentrated among men under 40. Unfortunately, revealed preference is a clean argument right up until the product is engineered to be hard to put down, and that seems exactly to be the case with gambling.

Retail Republic

This WSJ article reports that South Korea's top financial regulator, the Financial Services Commission, just unveiled a set of curbs on single-stock leveraged ETFs. It will suspend new listings, ban firms from advertising or marketing them, and triple the minimum cash deposit for a new position to 30 million won, about $20,000. The goal is to cool speculative trading in a market that has been swinging hard as retail investors borrow to chase AI names. It's worth adding that Korea already makes you pass a knowledge test before it lets you buy these things.

Korea runs one of the most retail-dominated equity markets in the world, where individuals make up an outsized share of daily volume. A 2x or 3x ETF on a single stock is about as pure a lottery ticket as the market sells, and the product took off precisely because the appetite was already there. Given this big appetite, the real question is whether a $20,000 deposit and a quiz screen out small investors far more than they inconvenience larger whales, and speculative demand has a way of migrating to whatever wrapper is still open. But at least in Korea the regulators are attentive and swift, which does not seem to be the case in the US.

Podcasts

• This conversation with David Risher (CEO of Lyft) is a good example of someone who is genuinely excited about both his business and the future of his industry. Worth a listen.