One of the most overused words in new stories is ‘quietly,’ as in the following context: ‘Mark Cuban Quietly Nukes National Anthem From Mavericks Home Games.’ The word generally represents an effort to perform some journalistic jujitsu, by taking a story’s weakness (the news is actually old) and turning it into a strength (the subject appears to have something to hide).
But in the case of the resurgence of American gambling, I think the word is accurate. The growing legalization and acceptance of gambling has indeed happened ‘quietly’ in the sense that a controversial-seeming sea change has occurred entirely without a national conversation.
Sure, there is some disagreement here and there. For instance, tone-deaf New York City mayoral candidate Andrew Yang’s proposal to build a casino on Governors Island generated its fair share of local scorn. And Robinhood’s blatant ‘gamification’ of investing has drawn the ire of Massachusetts regulators.
But on the whole, it’s a bit startling to consider the open arms with which the body politic have greeted the legalization and normalization of gambling. As Slate’s Henry Grabar writes:
Since [May 2018] more than two dozen states and the District of Columbia have approved sports bets [and] cities like Niagara Falls; Bethlehem, Pennsylvania; Detroit; Springfield, Massachusetts; St. Louis; Cincinnati; Cleveland; and New Orleans have approved downtown casinos with varying success…It’s a little hard to fathom just how great a reversal this represents from a half-century ago. In 1964, there was just one state lottery. In the 1970s, going to a casino likely meant taking a trip to exotic Las Vegas; today, most Americans live within an hour or two of a legal craps table. Revenue from tribal gaming, most of which was permitted by a 1987 Supreme Court decision, grew from $212 million in 1988 to $35 billion today. And all that without mentioning the internet!
Clearly we can see the same urge in capital markets as well. Our paradigmatic example, of course, is the absurdly on-the-nose gamification of GameStop – a derelict video game retailer whose shares have managed to provide far more entertainment than its products.
What’s going on here? Grabar cites a recent piece in n+1, which views the trend in markets as a reasonable reaction to a K-shaped recovery:
The modern recession, by rule and by design, is a massive upward redistributor of wealth…50 million Americans lost jobs or wages, 40 percent skipped meals, 400,000 died. It should come as no surprise that within that same year corporate profits shattered records… [T]his happened because the market, an exceptionally efficient mover of money upwards, and once again underwritten by a lavish federal bailout package, went up.A bunch of kids, many deeply in debt or unemployed, with a parasitic smartphone app and a $1200 check, weren’t going to stop that massive transfer of wealth already underway. But why not take up those very same financial instruments and join in?
It’s worth noting that for the author, Alexander Sammon, this explanation fits within a leftist framework that is unlikely to be shared by many financial advisors:
The real heist was not GameStop… It was, rather, that all stocks went up, and hustled trillions of dollars to higher income brackets in the process. It’s hard to make sense of what it actually means to operate in a system where all the rules are rigged toward one outcome, internally and externally, where every move that’s made is guaranteed to somehow generate profit for Wall Street that redounds to the ultra-wealthy, underwritten by the federal government without scrutiny or any real debate.
But the idea that gambling ‘reveals’ something about capitalism is not new. Ole Bjerg, in a fantastic 2011 book called Poker: The Parody of Capitalism, writes:
[T]he game is a parody of the way capitalism and especially contemporary financial capitalism functions. On the one hand, poker models the fundamental mechanisms of capitalism, and on the other, the game demonstrates that these mechanisms are not guided by efficiency, rationality, or even justice in any absolute sense of the words.
The point is that by taking some elements of capitalism and removing them from the emotional context in which they are typically considered, poker allows us to see the system around us – the water in which we as fish swim – more clearly:
In poker, the functioning of the allegedly free market is caricatured in all its fallibility without the fantasmatic veil of ideology attempting to gloss over the absurdity…The financial markets allegedly optimize the productive capacity of society, and even if individual speculators amass amounts of wealth unproportional to the income of those people who produce actual value, this is easily compensated by the net value gained by the optimization of production generated by their financial transactions. As agents in the financial markets increase the total size of the societal “pie,” it is regarded as only fair that they receive also a bigger share of the pie themselves. It is a system where everyone can win at the same time.Poker offers similar possibilities for amassing wealth through sheer circulation of value. Yet… poker does not present itself as a game of winners only… Contrary to capitalism, there is in poker a general agreement that the object of the game is “without exception, to bankrupt the bastard across the table.”
That is, while both poker and financial markets reward some mixture of skill and luck, it is widely argued that transactions in the financial markets somehow provide benefits to all of society; because of this, someone winning a tremendous amount of money is viewed as ‘just’ in the capitalistic context, whereas in poker the same event has no moral valence.
Interestingly, Bjerg views compulsive gambling as the result of the gambler coming ‘too close to money, leaving him in a pathological state of being out of joint with capitalism.’
Is this what has happened to American society? Has a greater comfort with actions, decisions, and even lifetimes devoted to the making of money left us desperate to get closer to the source?
Mainstream religion is on the ebb, which not only clears away one of the most common sources of gambling prohibitions, but also weakens an emotional support systems that has protected psyches from the vacillations of capitalism. The materialistic world is taking up a greater share of Americans’ thoughts, and playing a more powerful role in steering our emotions.
Should it be surprising, then, that discussions of money have apparently become more common?
And all of this is happening while leisure time is on the rise.
As Americans spend less time at work while thinking about money more, do you really think that gambling will become less popular?