Speculation Nation

Americans are natural risk takers. This trait goes back to the country’s founding stock.

Many of our ancestors decided to leave their homelands and set off to the New World.

In search of freedom, land, meat, and prosperity, these pioneers laid the foundation for a bold nation.

As a result, Americans have always excelled in the entrepreneurial arts. We aren’t afraid to take the risk of starting a business. This is surprisingly rare throughout the world. It’s one of the prime reasons our nation is so exceptional.

But today, our risk-taking nature is being taken advantage of.

Gambling EVERYWHERE

You can’t watch sports these days without the inevitable gambling ads. TV hosts offer up their suggested bets and plug the sponsor’s gambling app.

This was absolutely unheard of even 10 years ago. But in 2018, the Supreme Court ruled that sports gambling had been improperly banned by the federal government.

The rest is history. The chart below shows legal sports gambling volume since 2018:

Source: Author

From $4.6 billion in 2018 to $166 billion in 2025! It’s a disturbingly bullish chart. That’s a lot of money being flushed down the drain every year.

According to the largest study of online sports betting, about 96% of people lose money. That’s based on tracking digital payments. Only 4% ever withdrew winnings.

The odds are shockingly bad. And the crazy thing is, even if you do manage to beat the system, the gambling apps will limit your bets to tiny amounts. It’s rigged.

The study also found that lower-income people are hardest hit. They gamble more of their income, and lose more.

Investors are increasingly using “parlay” bets in an attempt to hit it big. You can bet on the outcome of 10+ different events, and depending on their probability, win 100x or more your money. But these parlays almost never hit. And the house makes a lot more money from these bets.

Too many people today view parlays as a retirement plan. There are much better ways to speculate available, like the stock market.

But even parts of the stock market have turned into a casino.

Stocks, Too

Citadel Securities is a firm you may not have heard of. But they handle about 25% of all retail trading in the U.S. Stocks and options.

And their latest data is shocking. In February 2026, 39% of all options volume was on “zero-day” contracts. In other words, options that expire the same day. We call these “ODTE” options. Incredibly risky.

Source: Citadel Securities

This is day trading on steroids. Note how in 2021, 0DTE volume was just 12% of the total.

Many Americans are struggling. Housing is unaffordable, food prices are ridiculous, and the job market is rough. So they’re trying to use 0DTE options to strike it rich.

For the vast majority of traders, this strategy will end in tears.

Prediction Markets – Bet on Anything

And now, the next evolution in gambling. Prediction markets.

The name sounds respectable. Honey, I’m not gambling. I’m predicting.

Same difference.

On sites like Kalshi and Polymarket, you can bet on almost anything.

• Will it rain in New York City today?
• Will Trump say “Dumbocrats” in his speech tonight?
• Will the Fed raise interest rates by 0.25% in October?
• Who will win the UFC fight?

You can even bet on where Taylor Swift’s wedding will take place. New York, or Rhode Island? A few bold bettors say it’ll be in Pennsylvania (3% chance, make 33x your money!).

Source: Kalshi

The suspense is killing me…

Naturally, there is a huge insider trading problem in prediction markets. Someone on Taylor Swift’s team probably knows where the wedding will be. They could bet themselves, but then they might get caught. So they might tip off friends, and share the winnings.

Insider trading is becoming a major problem in prediction markets. We’ve already seen a U.S. soldier get busted for betting on Nicolas Maduro’s removal from power in Venezuela. He won $400,000, but got caught.

Source: DOJ

Of course, there are going to be productive uses of prediction markets. But for most people, it’s really just gambling under a fancier name.

What’s The Solution?

Pandora’s box is open. Gambling has become a big part of our culture and economy.

It’s unlikely to be outlawed or restricted anytime soon. There’s too much money to be made.

But gambling is draining the savings of Americans. And preventing many from investing their money where it should be, in the stock market. Or a small business.

So we should encourage our kids, grandkids, and friends to steer clear of gambling. Many people are developing serious gambling addictions in this new world.

Many have come to see reckless speculation as their only “way out”. This is understandable, but it almost never works.

Sports gambling is not a path to riches. Quite the opposite. And 0DTE options and prediction markets may seem more sophisticated, but the result will be similar for most people.

Instead of making a deposit in the sports book, people should be opening a Roth IRA, or contributing to a 401k. These legal tax shelters offer incredible benefits, and over a long period you will make money with a well-thought out portfolio.

Sports betting was $166 billion last year. Total U.S. investment into 401ks is about $600 billion per annum. And gambling is growing much faster.

Compared to sports gambling, where only 4% win, the choice is clear. Take advantage of the most powerful force in the universe: compounding. And the only way to do that with a high probability is by owning quality stocks.

Be sure to put as much as you can in retirement accounts. Or if you’re already retired, encourage your kids/grandkids to do so. Compounding works best when the government isn’t constantly taking a cut.