> If the state used that argument, it wouldnt be able to run lotteries

Lotteries are transparently run by the state as negative-sum games.

I fail to see how that makes it any better.

> I fail to see how that makes it any better

Lotteries are not run, nor marketed, as investments. Some people mistakenly think of them as such. They predictably lose money.

Because of private lotteries' histories with fraud, almost every modern nation has the state run (or heavily regulate) lotteries.

So a company has to claim it loses money to be absolved of any moral burden?

IF only the SEC accepted that.

> So a company has to claim it loses money to be absolved of any moral burden?

State and federal governments aren't private companies.

I think you're missing his point. Those very entities have agencies which are both "protecting" the public by imposing regulations that prevent them from expenditures with negative expected value, and at the same time peddle them.

Imagine if there were a state-run cigarette producing public benefit corporations alongside public health departments. You'd have two agencies, one cultivating and the other discouraging the same toxic habit at great public expense. We already have this with various OTB/gaming commissions and gambling addiction services. It's an insane conflict of interest to waste tax dollars on.

Also corn subsidies vs. obesity-related healthcare; free roads & parking vs. smog controls; loose monetary policy vs. financial bailouts; having everyone prepare their own tax returns (as opposed to the IRS just sending out a bill along with their calculations) vs. spending money prosecuting tax evaders; and CIA-financed terrorists using our own weapons against our military.

When you think about it, most of humanity's problems come from "fixes" put forth by some other branch of humanity. Humans are not particularly logical or inclined to see the big picture; they are very good at feeling a pain point acutely and slapping a band aid over it. Over time, this becomes rather absurd, but in the meantime the complexity lets societies that act like this grow bigger populations and amass bigger armies, and so that's all you see today.

Most historical peoples were quite happy to live as hunter gatherers, except that larger & more miserable societies had a knack for enslaving & eradicating them.

> Those very entities have agencies which are both "protecting" the public by imposing regulations that prevent them from expenditures with negative expected value, and at the same time peddle them.

Those two things aren't necessarily in logical contradiction.

There will always be demand for gambling and get-rich-quick schemes. Maybe it's better that the state monopolizes and regulates it (and makes it clear that this is not an investment), rather than letting private entrepreneurs take advantage of that same habit in even more effective and unscrupulous ways.

The state is not a particularly efficient entity, so perhaps letting it do evil in a bumbling and clumsy manner is the least overall evil.

This is a compelling argument, i.e., that regulated promotion is part of the long game toward protection against toxic behaviors. Probably the most notorious example would be supervised injection sites. The devil in the details is to what extent do you impose costs on the public majority that isn't afflicted with the problem, and accounting for all of the externalities, not just those produced by a commissioned "study". It's one thing to implement a progressive tax to claw back some of the advantages wealthy people reap from regulation. We can read those numbers on a balance sheet. Quite another to actually build the betting parlor or injection site, which invariably lands in the lower to middle class communities. Who's really paying the higher costs here in broad terms of value and quality of life impact?

A lottery is marketed as a game in which one spends a small sum of money in the hope of winning a large sum, not as a place to park ones savings in the expectation of increasing their value over time. And still likely offers a less negative ROI than unregulated securities offerings to retail investors.

You can't "punish people by letting them hang their own rope" when they don't actually get hung, because they're still around afterwards but now a burden. They now have to rely (more) on the social safety net, or turn to crime, or just sit around all poor and broken being unpleasant to look at.

A society that has decided to take on, at least partially, the burden of individual failure is incentivised to try to prevent it.

If you were to propose some sort of "unaccredited investors get to invest in risky markets if they agree to be put on a boat and cast out to sea if they fail" then I could see myself accepting that.

So what happens when irresponsible investors plunge the country back into another great depression? How are you going to prevent the mistakes of others from causing a financial collapse which causes me to get laid off, through no fault of my own?

You overestimate the cost of speculative gambles, but let me ask a the opposite: if the regulation costs you your job and an economic recession who is going to compensate you for it? Because as far as i know the government has never given a check to compensate for its mistakes.

So much wrong with everything you said. First, the cost of speculative gambles is economic collapse. Such gambles were a root cause of the Great Depression. Second, how exactly is regulating investment going to cost anybody their job? Think it through. Maintaining the current state of regulation will have an effect now because ... ? It doesn’t make sense. Third, and this is by far the dumbest thing you said, of course the big bad gummint picks up the tab when people lose their jobs, it’s called unemployment! How fortunate you are to live with all of this evil regulation that you can be coddled into thinking that you know better than the generations that came before and put in place these institutions and norms. Libertarianism is a first world disease of entitlement that is only enabled by the stability and prosperity that effective government creates. It’d be so ironic so as to be funny if it weren’t so sad.

> First, the cost of speculative gambles is economic collapse. Such gambles were a root cause of the Great Depression

A man has earnt a nobel prize of economics by detailing how the federal reserve's money supply policy was the most noticeable trigger of the 1930's economic collapse. But even if you disagreed with that, speculation is definitely not what caused the great depression.

- The popular fear of engrossing and forestalling [types of speculative activity outlawed in England] may be compared to the popular terrors and suspicions of witchcraft. The unfortunate wretches accused of this latter crime were not more innocent of the misfortunes imputed to them than those who have been accused of the former -

> Second, how exactly is regulating investment going to cost anybody their job? Think it through

By restricting investment it lowers wage growth and employment. The rate of investment is maybe the best predictor of productivity increases and wage growth.

> Third, and this is by far the dumbest thing you said, of course the big bad gummint picks up the tab when people lose their jobs, it’s called unemployment!

Unemployment benefits are paid by the population, not by the government. Government is unable to compensate for its mistakes, because government owns nothing at all. Taxes are the ultimate ninja loan.

> How fortunate you are to live with all of this evil regulation that you can be coddled into thinking that you know better than the generations that came before and put in place these institutions and norms.

What is unfortunate is to disagree with it and still being obligated to follow it. If you find those kind of regulations upon the action of individuals beneficial, then the only thing you have to do is allow the Libertarians you so despise not follow them, and harm themselves. AFter that you will be able to enjoy your cautious riches and laugh at them, while not incurring any loss and having relative advantages.

Well I hear Somalia is great this time of year and they have very little regulation of oversight to speak of, perhaps you’d feel more liberty there? Or if that’s too warm of a climate for you, there are portions of Antarctica that are accessible most of the year. And I don’t despise libertarians, at all. I used to identify very strongly with both the political party and the philosophy. And then I grew up.

"You overestimate the cost of speculative gambles"

No, I remember my history.

"if the regulation costs you your job"

What regulation? The regulation saying that you can't screw people over? I wouldn't find myself in that job to start with.

"Because as far as i know the government has never given a check to compensate for its mistakes."

Not true in the least. Retraining programs to help people get into other industries have been all over. It's just the deficit hawk Republicans who tend to cut them.

> What regulation? The regulation saying that you can't screw people over? I wouldn't find myself in that job to start with.

For example, city regulations in San Francisco has made it very expensive and difficult to build. Hence, the rent of everyone that lives in the city is much higher than it would have been because of city regulations. When will I, an SF resident, get my compensation for the cost of regulation?

The government's mistakes are like spilled milk. They can only replace the milk spilled by taking it from someone else, and they drink the milk on the way to deliver it.

> Who wants to invest in cryptokitties when the other startup has actuall revenue and sales

If you look at historical investment patterns, it's often the big startups with no revenue and no sales that raise the most money. It's almost a disadvantage to have revenue, unless it's growing meteorically.

State lotteries are unethical for many of the same reasons why accredited investor requirements exist.

It's a lot easier to fix though: make minimum ticket prices higher. At $20 or $100 each, there is more sticker-shock friction to prevent overspending on lottery tickets.

You should also cap the max jackpots. The multi-hundred-million jackpots generate a bit of a mania.

Also, if you wanted to disincentivize lotteries, but not ban them outright, you could start taxing them - up front, not the behind-the-scenes cut states get now. Add a 50% tax on lotto tickets and a 50% surtax on winnings and most people will be too disgusted to play.

From what I see of gambling behavior, I'm not convinced that at $20 ticket price would help the people who are most likely to lose money they can't afford in the lottery.

It would make a fine business out of black market lottery ticket selling.