I think betting needs to work like credit cards. When you get a credit card the bank does a risk assessment to evaluate your line of credit and you won't be able to spend over that limit.
Well, sports betting could have the same mechanism, where you are only allowed to bet an amount proportional to your line of credit.
If the banks don't trust you to spend over that limit and honour your debt, why should betting houses be any different?
The problem is that the incentives are exactly reversed. Banks limit your credit because they don't want to lose their money. Sports betting/casinos/etc want you to place bigger bets because they want you to lose your money.
It's the same for casinos. If you buy $50k of chips, lose them to someone else in poker and they redeem them. If your $50k purchases bounces the casino loses money.
Wait whose money do you think is in the bank? Banks are funded by depositors' money and they absolutely play fast and loose with it when not regulated.
That is not true at all. Banks are not funded by depositors money. Banks create money when they make loans, and destroy money when loans are repaid. Deposits in current accounts are liabilities from the bank’s point of view.
Yes, deposits in current accounts are *liabilities* from a bank's point of view. This may seem counterintuitive, as we typically think of deposits as the bank's money. However, in accounting terms, a liability is something a business owes to others.
### The Bank Owes You Your Money
When you deposit money into a current account, you are essentially lending that money to the bank. The bank has an obligation to return these funds to you whenever you demand them, whether by withdrawing cash from an ATM, writing a check, or making an electronic payment. This obligation to repay the depositor is what makes the deposit a liability for the bank.
### How it Works on a Bank's Balance Sheet
A bank's financial health is represented by its balance sheet, which must always balance. The basic accounting equation is:
$$Assets = Liabilities + Equity$$
Here's a simplified breakdown of how your deposit fits in:
* *Liabilities:* Your current account deposit is recorded on the liability side of the bank's balance sheet. It represents a debt the bank owes to you. Other liabilities for a bank include savings account deposits, certificates of deposit (CDs), and money borrowed from other financial institutions.
* *Assets:* When you deposit cash, the bank's cash holdings (an asset) increase. The bank then uses the funds from your deposit to generate income by making loans to other customers or by investing in securities. These loans and investments are considered assets for the bank because they represent money that is owed to the bank.
*In essence, the bank takes on a liability (your deposit) and creates an asset (a loan or investment).* The bank's profit comes from the difference between the interest it earns on its assets (e.g., the interest rate on a loan) and the interest it pays on its liabilities (e.g., the interest paid on a savings account, though current accounts often have very low or no interest).
Therefore, from the bank's perspective, the money you have in your current account is not its own money but rather a debt it must be prepared to repay at any time.
The conversation is credit cards, in which case you are absolutely paying with the bank's money, and if you don't pay it back (particularly if you can't and declare bankruptcy), they lose their money.
No. Don't make it different per person. Make it a blanket "maximum." Sure, one could just have multiple apps or accounts with multiple companies... Either way would be hard to regulate.
If we truly believe that sports betting (at this scale, at our fingertips on our phones, unlimited) is bad... trying to band-aid it won't work.
Well, sports betting could have the same mechanism, where you are only allowed to bet an amount proportional to your line of credit.
If the banks don't trust you to spend over that limit and honour your debt, why should betting houses be any different?