The Online Gambling Economy
How Stock Market Apps create gamification to drive addiction
How Markets Exploit Our Impulses
In the UK, Boxing Day (26th December) is traditionally a day where many males converge at sports events. But there is a new looming place of convergence, online gambling platforms. In fact there is a surge in online gambling worldwide. The Lancet medical journal's commission on gambling has cautioned that betting represents a global public health threat. According to its panel of experts, gambling is linked to domestic violence, other forms of crime, and job losses. And online gambling is not just for sports fans!
Gambling on the Stock Markets
Modern stock market participation is not the careful craft of patient capital, it is the kinetic frenzy of unrelenting churn. What was once a disciplined pursuit of growth has been re-engineered into a casino cloaked in algorithms, where winners are celebrated but losers are buried in silence. Today’s stock market is a system optimized not for innovation or stewardship, but for human frailty, designed to exploit our most basic impulses and sell them back to us as progress.
Trading as an Engine of Obsession
The essence of modern speculative trading lies in its seductive design. Apps and Platforms do not just facilitate transactions, they architect addiction. Confetti explosions on our screens celebrate trades. Push notifications nudge users with whimsies of opportunity and fear. Gamified leaderboards transform sober financial decisions into contests of bravado. It is no accident that trading apps mimic the mechanics of slot machines, the same intermittent reinforcement that keeps gamblers at the table ensures traders keep tapping their screens. Behind the veneer of empowerment lies a carefully calibrated system, built to foster dependence, not discipline.
Hidden Costs
Speculation isn’t an accident of the market, it is its engine. But speculation has shifted from a calculated risk to a compulsive behavior, accelerated by platforms that prioritize engagement over efficacy. The “faster, louder, now” ethos undermines the measured patience that investing once demanded. What users call opportunity, these platforms call churn, a euphemism for frictionless profit extracted from compulsive engagement. The short-term gains often obscure the long-term erosion of wealth, stability, and trust.
The ripple effects are profound. Communities of day traders, often fueled by the delusion of their unique insight, foster a culture where overconfidence is mistaken for strategy. Losses are rationalized. Wins are paraded. Reflection is abandoned. In this environment, the line between investor and gambler becomes not just blurred, but irrelevant.
The Moral Failure of Markets
Outside forces perpetually exert their influence upon us, shaping our decisions and dictating our responses, often without our awareness. This dynamic is especially pronounced in financial markets, where algorithms and external pressures seamlessly blend into what we perceive as independent choices.
Markets are tools, but tools can be corrupted by design. When speculation overtakes stewardship, the long-term consequences ripple far beyond the financial. Prioritizing short-term gains transforms markets from engines of societal advancement into mechanisms of extraction. This shift undermines the collective trust necessary for economies to function and exacerbates systemic inequalities, leaving the most vulnerable to shoulder the fallout of financial instability.
The most profound insight in a recent WSJ article, More Men Are Addicted to the ‘Crack Cocaine’ of the Stock Market, is that markets do not operate in isolation, they reflect the priorities of those who shape them. And today’s markets increasingly prioritize speed over substance, volatility over value. If unchecked, this prioritization doesn’t just harm individuals, it compromises the ethical foundation of the economy. According to the WSJ article:
“Doctors and counselors say they are seeing more cases of compulsive gambling in financial markets, or an uncontrollable urge to bet. They expect the problem to worsen. The stock market has climbed 23% this year and bitcoin recently topped $100,000 for the first time, tempting many people to pile into speculative trades. Wall Street keeps introducing newer and riskier ways to play the market through stock options or complex exchange-traded products that use borrowed money and compound the risk for investors.”
Against all Odds
Moreover, the ethical failure lies in the dehumanization embedded in market mechanisms. People become data points, behaviors are manipulated not for their benefit but to maximize engagement. The pursuit of ever-higher returns fosters a culture where decisions prioritize shareholder profits at the expense of broader societal needs. The societal consequences are profound. Communities suffer when capital is siphoned into speculative bubbles rather than invested in productive ventures that create jobs or address critical challenges. Public confidence erodes when markets appear rigged to benefit a few at the expense of the many, deepening divides and fueling resentment. Markets, as they currently operate, risk hollowing out the social contract, turning capitalism into a zero-sum game rather than a shared pursuit of progress.
If unchecked, this prioritization doesn’t just harm individuals; it compromises the ethical foundation of the economy, making it imperative to rethink the role of markets in fostering a more inclusive and sustainable future.
Resisting the Pull of the Quick Fix
If there is a path forward, it is one of resistance, not against markets themselves, but against their worst tendencies. The solution is stark in its simplicity yet formidable in its execution, patience, diversification, and careful analysis. Strategies demand more than discipline, they demand a shift in mindset. To invest wisely is to reject the lure of instant gratification and instead embrace the slow, deliberate accrual of value. Strategies like dollar-cost averaging or building diversified portfolios are not just technical fixes, they are acts of defiance against a system designed to provoke impulsivity. The facts are, these Apps, promoted on sports team shirts and billboards at sports grounds, spend billions of dollars targeting young people, mostly single young men, with gambling.
It is not only the stock market. In the UK, where online betting has long been legal, a government commission last year found that 1.3 million people may be suffering from problem gambling. Online betting has boomed globally in recent years, and experts fear problem gambling is soaring, in Columbia the online gambling industry, which is growing exponentially, is now generating as much revenue as the country’s biggest company.
A Warning and a Choice
This is not a neutral moment. As the WSJ article shows, “Gamblers Anonymous meetings are filling up with people hooked on trading and betting. Apps make it as easy as ordering takeout.” The stock market and gambling world is at a crossroads, and the decisions we make, as individuals, as investors, as a society, will shape its trajectory. The unchecked momentum of platforms exploiting impulsivity threatens to hollow out the pockets of millions of people.
Finance is not a game, but it is being played. To act otherwise is to misunderstand its stakes. It takes long hard work to build something tangible, there are no get rich quick schemes.
Stay curious and as rational as possible!
Colin
Image Created with Google Gemini (Imagen)
As a matter of principle I've never invested in shares, or traded, because one is supporting a system where the people who work in the company don't own it, and those who own it don't work in it - (senior management share-holdings excepted) - thereby setting up an eternal conflict of interest between 'workers' and 'owners'; ie: I am in basic disagreement with the Capitalist system. However the irony is my pension comes from such investments. :)
As an alternative, I invest in bricks & mortar, land, and wood-working equipment so I can make stuff.
This highly relevant topic has touched most of us, even if it hasn’t necessarily led to addiction for everyone. As someone who now invests 98% of my portfolio in index funds, I can reflect on my journey and how I’ve observed this phenomenon evolve. I used to invest in individual stocks for a few years, but I realized it wasn’t for me—it demanded too much of my time and mental energy. Shifting to a long-term, passive investment approach remains among my best decisions in the last two decades. That said, I don’t believe there’s a single cause for the growing addiction to trading and gambling-like behaviors in today’s markets. Below are my observations, some of which overlap with the points made in this post, while others expand on them:
1. The Desire to Get Rich Quickly: The aspiration to achieve wealth has always existed, but today’s trading apps amplify it to an unprecedented degree. These platforms, designed with gamified elements—real-time alerts, confetti animations for trades, and seamless one-click purchasing—encourage impulsive behavior similar to Amazon one-click buying. When the stock market trends upward, as it has for much of 2023 and 2024, it becomes even more tempting to chase quick gains. Watching your portfolio grow rapidly during these bull runs feeds into the belief that wealth creation can and should be immediate.
2. The Influence of Social Media and Unqualified Financial Advice: A Wall Street Journal article noted that many Gen Z investors get financial advice from social media influencers, most of whom lack formal financial education or expertise. These influencers often glamorize stock picking over index funds or ETFs, further fueling the culture of speculation. For many young investors, following this advice becomes a social activity, leading to risky behaviors without fully understanding the consequences.
3. Index Funds - Boring but Effective: Investing in index funds or ETFs is often seen as “boring” because it doesn’t provide the same excitement as discussing a hot stock pick. Nobody brags about their slow-and-steady index fund strategy at social gatherings, but buying and boasting about stocks like Nvidia can make you feel like part of an exclusive club. This social dynamic makes it harder for people to stick to disciplined, long-term investing.
4. FOMO and the Thrill of Meme Stocks: Fear of Missing Out (FOMO) plays a massive role. Meme stocks and speculative trading create a sense of excitement and community, keeping people glued to markets. This addictive cycle becomes even more pronounced during periods of market growth, such as the second half of 2020, all of 2021, and again in 2023 and 2024. For many, it feels like the market only goes up, and even when it dips, it recovers quickly. This perception reinforces the illusion that trading is a foolproof way to make money.
5. The Financial Industry’s Incentives: The industry has a massive financial incentive to encourage frequent trading. High trading volumes generate profits for brokers through spreads, fees, and even practices like front-running orders. The media also plays a role by constantly hyping stocks, technologies like AI, and other speculative trends, creating a narrative of winners and losers that drives impulsive decision-making. Predicting outcomes in a complex market is nearly impossible, but the media capitalizes on the illusion that it can be done.
6. ETFs vs. Mutual Funds: I’ve written before about how ETFs, while a good financial innovation (https://klementoninvesting.substack.com/p/why-retail-traders-underperform/comment/80884118), can inadvertently encourage overtrading. Unlike mutual funds, which settle at the end of the day and thus give investors time to reflect, ETFs can be traded in real-time, like stocks. This flexibility makes it harder for investors to avoid emotional reactions to market fluctuations. The constant temptation to buy or sell based on short-term trends undermines the long-term discipline that mutual funds implicitly encourage.
7. The Perfect Lives on Social Media: Social media often portrays a distorted reality where everyone seems to succeed effortlessly. Spending too much time in these spaces can lead to feelings of inadequacy and impatience. The slow, steady approach of saving and investing over 30-35 years doesn’t feel glamorous compared to the instant gratification promised by speculative trading, betting on sports, or even buying lottery tickets.
8. A Lack of Financial Education: Schools and colleges rarely teach personal finance or investing, leaving most people unprepared for the realities of building wealth. Without this foundational knowledge, many begin their careers without understanding that financial independence is a marathon, not a sprint. This knowledge gap makes people more vulnerable to the allure of quick wins in the market.
9. Selective Storytelling by “Successful” Investors: Most investors on platforms like CNBC or social media only discuss their successes, conveniently leaving out their losses. This creates a skewed perception, leading others to believe that picking a few winning stocks is all it takes to achieve financial freedom. Identifying those winners consistently is incredibly difficult, but these challenges are rarely acknowledged in public discussions.
10. Historical Parallels: Addiction to the Noise: This addiction to real-time market updates and trading is not new. Robert Greene captures this perfectly in his quote about the 1929 Wall Street crash, where the sound of the ticker tape became a physical addiction for many. Today, the ticker tape has been replaced by the constant pings of notifications and the “always-on” news cycle. This instant access to information creates a sense of urgency and impatience that spills over into other aspects of life, eroding attention spans and increasing impulsivity.
All these factors—some more prominent than others—contribute to the growing addiction to trading and speculative markets. None of this is new, but today's tools and platforms have amplified these tendencies to a scale we haven’t seen before. As your post highlights, this addiction is not just an individual issue but a systemic one with profound societal consequences.
The full Greene quote:
“Ticker tape fever. During the run-up to the 1929 crash on Wall Street, many people had become addicted to playing the stock market, and this addiction had a physical component—the sound of the ticker tape that electronically registered each change in a stock’s price. Hearing that clicking noise indicated something was happening; somebody was trading and making a fortune. Many felt drawn to the sound, which felt like the heartbeat of Wall Street. We no longer have the ticker tape. Instead, many of us have become addicted to the minute-by-minute news cycle, to “what’s trending,” to the Twitter feed, often accompanied by a ping that has its narcotic effects. We feel connected to the flow of life, events as they change in real-time, and other people following the same instant reports. This need to know instantly has a built-in momentum. Once we expect to have some bit of news quickly, we can never go back to the slower pace of just a year ago. We feel the need for more information more quickly. Such impatience tends to spill over into other aspects of life—driving, reading a book, or following a film. Our attention span decreases, as does our tolerance for any obstacles in our path.”