How Is Sports Betting Like Trading? Part 1

It’s easy to talk about what sports betting has in common with other forms of gambling, like online casino games.  But what you don’t hear as much about is what sports betting has in common with trading, which most people recognise as a legitimate way to make a living.  Even trading tends to be viewed across a scale, however, maybe because of the types of people that different forms of trading tends to attract.  For some reason, many people perceive of binary options and Forex trading as a form of gambling, but stock trading as a real profession. 

The truth is that the spectrum is actually determined by the trader and not by the type of trading.  You can gamble at stocks, just as you can gamble at binary options.  You can trade binary options responsibly, just as you can trade stocks responsibly.

You might be thinking, “But sports betting is always a form of gambling.  It’s in the name, sports betting.”

That is a valid point, but the same point could be made about trading stocks as well, even though we don’t call stock trading “stock betting.”  We could just as well, because that is essentially what you are doing.  When you trade stocks, you are betting that your stock will perform well.  You have no way to know for sure.  You are simply going off of the evidence that you have and your analysis of it. 

There may be fewer flukes involved in the day-to-day business of stock trading than there is in the world of sports betting, but I would argue that this isn’t the real reason why stock trading has such a different reputation than sports betting or even other forms of trading.  I think the reason is plain and simple: stock trading has long been inaccessible to the average person thanks to high fees and an elitist culture. 

But I think analysis is where the delineation between irresponsible gambling and serious business really becomes clear in all of these fields. 

The word “gamble” is defined in a couple of different ways.  It may mean, “To play a game of chance for money,” or “to take a risk in the hopes that you will achieve a certain result.”

Chance is involved in all situations where you risk money in the hopes that you are right and will win more.  That’s one thing that sports betting has in common with trading.  Both are investments where you may win and may lose.  Both are gambles.

The other thing they have in common though is that spectrum.  Just as there is a spectrum of traders, there is a spectrum of sports betters.  You reduce the “gamble” aspect and the associated risk when you reduce the “chance” element.  And the way to do that in both cases is through careful analysis. 

At their core, trading and sports betting are two closely related and overlapping fields.  They both require you to have deep and up-to-date knowledge in order to succeed.  The knowledge you need differs greatly between the two, but the approach if you want to win is very similar.  In How is Sports Betting Like Trading? Part 2, I will talk about some of the more specific similarities and links between these two worlds.