When Markets and Gambling Converge

Abstract

While evangelicals' stance toward markets has a rather libertarian tone, there is nary a whiff of libertarianism when it comes to gambling. Evangelicals have been the principal opponents of the lotteries nearly every state has put in place in the past three decades. Evangelicals also have actively opposed other efforts to expand legalized gambling, such as the recent movement to add slot machines to racetracks. The tension, of course, is that markets are not all that easy to differentiate from gambling. Although there are important distinctions, large numbers of investors are, at bottom, betting on uncertain outcomes in much the same way as gamblers who patronize casinos or buy lottery tickets. When we get to day-trading, moreover - that is, traders who rapidly buy and sell stocks, and generally close out all of their positions by the end of the day - we are looking at gambling, pure and simple.

My suggestion that markets look a lot like gambling is not a novel idea. It also is not particularly surprising that evangelical Christians are hostile to gambling, much as their forbears were. Somewhat less clear is why evangelicals so fervently defend free markets. To understand the longstanding link between evangelicals and market-based economics, it is necessary to begin by briefly exploring attitudes toward gambling and the market economy in the early years of the Republic. After exploring the sometimes complicated early perspectives - gambling was generally condemned, but lotteries were used to finance churches and other institutions - the essay argues that evangelicals have been more willing to "renegotiate" their stance toward market developments (such as futures contracts) than toward traditional forms of gambling. The essay argues that evangelicals have sometimes expected too much from the law - from legal intervention - when it comes to racetrack slots and Internet gambling, and too little in the world that gave us Enron and WorldCom. The common theme is the question of what can - and can't - the law do well.