I think by your own definition the headline is warranted in its use of gambling. The act of betting on predictions is in service of “being right” ostensibly. But is really just about the monetary reward. I don’t see betting on predictions serving any other purpose. Other risks in life have other purpose, in which the risk is accepted because of the reward of the other purpose. Gambling is risk without any other sort of side reward or effect.

It depends on the person making the bet. With sophisticated enough brain scanning technology, we could distinguish between "placing the bet to achieve a feeling" vs. "placing the bet because they believe it is mispriced".

It's not possible for a 3rd party to, at a distance, determine why someone placed a bet in a prediction market. At a casino, it is possible. Most of the games are negative EV. So if someone plays any of the games, then it can't be because they are trying to maximize EV, it must be for some other reason (like a feeling).

I guess I’m trying to say that in both cases you outline, the purpose of the act lies solely in the risk itself. Believing something is mispriced simply means the perceived risk is very low (or even negative) but the action is taken _because_ of the risk itself. No other purpose is served. Unlike other monetary instruments which could be consider stores of wealth. or other life decisions which have outside intrinsic values in which the risk is a consideration but not the primary object.

> Believing something is mispriced simply means the perceived risk is very low (or even negative)

That's not what risk means. Risk is the amount you stand to lose, and expected value is the mean outcome (calculated by integrating across all possible outcomes). The EV can be positive or negative, and that corresponds to a mispriced asset. Risk can only go to zero, but it can also be arbitrarily high.

Managing risk is its own thing, but to give an intuition: How much should you bet on repeated fair coin tosses that pay out 3:1, if you have $100? More than 0, because it is positive EV, but definitely not the whole 100. Risk management is about playing vs. not playing and bet sizing.

Gambling is taking on risk without positive EV. A 1:1 cointoss is the quintessential example. EV is 0, you won't make or lose anything in the long run playing this game. But it adds uncertainty, you could have twice as much or nothing. Gambling is risk-seeking, the variance of outcomes has value (to a gambler) on its own.

I agree with this

> If we evolved to be more rational, then the phenomenon probably wouldn't exist.

I strongly disagree here, I think the phenomenon is in fact part and parcel with the evolution of our rationality. Betting (as you accurately describe) is an intrinsic part of life, and rationality (as I understand) is our evolved response to wrangling that uncertainty. It shouldn't be surprising that the evolutionary reward mechanism for acting rational (big oxytocin hit when you predict something correctly) could get miscalibrated for a subset of the population; that's just biology.

I also think you're making a massive error by conflating criticism of betting with criticism of betting markets, though. Nobody is upset about people dealing with the natural risk of day-to-day life; the problem is that people are now being incentivized to take on additional risk (beyond the day-to-day) which they are poorly equipped to reason about. The systems governing the dynamics of geopolitical events (or other things you can estimate in a betting market) are staggeringly complex, and assigning credences to them is an epistemological nightmare that even the most seasoned experts struggled to do reliably. These market brokers are using a framework of rationalism/"wisdom of the crowds" as a cover to sucker non-expert consumers into what truly is gambling in the sense that you describe it. In principle a person could probably lay accurate odds on a horse race too, but the average punter is never doing that and the same is true of the majority of polymarket users.

> Gambling refers to taking on risk for the feeling it brings.

Is there much of a difference when it comes to placing bets on the news?

To play off the article's opening example: investing in mineral exploration in Greenland, with an American invasion opening up opportunities for resource extraction, would be taking a risk with an unknown payout due to imperfect information. That is to say, it is taking a risk to build a business. A business where the payout may exceed what is going in. Betting on the news is just an exchange of money, with the intermediary taking a cut. Risks are being taken, but no value is being created. It is all about emotional involvement.

Investing in a business is also a bet. The capital you provide is a known quantity, you risk it for an uncertain outcome (the future value of the shares).

If your informational edge is just America invading Greenland, let's say you know that for sure. Then you could invest in the business, but you might actually be diluting your edge if you don't know more than the market does about the fundamentals of the business. The business could already have a lot of debt, and unable to get more to finance an expansion into Greenland. It would be less risky in that instance to just bet on the invasion, since that is where your edge is.

> Anytime people criticize betting, it looks to me like some kind of utopian scheme

This is how I feel, too. Life is all about risk management and a life where you take no risk is one where you have nothing. People make bets all the time: areas they move to, people they ask out, jobs they take, what foods they eat, etc. which is clearly different than going to the casino and putting it all on red.

Found the gambler!