A new trend is taking the world by storm, sports gambling. Most forms of gambling as well as casinos in general are illegal in all of mainland China. Nearly all forms of gambling have been banned since 1949 with the establishment of the People’s Republic of China. In mainland China, the only sort of legal gambling is the China Welfare Lottery established in 1987 and the China Sports Lottery established in 1994. Both lotteries offer a variety of games which are designed to raise money for social projects. For those looking for the full casino experience, you will have to go to the nearby Macau SAR. Students who travel to one of the various study away locations in the United States however, new forms of online gambling have quickly become a staple for many students looking to earn money quickly.

For over 25 years, sports betting was, with a few exceptions, banned in the United States by the 1992 Professional and Amateur Sports Protection Act. However, in Murphy v. National Collegiate Athletic Association (2018), the Supreme Court ruled that this law violated the Tenth Amendment, which designates which powers are reserved for state governments as opposed to the national government. Sports gambling is now legal in 40 states and territories across the country to varying degrees, including 31 states where online sports betting is legal. It is in these 31 states where giant new online sportsbooks have begun to operate. Big names such as ESPN, Draftkings, and Caesar’s Entertainment all operate their new online betting platforms.

For those who don’t know, a sportsbook is an organization that takes in bets on sports. Upon a successful wager, they pay out winnings based on a certain predetermined rate agreed to by the gambler before placement of the bet. An important thing to keep in mind about sportsbooks is that they are designed in such a way that when you are successful in your wager, the book itself pays out your winnings; in other words when you win a bet, the casino loses. A smart sportsbook will do their best to take in wagers and structure the rates at which it distributes winnings such that they will make a profit no matter the outcome of a given event. However, this is not always possible if too many wagers are placed on one side of an outcome and not the other. This structure incentivises sportsbooks to ban players deemed too successful, and they often do. If too many players profit from the game, the book will eventually run out of money.

Another trendy topic in the sports betting world is prediction markets. Prediction markets, such as Kalshi, are legally dissimilar from sportsbooks in that they are not considered gambling and are therefore not regulated in the same way, meaning prediction markets are able to take wagers on events traditional gambling bodies cannot, such as elections. Prediction markets are structured differently from sportsbooks in that the platform does not operate as a house; they do not set their own odds and rates for successful wagers. Instead, they simply take a portion of all the money placed into the market on what are called event contracts which take the place of a traditional bet in a sportsbook. In order to purchase an event contract, there must be sufficient money placed on the opposite side of the contract. After you purchase shares in said event contract, the market odds adjust in such a way that the payout of someone looking to make the same wager as you would have to pay more for the same return. Whereas in traditional gambling if the player wins the house loses, on prediction markets, if a player wins other players must lose.

How do players make money on these platforms, and what should you do if you too want to do the same? Before getting ready to bet all of your savings on either of these types of sites, accept that even if you play optimally you will most likely still lose money. This is because the overall pool of available winnings on any given platform is smaller than the total pool of wagers placed as a result of the cut the platform takes in the form of transaction fees, so the average return must be smaller than the average payout. Because of this, set responsible betting limits to avoid overspending. Additionally, it is important to record how much money you have won or lost across all of your wagers to avoid losing track of how much money is being spent on these wagers. If you accept the risk that you will most likely lose money, the next step is to always immediately cease placing wagers upon making a profit. Since the expected payout of a given wager is smaller than the wager itself, any time you find yourself to have profited is already better than the expected result, and placing more wagers will likely only serve to decrease your winnings. Adding on, it is good practice to place wagers where you have high information relative to your opponent. This is easier to do on prediction markets where your opponents are other users who may not be playing optimally as opposed to sportsbooks who employ professionals to gather as much information as possible. This allows you to more accurately evaluate the wagers which are being undervalued and avoid careless losses. You should also avoid compound bets called “parlays,” which are wagers on multiple events which only payout if the user is correct on all wagers. These bets entice users with large payouts, but their high risk nature make them unreliable.

There are also other risks involved with gambling besides losing money. According to the National Institute of Health, there is a negative correlation between college students who gamble and academic performance. They also claim young people are also at greater risk than average for problem gambling which in turn can affect one’s finances, personal relationships, and mental wellbeing. That NIH study found that over three quarters of 18-24 year olds who gamble show signs of problematic play, the highest of any age group.

Overall, viewing these platforms as ways of making quick money is almost always a bad idea and should be avoided. Rather, if you are someone who enjoys participating in these types of wagers, simply place small bets every once in a while using money you are sure you will be able to pay for without risking your savings, and always bet responsibly. Most of the time, the most responsible bet you can make is no bet at all.