Athletes can’t bet on sports … why can politicians bet on companies?
Talk about a double standard
In Paramount Pictures’ The Gambler, Jim Bennett (Mark Wahlberg), an English professor and high-stakes gambler, gets himself into pretty bad debt right off the bat.
“Everything on black,” he says.
Of course, the roulette wheel comes up red and our good friend Jim is in a world of hurt. It’s hard not to feel bad for him. He borrows more from a gangster and offers his own life as collateral. He borrows even more from his estranged mother and gets one of his students, a stud basketball player, into the mix by asking him to throw games.
Here’s the trailer:
It’s highly illegal stuff, obviously.
Pete Rose, one of the best players of all time was banned from baseball for betting on games. The man has more hits (4,256) than anyone who’s ever played the game. He’s arguably the best pure hitter of all time and, well, most people agree the punishment fits the crime.
The NBA, which recently reported record revenue, had a scandal of its own not too long ago as Tim Donaghy claimed the league routinely encouraged refs to ring up bogus fouls to manipulate results. Donaghy actually served jail time for pleading guilty to charges stemming from his role in an illicit gambling ring back in 2007.
Again, these are examples of illegal behavior with real consequences.
The Gambler takes things a step further with a player, the most influential part of any game’s outcome, showing how easy it is to impact the result without making it blatantly obvious.
I gave a few examples to support my argument, but, honestly, I don’t think you need me to tell you why people like Tim Donaghy and Pete Rose are dangerous to their respective sports. You’re smart. I mean, the term sportsmanship is defined as, “fair and generous behavior or treatment of others, especially in a sports contest.”
I don’t make the definitions, people.
Here’s another one for you to chew on: conflict of interest.
A conflict of interest occurs when an entity or individual becomes unreliable because of a clash between personal (or self-serving) interests and professional duties or responsibilities.
That’s how Investopedia defines it, at least.
The moral of the two tales I mentioned — those of Mr. Rose and Mr. Donaghy — is the same. You obviously shouldn’t be allowed to bet on a game you can directly control the outcome of. It’s a slap in the face of competition, and what are sports without competition?
If it’s not OK in sports, why is it OK in the stock market?
Know what else commonly offers up the idea of competition as one of its key principles? Exactly … our public equity market. Public companies are constantly — 24 hours and day, seven days a week — tripping over themselves to compete for shareholders. They literally give bigger raises to their shareholders than employees.
But, what if the people tasked with making policies directly impacting public companies and, more importantly, the environment in which those companies operate, could be bought?
Worse yet, what if those policymakers could essentially bet on those same companies by buying shares of the stock?
Oh, wait … they can.
The most recent example catching some attention right now involves Speaker Nancy Pelosi’s husband. He disclosed a sale of 25,000 shares of Nvidia (NVDA) worth up to $5 million just as Congress was set to pass its CHIPS-plus bill.
It’s the most recent instance of someone making a trade armed with information that’s not available to the general public, but it’s nowhere near the only one. It likely won’t be the last, either.
Congress is now considering banning lawmakers from trading individual stocks. Personally, I think it’s a no-brainer. They, considering the type of policy power they possess, definitely shouldn’t be allowed to trade individual stocks.
Maybe ETFs, like media members who cover the market are limited to, but not individual stocks. It’s anti-competitive and, between you and I, politicians should be banned from stock trading.
Disclaimer: I’m a market participant, not an analyst. This is not financial advice.
