I think you can justify preventing people from gambling whilst thinking they're investing even whilst permitting regulated gambling marketed as gambling. Similarly, the government permits the sale of alcohol, but not marketed as medicine.
Vegas seduces with glamour rather than prospectuses filled with seductive, irrelevant statistics and passionate, sincere bullshit about how the team of MIT-educated croupiers, striking design and ambient temperature make the ball more likely to land on 27 than at any other venue.
I think only one of the below needs to be true to suggest investment restrictions might be advisable even in the presence of legal gambling.
(i) "unsophisticated" investors are significantly more likely to put their life savings into RandomStartupX than they are to put them on a roulette wheel
(ii) RandomStartupX is more likely to return zero than a roulette wheel
(even if market returns are positive there's a power law distribution and it's probability of returning zero that's more important to those without a well-constructed portfolio)
(iii) Retail investors' realistic early stage "investment" options' expected value may well actually be lower than that of a spin of a roulette wheel assuming the top startups prefer the experience of top-tier investors, which doesn't seem unreasonable even when comparing between different tiers of VC funds
Vegas seduces with glamour rather than prospectuses filled with seductive, irrelevant statistics and passionate, sincere bullshit about how the team of MIT-educated croupiers, striking design and ambient temperature make the ball more likely to land on 27 than at any other venue.
I think only one of the below needs to be true to suggest investment restrictions might be advisable even in the presence of legal gambling.
(i) "unsophisticated" investors are significantly more likely to put their life savings into RandomStartupX than they are to put them on a roulette wheel (ii) RandomStartupX is more likely to return zero than a roulette wheel (even if market returns are positive there's a power law distribution and it's probability of returning zero that's more important to those without a well-constructed portfolio) (iii) Retail investors' realistic early stage "investment" options' expected value may well actually be lower than that of a spin of a roulette wheel assuming the top startups prefer the experience of top-tier investors, which doesn't seem unreasonable even when comparing between different tiers of VC funds