Will this highly dubious legal loophole allow you to open a casino anywhere? The new “stock market casino” app proposal will amaze you.

by worstplans.com

Background:

  1. In most regions of the world, gambling is regulated by government bodies.
  2. Unrelatedly, one of the criticisms of the stock market (especially the derivatives market) is that many participants use it exactly like a casino.

Proposal:

In regions where gambling is prohibited, but access to a stock market exists, a stock trading app could be designed that is a thinly-disguised casino.

Instead of playing the slots in a traditional casino, participants in this “stock casino” could spin a wheel to buy random stocks or mysterious financial instruments (Figure 1).

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Fig. 1: A user interface mock-up for the proposed “STOCKASINO” app. Note the “PURCHASE RANDOM ‘HOT’ STOCK” button.

Normally, a person who is day-trading stocks might need to wait for weeks in order to realize a substantial profit (or loss). Fortunately, this process can be hastened using leverage, which will allow gains and losses to be multiplied. A user will be able to win big—or lose it all!—on just a 1% price movement of a stock, if they use enough leverage. In this way, a user can win or lose within hours, rather than needing to wait for weeks.

Gamification:

As a secondary bonus feature, we can “gamify” the stock-buying experience in order to encourage more trading activity (i.e. more profit for the operator of the app).

Specifically, we will use the “in-game achievement” system (AKA “badges” or “trophies”) in which users are awarded special app “badges” for particularly noteworthy or dangerous trading-related activities (Figure 2). This could encourage users to make a lot more trades than they otherwise would (and risk a lot more of their savings).

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Fig. 2: The app might be able to entice normally-cautious “investors” (we’ll call them that) into dangerous trades by awarding trophies to particularly terrible ideas. My personal favorite is the “QUICK CLIK” badge above (in purple), which is awarded to an investor who purchases a stock within 60 seconds of it first being available.

One complication of this “stock casino” system is that stock markets have limited hours, but we really want to keep the app operational 24 hours a day. A developer would probably need to include stock exchanges in other time zones as well, which increases up-front development complexity.

Conclusion:

Just to be safe, anyone developing this app should do it in close collaboration with (and in the territory of) a nation that does not extradite.

PROS: Great way for a developer to make a profit while promoting financial irresponsibility.

CONS: Probably not a great idea to base your business and future not-being-in-prison status on a highly theoretical “loophole” that may not even exist.