Price is a function of distribution, and gambling is the channel through which distribution is achieved.

Written by Lauris

Compiled by Saoirse, Foresight News

For centuries, gambling has been viewed as a negative-sum game. The house always wins, extracting value from both sides of every bet. From national lotteries to Las Vegas casinos, gambling has become a tax on hope, a tool for transferring wealth from the many to the few.

But what if this view isn't comprehensive? Look around: people are flocking to the Zora content coin market, diving into the hype in small-cap cryptocurrencies, or blindly following any trending investment narrative. At their core, these actions are all speculation. And speculation is just gambling in a new package.

From this perspective, gambling is more than just entertainment. It can be understood as a fundamental coordination mechanism: a way to pool risk, attention, and capital toward a common outcome. What once seemed like futile games of chance are now revealing themselves as distributional and cultural engines.

The Homology of Finance and Gambling

At its core, gambling is a simplified market. A bet is ultimately a contingent claim:

Mathematically, this is identical to options or futures contracts: both trade present certainty for future uncertainty. What finance calls "speculation" is even more directly reflected in gambling. Both are mechanisms for pricing uncertainty.

The task now is to redesign this structure into a positive-sum model where liquidity, participants, and creators can grow together through interaction.

The differences are linguistic and cultural, not structural, as Keynes, Schumpeter, and Galbraith would have agreed.

(Note: Keynes, Schumpeter, and Galbraith were all extremely influential economists in the 20th century. Their theories have had a profound impact on modern economics, financial markets, and even social policies.)

Casino bet: Bet $1 on red and receive $2 if the result matches.

Call option: Pay a $1 premium and receive $2 in profit if the exercise conditions are met.

Casino bets and call options are no different: both trade present certainty for future uncertainty, and both rely on market makers to provide liquidity. The only difference is the packaging. In a marble-columned arena, it's called gambling; on an Etherscan page, it's called finance. The real mistake is pretending they are two different things, when they are actually one and the same.

The cognitive misunderstanding in modern society is to artificially separate the two.

From negative sum to positive sum

The root cause of traditional gambling's negative-sum nature lies in its "commission" mechanism. If 10 players each bet $100, and the casino takes a 10% house edge, the total redistributed wealth is only $900. This system dooms players to long-term losses:

formal:

For most games:

However, in an on-chain environment, when gambling scenarios can interact with spot markets, the “dealer” no longer needs to profit through exploitation.

It can act as a liquidity router or market-making mechanism. Every bet becomes a buy order, adding liquidity to long-tail assets, tokens, and even structured positions in credit and prediction markets.

The bookmakers no longer extract value from players, but instead flow funds back into the ecosystem itself, transforming speculation into liquidity and distribution power.

A simplified positive-sum model is as follows:

Ecosystem expected value = the sum of all players’ expected value + routing expected value

(The expected value of routing represents the liquidity value created by the banker's capital flow)

In this structure, commissions no longer consume value, but instead create it. Speculation itself becomes a mechanism for injecting liquidity, allocating assets, and deepening the market.

Culture and the coordination multiplier effect

Gambling is particularly well-suited to the transition to a positive-sum model, not only because of its spectacle but also because of its role as a distribution channel. Price is a function of distribution, and gambling enables large-scale distribution. Every bet triggers a chain reaction: tokens are purchased, liquidity is injected, and attention is focused.

Streaming and communities amplify this dynamic. Streamers transform risk into entertainment, communities transform betting into a ritual of belonging, and protocols capture this energy and transform it into capital flows.

When these loops are tokenized, each bet becomes more than just a transfer of value—it creates distribution. Tokens issued through gambling can instantly accumulate holders, increase liquidity depth, and gain narrative appeal. What once limited itself to a single spin on a slot machine can now create a sense of market presence.

Unlike traditional casinos, profits are no longer limited by the bets themselves, but are multiplied through network spillovers. Here, speculation becomes a dual channel for liquidity and distribution. Gambling is no longer a moral hazard, but a fundamental mechanism for capital formation.

Formal model of positive-sum gambling

Let W be the total amount of bets and r be the commission rate. The agreement income is:

In traditional casinos, R is extractive; in this model, R is used for liquidity operations to deepen the market and expand distribution.

The net value of the ecosystem is:

Among them, the routing expected value represents the liquidity and distribution value created by the dealer's capital flow.

Since W itself grows with distribution and cultural diffusion, we get a recursive flywheel:

Price is a function of distribution, and gambling, in this case, is the engine that creates distribution.

As stakes continue to accumulate, liquidity deepens, tokens circulate, and cultural energy amplifies the cycle.

Normalized Steering and G Multiplier

If this is true, then the future of gambling has nothing to do with casinos. It's about entertainment as a market force. People's love for entertainment is paramount, and large-scale entertainment can drive market change.

The Apple Store case proves this point: the largest portion of mobile revenue is speculative activities disguised as games.

Gamified trading experiences and hyper-gambling extend this logic to the financial sector. Just as embedded finance transformed consumer financial technology, embedded speculation will also transform retail transactions. Gambling is no longer a fringe vice, but has become the most powerful distribution channel in the market.