Today’s guest columnist is Lloyd Danzig, managing partner of Sharp Alpha Advisors.
Recent years have borne witness to the mainstream adoption of sports betting, retail equity trading, cryptocurrency speculation, NFT marketplaces, esports, fractionalized collectibles and niche sports leagues. These consumer behaviors all fulfill a similar psychographic demand for “competitive entertainment,” a term that describes any form of entertainment where winning matters.
While the prospect of financial upside is a motivator for competitive entertainment seekers, it only represents a small piece of the puzzle. Within sports betting, for example, most recreational users do not have a true expectation of long-term profitability. In fact, most don’t even expect to ever make a withdrawal. These users psychologically classify their deposits as entertainment expenses, not as capital investments from which to earn a return.
