Revisiting the gambling license: A consumer-centered approach to responsibility and risk taking 

In some ways gambling and trading have similar consumer protection frameworks, the Government regulates the operators, but it’s up to consumers to educate themselves about risks, randomness and negative outcomes. As gambling and financial risk-taking increasingly morph together, it may be time to revisit a provocative idea first advanced more than two decades ago: a gambling license. 

The original modest proposal 

The concept originates with the late Dr. Bill Eadington, a pioneering gambling economist at the University of Nevada, Reno and a longtime board member of the National and Nevada Councils on Problem Gambling. In a 2003 paper on the social costs of gambling, Eadington proposed a system under which “individuals who wished to wager more than some minimal amount would need to register and receive a gambling license.”  

In a 2012 article, Dr. Kahlil Philander and Dr. Doug Walker summarized the concept. “The rationale was straightforward. Because a disproportionate share of gambling-related social costs is attributable to a relatively small number of high-risk players, a licensing regime could function as a targeted harm-reduction mechanism.”   

Lessons from financial services licensing 

The financial services sector has its own consumer protection mechanisms. In derivatives and futures markets, individuals who sell or advise on complex financial products must demonstrate baseline competency through licensing exams administered by the National Futures Association (NFA) and FINRA. The Series Three exam, for example, tests knowledge of market mechanics, product risk, customer protections and regulatory compliance. The goal is not to eliminate risk-taking, but to ensure participants understand what they are doing and the rules governing the activity. 

While these exams are designed for professionals, the logic is increasingly relevant to gambling-adjacent markets. In prediction markets and certain trading platforms, users functionally act as traders, assuming financial risk in environments that mirror wagering. Yet there is no comparable requirement that they demonstrate even minimal understanding of probability, volatility or loss exposure. 

An updated modest proposal 

I suggest combining Eadington’s idea of an individual gambling license with the qualification process required of individuals in financial services, to create a license (or permit, certification or even certificate) for individuals who choose to participate in highly risky trading and gambling activities. Such a modernized gambling license could provide benefits across the financial risk-taking and gambling ecosystem.  

At a minimum, it could ensure that consumers possess critical baseline knowledge before participating – covering topics such as randomness, house edge, loss-chasing and bankroll management. Completion could be facilitated by accredited third parties, creating competitive opportunities for NGOs and educational providers to deliver low-cost, accessible online programs.  

From an operational standpoint, licensed players could more easily track spending across operators, verticals and even jurisdictions. Regulators and operators would benefit from improved KYC and AML processes by interacting with “known” players. Integration into existing player-tracking and responsible gambling monitoring systems would be technically feasible.  

Implementation details would be critical. Licenses could be digital or physical; systems could be voluntary or mandatory. In a voluntary model, players and traders with a license might receive higher default limits or streamlined onboarding, reflecting their demonstrated understanding and potentially lower-risk profile. Data privacy and security would, of course, require rigorous safeguards. 

This is not a finished blueprint, but a concept paper. As the lines between gambling and trading further blur, we have to develop new and better ways to educate and protect consumers. Licensing signals that an activity is serious, regulated and worthy of informed participation.