If it is based on chance, then it is gambling.

Until the Commodity Futures Modernization Act of 2000, Collateral Debt Obligations were regulated differently in different states. Some said it was insurance, and thus regulated it like insurance. Some said it was gambling and banned it outright. Instead, regulation was handed to a toothless new agency who got little funding for enforcement and the rest of the world got the 2008 financial crisis.

https://en.wikipedia.org/wiki/Commodity_Futures_Modernizatio...

> If it is based on chance, then it is gambling.

Is there much difference between picking a horse at the track or a stock on an exchange?

Lots of countries have managed to legally define gambling and ban it without making stock trading illegal. Even the US. This isn't some gotcha.

That would require a functioning legislative branch that could pass laws. However a major political program of the past decades has been to gum up Congress and prevent its functioning. There's very limited bandwidth to accomplish legislation, and there's hundreds of good fixes that can't fit through, so I doubt the US will be able to fix this anytime soon, unless there's bigger scandal.

This would make sense if Congress never passed laws. They can and routinely do. That they don't limit their behavior is unsurprising.

The passage of some laws is completely consistent with my description of a dysfunctional system that can not get many good reforms through.

Getting some bills passed does not equate to adequate legislative capacity.