Vegas seduces with glamour rather than prospectuses filled with seductive, irrelevant statistics and passionate, sincere bullshit about how the team of MIT-educated croupiers, striking design and ambient temperature make the ball more likely to land on 27 than at any other venue.

I think only one of the below needs to be true to suggest investment restrictions might be advisable even in the presence of legal gambling.

(i) "unsophisticated" investors are significantly more likely to put their life savings into RandomStartupX than they are to put them on a roulette wheel (ii) RandomStartupX is more likely to return zero than a roulette wheel (even if market returns are positive there's a power law distribution and it's probability of returning zero that's more important to those without a well-constructed portfolio) (iii) Retail investors' realistic early stage "investment" options' expected value may well actually be lower than that of a spin of a roulette wheel assuming the top startups prefer the experience of top-tier investors, which doesn't seem unreasonable even when comparing between different tiers of VC funds

But are they _really_ designed to protect the financially unsophisticated from themselves? These regulations were enacted in response to the great depression. The motivation was to protect SOCIETY from systemic problems rooted in the actions of unsophisticated investors, not to protect the investors from themselves.

I agree that rules designed to protect the stupid from their own stupidity are to be avoided at all costs, but I don't agree that this is an example of such a policy. And I certainly don't buy the idea that people should be able to do whatever the fuck they want, to hell with everyone else, so long as they are not directly causing physical harm or property loss to another person.

You can't do that with business investments -- there's no way to mandate a particular minimum return to investors, and no way to recover lost funds if the business fails to perform as promised. If I promise you safe 15% returns, and then I run the business in a high risk way and it goes under, there isn't any way for the state to really regulate that level of risk and return except in very highly regulated industries like insurance where money is being invested in rated securities (and even then, it's not great.)

The biggest problem with private investments is that there generally isn't any liquid market to provide a "real" price. It's just whatever the company can convince an investor to pay. Nobody can short or sell you their shares easily, and if you buy in it can be impossible to sell out.

I don't see the lottery as analogous to putting money into companies. Whether the lottery is good or not is a separate issue.