Advanced Gamblenomics: A brief guide to why the ASX 200 sucks – Fat Tail Daily

The other night I won a meat tray at the pub.

You know the drill.

Buy a few beers, grab a raffle ticket, and hope your number comes up.

As an Australian-American, I’ve been ruminating on the various drawbacks of both countries.

And their various cultural quirks.

It got me thinking about how true blue the meat tray event was…

Only in Australia do you gamble with alcohol for the chance to win food.

That’s our approach to risk in a nutshell.

And it’s a metaphor for the malaise at the heart of our economy and our top index, the ASX 200.

We keep telling ourselves, ‘She’ll be right’…right up until the kegs run dry because the diesel shipment didn’t arrive, and no one invested in boring stuff like fuel security.

Don’t get me wrong, Aussies love risk.

Sports that the rest of the world thinks are barbaric, we stormed the beaches of Gallipoli too.

But when it comes to money, we just relentlessly deploy it in all the wrong places.

Take gambling.

Fresh data suggests Australians now torch (at a minimum) over $31 billion a year on gambling across pokies, betting, lotteries and casinos.

That’s roughly the annual profits of ALL the Big Four banks, cycled through TAB terminals, phone‑in multis and late‑night spins.

On a per‑adult basis, we’re the world champions of losing money this way — around ~$1,600 a head per year in the early 2020s, and rising.

We’ve basically nationalised the punt.

Which brings us to the government.

In Victoria, the minister responsible for communications and gambling policy had to fend off questions about meetings and dinners with wagering bosses and media powerbrokers.

Of course, insisting there’s nothing improper in how closely government and gambling interests sit together at the table.

Source: X

Of course not.

Just another quiet night at the Melbourne restaurant Society.

(By the way, fantastic venue, do recommend)

Now contrast this with America.

The legal US sports betting market is still relatively young.

Estimates put Australian sports betting revenue alone at around US$2.2–2.4 billion a year by the mid‑2020s.

But the broader gambling losses here, above $30 billion, dwarf the US-regulated sports‑betting market once you strip out Vegas casinos and illegal bookies.

In other words, as a country, we pour an extraordinary amount of what I’d call “punting capital” into sports books and pokies.

In the US, a much larger share of that speculative itch gets scratched in the stock market.

They’ll punt on software, chips, space tech, biotech and whatever the latest index‑tracking ETF is.

Meanwhile, we’ll punt on same‑game multis, greyhounds on a Tuesday, and which code can advertise the hardest during a family TV broadcast.

Now look at the scoreboard.

Over the 10 years to mid‑2024, the ASX 200 delivered total returns of roughly ~7.8% per year.

The S&P 500 over similar stretches cranked out more than ~10% a year on average since the 1950s, and by some metrics, even after inflation.

That gap compounds brutally over time.

It’s one big reason your US‑tilted portfolio has probably done the heavy lifting while your Aussie large‑cap exposure mostly clips dividends and treads water.

As a result, I’m coining a new
term: “Gamblenomics”

It’s my riff on the term “freakenomics”.

And it explains a big part of this.

America channels its national speculation habit into capital markets that fund world‑leading growth companies.

Australia channels a huge chunk of its risk budget into zero‑sum games where the house and the tax office always win.

But there’s another structural drag on why the ASX 200 sucks as a growth engine.

The superannuation industry turns
the market into a bureaucracy

Australian super funds now own roughly a third to almost 40% of the local market by value, depending on how you count listed equities.

That’s a colossal, compulsory buying power under the ASX 200.

If you sit on the board of an ASX 200 company, you’re not an entrepreneur.

You’re a highly paid bureaucrat employed to make sure nothing too interesting happens that might spook the super funds.

Your job is simple: keep the dividends flowing, keep the buybacks ticking over, avoid scandal, host the investor day — repeat.

When a monolithic superannuation complex effectively underwrites your share price, the rational move is to take the lowest‑risk decisions possible in exchange for ongoing capital access and index inclusion.

As a result, innovation becomes someone else’s mandate.

This is why I have naturally gravitated towards the small end of the market through my services, Australian Small-Cap Investigator and Fat Tail Micro-Caps.

People take risks at that end of the market.

Meanwhile, the same mum‑and‑dad investors whose retirement savings are locked into that system scratch their speculative itch on the weekend via the Sportsbet app.

In essence, we’ve socialised our investment capital into a dull, index‑hugging bureaucracy.

And we’ve privatised our risk‑taking into a high‑odds, high‑friction, wealth‑destroying gambling machine.

No wonder the benchmark index looks like it’s stuck in first gear compared to the S&P 500.

So what do you do if you
can see the problem?

You can’t exactly opt out of super. Or if you do, it’s not very straightforward.

But what you do can redirect your personal “punting capital” towards assets that actually build something.

Call it the antidote to Australia’s gamblenomics.

So here’s a proposition…

If you’re drawn to the kind of early‑stage, off‑Wall‑Street opportunities that Americans instinctively back with venture cash and Robinhood accounts,

James Altucher’s Investment Network Australia is built for exactly that niche, it’s a great way to plug into bold, asymmetric ideas without flying to Silicon Valley.

You can keep feeding the meat‑tray economy.

Or you can start treating your risk capital as what it truly is, capital, not a raffle ticket.

Have a good rest of your week.