The Tell: The New York Stock Exchange president says the stock market is not a casino. Here’s what academic research says.

United States

With the wild moves in the stocks of GameStop GME, +2.54% and AMC Entertainment AMC, -0.36%, or last week in cannabis makers, it’s not illogical that some think of the stock market as a casino, a description recently used by Sen. Elizabeth Warren, the Massachusetts Democrat.

In an interview with Axios that was aired on HBO, Stacey Cunningham, the president of the New York Stock Exchange, a unit of the Intercontinental Exchange ICE, -0.21%, said she rejected that comparison.

“The markets are not a casino. They are highly regulated and they’re highly overseen. … We are running a market that provides opportunities for investors to come in, invest in the companies they believe in, they believe that are gonna grow, and then share in that wealth creation.”

Casinos, it should be pointed out, also are highly regulated and overseen, though unlike the stock market there are no long-term positions that can be built in, say, a game of blackjack.

Academic research suggests stock-market trading and more traditional gambling have quite a bit in common. One paper published in January says there’s 3.5 times more gambling in stock markets than in more traditional venues like casinos and lotteries.

The paper — from Alok Kumar of the University of Miami, Houng Nguyen of the University of Danang, and Talis Putnins at the University of Technology Sydney and Stockholm School of Economics — says the U.S. and Hong Kong have the highest per capita levels of what they call stock-market gambling in the world. They identify so-called lottery stocks by looking at volume divided by market cap, and looking for unusually large ratios.

That’s not to say all stock market investing is gambling. The researchers say about 15% of stock market volume in the U.S. is associated with gambling, a percentage that runs as high as 30% in the stock markets of China and Thailand.