Capitalist Horse Sense: Sports Betting and Option Trading during the English Financial Revolution, 1690–1740

Abstract

The essay explains the rise of horse racing in England around 1700 with reference to the Financial Revolution in the wake of the Glorious Revolution. This period saw a considerable increase in the money supply, without any improved consumption opportunities being opened up to contemporaries. Therefore, the available money was spent on speculative purposes, including option trading in the City of London and horse betting—two commercial activities that were very similar in practice. The essay reconstructs the reciprocal impulses that the two activities gave each other, and analyzes some problematic side effects.