3 Reasons Why P2P Investing Isn’t The Same As Gambling (And Has Nothing to Do With Luck)

When you hear the word ‘gambling’, what comes to mind?

Images of bustling casinos full of slot machines and crowded craps tables?

A bookie on a drizzly Saturday afternoon? Or perhaps scratch cards or playing the lottery are your frames of reference?

Gambling can range from being a little bit of fun, to someone’s only plan for retirement.

Gambling is not investing, but in the financial world, the lines can sometimes be a little blurry.

We want to explain the difference between gambling and P2P investing, and make sure you understand why those two are such different activities.

What do we mean by gambling?

Ultimately, gambling is about luck.

Sure, you might think you know what you are doing when you put a bet on a horse. You might have studied its form and researched all the hot tips. But ultimately, you know that it’s not a sound investment and you’re lucky if you make your money back. When it comes to the crunch, gambling brings with it a whole heap of risk and potential loss.

Everyone knows that poker games and betting on horses is gambling. But in the world of financial investing, the lines between investing and out-and-out gambling are becoming increasingly blurred. In fact, some financial instruments could be classified as gambling.

Here are two examples of gambling that comes disguised as “investing”:

1. Day trading: Sure, day trading might carry connotations of stockbrokers using in-depth knowledge to make shrewd deals. But trying to predict how a stock will perform in the short-term is a gamble, which explains why 80% of day traders lose money.

This is a term you’ll hear in various investment products, but it’s basically where you use borrowed money to invest more and magnify increase your returns. Used wisely, leverage can be good (mortgages, for example). But when it comes to derivatives trading and the stock market, leverage can wipe out your net worth in seconds.

2. Binary trading. Binary trading entails betting on the future price of a stock. There are expiration dates, calls and a lot of graphs involved. Similar to the investment products mentioned above, your returns can be a lot higher, but so can your losses.

You might hear whispers of success stories of people who have used one of these products or strategies. But just like gambling, it doesn’t happen very often and most people lose out.

Let’s look at a type of investment which is not gambling: P2P lending.

3 Reasons why P2P investing is not gambling

The P2P investing industry sometimes gets a bad rap. That’s because some platforms have turned out to be scams, with some investors still waiting on their money. For this reason, we always believe it’s important to be aware of the risks no matter what the investment.

Here are 3 reasons why P2P investing is very different to gambling.

1. Legitimate businesses

P2P companies are real, living, breathing organisations. They have CEOs, marketing teams and customer success representatives. They must abide by the laws of the country they are based in, and meet all the requirements for countries they operate in.

Most P2P platforms aim to be transparent and communicative with investors and none will try to “sell the dream” or offer unrealistic returns.

At Swaper, for example, we publish our monthly investor numbers and throughout the 2020 pandemic we kept all our investors up to date with important information. You’ll always be able to see our cumulative investments and interest paid to investors on our Statistics page.

2. Consistent returns

P2P investing has been around for over 10 years, and it is well documented that investors get consistent and regular returns. Many platforms deposit returns every month, which makes it easy to track and check them.

For example, you can read the hundreds of blogs out there where investors write about their experience with P2P platforms as well as the average returns they get over time.

If you go through the blogs and forums, you’ll see most bloggers reporting above average, consistent returns. That’s unheard of in the binary/day trading and gambling world!

3. Low volatility

Not only are returns consistent, but they are what investments should be: boring.

Returns don’t fluctuate drastically from month to month, and you won’t need to be checking the news every half hour to decide what to do with your investments.

The low volatility means you’ll always be able to sleep at night without having to worry you’ll be losing your entire life savings in a day.

What to look for in P2P investing

Although P2P investing is far from gambling, it doesn’t mean there aren’t any risks.

As mentioned above, some P2P platforms have proven to be scams and investors have lost money. For this reason, we always recommend checking a few things before investing your money into a P2P platform.

Here are a few tips to follow when testing out a new platform.


Head over to the ‘about’ section of the P2P website to learn as much as you can about the founders. What’s their background? Have they got the right credentials and experience?

For example, our CEO at Swaper, Indrek Puolokainen, has over a decade(!) of experience in finance.

Track record

Has the P2P platform got a proven track record? You want to be sure you are investing in a platform that has a successful business model. You’ll want a platform that has been operating for at least three years and has paid out at least €1M.

We’d suggest looking at the ‘statistics’ section of the website. If they aren’t transparent with this information, give them a wide berth.

High liquidity and transparency

The platform must be honest about their investment stats, provide regular updates, and cover all the investor FAQs. Ideally you want to be able to easily liquidate your investment – which means that you have access to a secondary market via the platform to sell whenever you want.


Most P2P platforms offer buyback, which means they will cover you if a borrower defaults on repayments. Buyback helps reduce risk and reduce losses, so you’re better off picking a platform that does offer buyback. At Swaper, we’ll refund both your loan and interest payments, so you don’t risk losing money.

Overall, you’ll want a platform that:


P2P investing is very different to gambling.

Although it’s a relatively new industry, lending money to others and receiving interest is a business model that’s as old as money itself.

Sure, you might not get the crazy highs you’ll get with cryptocurrencies, but you most certainly won’t get the crazy lows either.

And that’s important!

Ready to grow your savings with a real investment product that isn’t gambling?

Join Swaper today.