Derivatives - The sophisticated satta market

Had my first class of financial derivatives (FD for short) today. The prof went gaga over how they are instruments for hedging risks as well as their random use for speculation. We were introduced to the various forms of derivatives in the forms of forwards, futures, options and swaps with the introduction session focussed on the first two.

Now we know that futures are exchange traded and have cash settlement as opposed to the forward contracts which are OTC and have physical settlement. But these forwards can be cash settled too if the contract is so made. This means I can enter and speculate on the price of a commodity, the volatility of the stock index, stocks etc. legally to enter into forward contracts with a third party.

So how different is it if I would like to extend the same to the success of India in the T20 world cup or the number of wickets taken, the probable score to be made and so on. Why is it called a satta then? Is it not the form of a futures contract in which I decide the underlying, the price, the mode of delivery as well as the payment date?

Why is speculating on stocks allowed and this termed illegal? And the argument of gambling doesn't hold as that is exactly what you do in stock trading. The future price of the stock is not actually related to the exercise price, it is just a value derived from the current price to which certain risk premiums have been adjusted and in no way reflects the spot price of the day.

So isn't this whole derivative crap a slightly sophisticated gamble??? Let's see what happens in the future classes and whether my doubts are dispelled.....