How to make money on a falling stock exchange

Selling short. Sounds innocuous, doesn't it? The Scotsman explains how to sell shares that you don't actually have:

TAKE this example. A trader makes a contract to sell 100,000 shares of HBOS at Tuesday's closing price of 480.25p, with a view to buying them back at a lower price at a later date. The amount he stands to receive from the sale is £480,250. He then circulates rumours about the health of the company in a bid to drive down the price. In today's scary conditions – particularly in the wake of the collapse of US investment bank Bear Stearns – even the barest rumours without any supporting evidence can come to be believed. The price then falls – in the case of HBOS yesterday – to 398p. The trader then buys 100,000 shares at this price, for an outlay of £398,000. His profit is therefore £480,250 (the proceeds of sale) minus £398,000 (his purchase cost), which equals £82,250.
Short-selling – making money from shares whose value is falling – is legal in the stock market. What is a criminal offence is spreading rumours in a bid to drive down the price.

The stock exchange is different from a giant casino. Isn't it?