Morning Brew Daily - Casinos Losing Millions in Minutes & Tech Titans Hit Capitol Hill

Episode Date: September 14, 2023

Episode 147: Neal and Toby chat about the big hack that hit Las Vegas casinos causing millions of loss revenue for multiple days. Then, the Monday Night Letdown for the NY Jets has sparked the debate of whether the NFL should invest in grass fields instead of astroturf to protect their players and the game. Plus, a momentous meeting in Congress between lawmakers and tech leaders to talk about AI and the standards to be set moving forward. Next, Neal's shares his favorite numbers of the week, a cruise ship is stuck in Greenland, and the pickleball merger that could help the sport rake in big dollars. Listen Here: https://link.chtbl.com/MBD Watch Here: https://www.youtube.com/@MorningBrewDailyShow Excited about entrepreneurship? Check out our other podcast, Founder’s Journal: https://link.chtbl.com/founders Learn more about your ad choices. Visit megaphone.fm/adchoices

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pwc.com slash US slash brew AI. That's pwc.com slash us slash brewAI. Good morning brew daily show. I'm Neil Freiman. And I'm Toby Howell. On today's pod, how Aaron Rogers's injury has renewed a debate over turf fields in the NFL. Then Las Vegas is getting crippled by a major cyber attack and it doesn't look like Danny Ocean is behind this one. It's Thursday, September 14th.

Let's ride. Okay, before we get into the show, wild scenes in Mexico's Congress, this week. In a room that's typically used for boring budget talks and policy presentations, a journalist unveiled two mummified specimens that he claims were aliens. He claims these two mummies, each with three-fingered hands, had been buried in a remote area of Peru, were about a thousand years old, and were, quote, non-human beings who were not part of our terrestrial evolution. So the pictures of these mummies went absolutely berserk on social media. You won't find better meme material. But researchers and experts claimed it was all a stunt.

This journalist, Jamie Mousin, had made similar claims before on TV and YouTube, and sells his own line of health supplements, which to me is always a red flag. But the fact that Mexico's official Congress allowed this dude to open up alien mummies on its floor just adds to the UFO intrigue that's been swirling around all year. I genuinely don't know where I stand on the alien discourse these days, but my take is if the aliens you discover look like the aliens from the movie, specifically the alien from E.T., then you probably didn't find aliens, and I'm just going to leave it at that.

It was literally E.T. in mummified form. All right, Neil, before we jump into our top story of the day, we have a quick word from our sponsor. We're the Hartford, with decades of experience ensuring millions of unique small businesses. When it comes to your small business insurance, one size, absolutely, does not fit all. Get a quote or find an agent today at thehartford.com slash small business. Neil, you know the saying, the house always wins, that even if you split your tens and hit when you're supposed to, Vegas has the last laugh.

Well, Vegas is not laughing right now. A series of cyber attacks have hit some of the biggest companies on the strip from Caesars to MGM. A group called Scattered Spider, which is made up of mostly teenagers and other youths from the UK, is likely behind these attacks, which have critical. tripled some of the biggest names in Vegas. Caesars was the first hit and has already paid tens of millions of dollars in ransom to the group who threatened to release the company's data. And then this week, almost all of MGM's systems from their hotel and restaurant booking to their slot machines went dark as Scattered Spider struck again.

Apparently Scattered Spider is really skilled at social engineering. And to execute this hack identified an MGM employee on LinkedIn who worked in IT support. then they called the MGM help desk posing as that employee and 10 minutes later they had the keys to the kingdom. And as we all know, Vegas is a very big kingdom, Neil. So there's a lot of money on the line here. There is. MGM said it had restored some of its operations, but there were reporters going on the ground. You know, that's not a bad reporting trip, by the way, going to Vegas and just walking around the casino floors.

But they said it was something out of the like the 18th century. There were pens. People just had clipboard and pens taking down credit card numbers for reservations. When you won anything on the slots, someone had to go and cash you out in person. So it seemed like all of MGM's hotels there, and it wasn't just in Vegas. That was the thing. And the MGM is a huge casino operator all across the country. So casinos went offline in Michigan, Mississippi, Massachusetts, New Jersey, New York, and Ohio. And so it's only still recovering.

and said everything was operational, but still seems like so many things were down as of this week. And that's a lot of money left on the table when people are like, well, I can't really gamble or get your restaurants. I mean, this morning I checked right before the show, their website is still down. Like, they still have a notice on their saying, like, go to the redirecting people. It's also getting pretty serious because yesterday, MGM filed an 8K report with the SEC, which is basically, they said in regards to this cybersecurity event. and 8Ks are filed when publicly traded companies want to notify the SEC of an event that can have a material effect on the firm.

So this is not just some throwaway hack where, I don't know, some passwords are released. This is something that will materially impact the company. And they're letting the government know that. And it makes sense, too, because if you just look at the, if we look at MGM's previous filing, they said that they generated $1.2 billion just from hotel rooms in casinos last quarter. from Vegas hotels. And from that math, the Vegas properties alone bring in more than $13 million a day. Any dime, any time you have any of these systems down, you're literally losing money by the day. So it's a big deal.

And other, when all these articles I read interviewed experts, cyber security experts, these guys were like, yeah, obviously. Like casinos are such a good target for hackers. Every time they're offline, they're losing money. And they're kind of their old school in terms of their IT. infrastructure. They have what's known as a flat method, which once hackers can access a network, they kind of have the keys to the kingdom, as you mentioned. So casinos are a huge target, and this kind of a wake-up call that they need to upgrade their systems. And MGM had a bunch of its customers' private info hacked only two years ago. So it does not have a good record

when it comes to this. Yeah, it's tough. And I mean, Scattered Spider is a group, no one for their social engineering, which, I mean, social engineering is basically like convincing someone to do something for you. That's such like a fancy term. I don't know. I love that term, though. I mean, I, technically your social engineering every day. But yeah, the fact that they went from a call, a phone call to having the entire, like,

system down in 10 minutes just shows how vulnerable sometimes these systems really are. All right. Moving on, we are one week into the NFL season. There's already a major controversy brewing. It's about grass. So on Monday, star quarterback Aaron Rogers made his much-hyped debut for the New York Jets, but just four plays into his Jets career, he tore his Achilles tendon, and will be out for the remainder of the season. It's a huge disappointment for Rogers, curse Jets fans, and frankly everyone who cares about football, because his switch from the Packers to the Jets was the number one storyline going into the season. But it also reignited a long-simmering debate about whether the NFL needs to make all of its fields grass instead of artificial turf in the name of players.

safety. MetLife Stadium in New Jersey, where Rogers got injured, has artificial turf that players have criticized for years, saying that leads to more injuries than grass fields. And yesterday, the NFL Players Association called on the league, as they have many times before, to switch all of its fields to natural grass. Currently, 14 of the 30 playing fields in the NFL have artificial turf. An estimates show that converting them to natural grass would cost $12 million. For some context, the league brought in nearly $19 billion in revenue. last season. That's what a lot of people are pointing to this number saying it would cost so much less money to just make the players happy, make the players safer. And there is data out there that

shows turf is worse for players than grass. I mean, last year, the injury rate was 37% higher on turf. But where these kind of arguments are meeting a stonewall is the fact that in 2021, for some reason, there was no statistical difference between turf and grass injuries. And it was just a statistical anomaly. Literally every other season has seen differences, but for 2021, for whatever reason there wasn't. And so the NFL has been able to point to that season and say, like, listen, is it really dangerous?

Is it more dangerous? We have this data set that shows it's not. So it's been a really long simmering debate. But I think having Aaron Rogers, the biggest storyline, as you mentioned, this could kick it into high gear. And Roger Goodell went on ESPN yesterday and kind of defended the. the NFL's hesitants to kind of mandate this saying that, like, all the science is in India, we want to make a decision based on science.

There were two Achilles injuries on last weekend. One of them was on turf. One of them was on grass. So you can point to that and be like, well, maybe it's random chance. Plus, Aaron Rogers' injury was, you know, maybe not a non-contact injury, which people point to as maybe caused by the turf. But you played on both surfaces. Like, what is the reason just for people who may not know why,

turf is maybe worse for or will likely lead to injury more. It just doesn't release the cleat as naturally as grass. So sometimes it just adds a little bit of extra friction sometimes, which can be all the difference in these non-contact injuries. But also I was looking into like why are turf fields better in some cases. Obviously like there's the weather portion. Sometimes it's hard to grow grass in certain places. But also in stadiums that share fields with MLS teams, for instance, like Seattle,

the constantly changing the lines back and forth between soccer and football would take a toll on real grass. So Seattle is probably saying, like, listen, there's a reality of what we have to host. And if we're constantly scrubbing lines on and off, it's going to hurt the grass. So there are some pushbacks on maybe some stadiums do deserve turf. It's a nuanced debate, though. Yeah, plus adding even more nuances, there's not one type of artificial turf. The one at MetLife is known for being really crappy. Aaron Rogers called it out a few years ago as well, saying that it could lead to injury, and here's what happened.

But there are other types of turf in places like Houston that are considered safer. But just to zoom out, like the NFL needs to take this seriously because remember what happened about concussions that it kind of turned a blind eye to what was going on with players getting concussed and leading to CTE. And they were accused by thousands of former players of covering up all this data that showed that, football leads to injuries. So it's really not in a position to, in terms of the PR war, to push back on player safety. Yeah. I can talk about turf versus grass all day, but we got to move on, Neil. Our next story, rumor has it that if you gather enough billionaires in a room and say AI three times, government regulators will spontaneously appear. And that's kind of what happened yesterday as a closed door meeting between 20 tech and governmental leaders went down

in D.C. The little game. get together was organized by Senate Majority Leader Chuck Schumer to try and figure out how the heck to regulate AI. The meeting included CEOs of five of the ten biggest U.S. companies like Elon Musk, Bill Gates, Mark Zuckerberg, as well as NVIDIA CEO Jensen Huang and former Google CEO Eric Schmidt. Bloomberg calculated the total net worth inside the room at over half a trillion dollars, which is about the size of Ireland's GDP. With that many personalities, there was bound to be some disagreement. According to various reports, Mark Zuckerberg, Sam Altman, and Bill Gates often classed over diverging views on the risks of open source AI research. And Elon got into a little tiff with a Berkeley

professor about apparently downplaying the risks of AI powered cars. Neil, there's lots more interpersonal drama I could dive into, but honestly, it was nice to see the Senate tried to get out ahead of regulating AI at a time where it's evolving faster than a well-fed Pokemon. Yeah, you don't often see tech CEOs praising Congress or congressional leaders that they often consider to be technologically backwards and too old. But Elon Musk came out of that room being like, this meeting may go down in history as being very important for the future of civilization. He said it was a very civilized discussion among smart people. Senator Schumer did a great service to humanity here along with the support of the rest of the Senate. So maybe, you know, maybe it did go

okay. I think what's going on here is that AI is so complex. I mean, I don't, we, none of us understand it. And people in the Senate don't understand it. So I think there was a lot of level of humility of saying, we want to regulate this. We know that this poses a great risk, a lot of potential, but also great risk. But we need to learn the technicalities first before we go, before we go into it. And so I think there was a level of humility and like, we just want to learn that a lot of the people of industry appreciated. Right. Except for some critics are pushing back and saying, if all these tech CEOs left feeling so happy, is this really the right approach to regis or legislating AI? Because if you have too much industry input, then maybe the regulations don't have any teeth to them.

So there was some pushback on that. And again, I talked about the interpersonal drama. I'll give the juicy details. Apparently, Elon Musk and Mark Zuckerberg didn't interact at all. They sat them at opposite ends of a long table. One panelist said that that's probably the worst wedding to try to do seating for in reference to the meeting. And the only big company that declined an invite to this little powwow was Amazon too.

So there's, again, there's drama everywhere you look on this thing. But yeah, there was no Elon Zuck big bust up, which we were. all hoping for. But to go back to your point of saying industry kind of railroaded senators here, that may be true, but this was a very large swath of stakeholders in AI. It wasn't just tech CEOs. There was a lot of labor leaders, too, including ones from Hollywood that we know are worried about AI. There was the AFL-CIO president who said, like, wow, this is super weird that I'm in a room with Elon Musk. Like, I don't usually get that opportunity. So they said it was really great to bring that. And then you also have researchers who,

are focused on, you know, you have Elon Musk and tech CEOs that are warning about existential risk to humanity. And then you have AI researchers that are like this. We need to focus on what's happening with AI now because it is perpetuating bias and it's causing a lot of harms to minority groups. So like, okay, you can worry about the long-term effects here, but we need to focus on the president. So it did seem like they brought in a large group. And I can't believe I'm saying the word stakeholders. But I think that's the best word here of people who really care about AI. And so, you know, I don't think they got totally railroaded by the CEOs here. Yeah. When it comes down to it, you'd rather see legislation done this way, I think, with so

many people involved than just Congress trying to figure it out on its own. So I think that was the general takeaway from this. Schumer said it's happening within months. So we'll keep our eye on it. All right, Neil, before we jump into the next story, we're going to take a quick break. It's time to refresh your yard during spring backyard days at the Home Depot. Get low prices guaranteed on propane grills, starting at $179. like the next grill three burner gas grill, or get $50 off the select Weber Spirit Grill and bring big flavor to your backyard.

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We are back with Neal's numbers, where I share three stats from the week's news that will give you plenty of small talk fodder during those awkward first five minutes of a Zoom meeting. For my first number, I want to talk about why you're so bummed out listening to your Discover Weekly these days. It's because pop music is much sadder than it used to be. We know this by measuring how many songs in the Billboard Hot 100 that are in a minor key, which typically indicates a more somber or moody vibe. And the share of hit songs in a minor key has soared over the past few decades. According to music data analyst Chris Dalariva, half of the Billboard Hot 100 songs today are in a minor key, up from 30% at the turn of the century, and 15% in the 1960s.

Heck, even the Farrell song, Happy, is an F minor. So what's with the major fall and the minor lift in pop music? Well, it could indicate that people are generally more pessimistic and sadder than they used to be, especially young people. Earlier this summer, Spotify said that Gen Z's most searched term on his platform was sad. Literally the word sad. That's what music they wanted to hear above all else. Neil, you're more of like a musical historian or musical scar than I am.

Are minor key songs just also more interesting to listen to in terms of like the tension in the song than major songs? Or is that just not part of it? I mean, you can create tension in a major song. I think there is a sense that a major song kind of all resolves to be super happy at the end. It can go different places. Like it can go to, it can go into minor chords and create tension that way. It's not necessarily. Like when you think of Mozart, that's like, like,

think about just really happy, abelian stuff. That's major key. When you think of like Olivia Rodrigo kind of thing, that's mine, that's more minor. First time Mozart has been compared to Olivia Rodriguez. I don't think you could call up a musicologist and say like a minor's inherently

more interesting than major. Obviously, it does lead to a more moody or vibe. And I think that's what people, for whatever reason, are gravitating to these days. Obviously it syncs up with a lot of like increased mental health issues that Gen Z is experiencing that show up in all of the health data.

It's a great, that's a great stat, tracking the minor. Yeah, I think it says something about our society. I don't know exactly what. Let's head to the second number. Remember when Jennifer Lopez married Ben Affleck last year and became Jennifer Affleck? Well, she's in the clear majority. A new Pew Research Center study showed that the tradition of women in opposite sex marriages adopting their husband's last names is still very much alive.

About 80% of women in those marriages took their spouse's last name. when they got married, while 14% kept their last name and 5% hyphenated both their name and their spouse's name. So who are the 14% of women that don't change their name? They are most likely to be younger. 20% of married women below 50 kept their name compared to 9% of those older. Democratic and Democratic-leaning women were twice as likely as their GOP counterparts to keep their last name, and women with a post-grad degree were twice as likely to keep their last name compared to those with a bachelor's degree. I wish the social norm here was just to pick the cooler sounding name.

No way. That's exactly what I think. Because, yeah, like some last names are just bad and they just don't roll off the tongue. Like, they should, married couples should get together and say, all right, let's be honest. Let's observe this objectively. Who has a better sounding last name for our names? And just go with that one. Think about if every couple did that, we would have, we would engineer society to have the most incredible names. Or because we'd get rid of all the bad ones.

and we just completely surface the best ones until we... We all end up with the same name. Yeah, yeah. The end point of that is just we all end up with the same last name, which could be confusing. All right, finally, I want to talk about the head coach of the University of North Carolina field hockey team, Aaron Madsen. Why? Because at just 23 years old, she is currently the youngest coach in D1 athletics.

Madsen literally got this job less than two months after graduating from UNC and its field hockey program. Aaron's qualifications are pretty, pretty good. According to the NCAA, she's easily the most decorated player in the sport, having won four national titles, five conference championships, and three Honda Sport Awards, which is given to the best female player in each sport. But now she's going to be coaching many of her former teammates. I definitely know I grew up playing with a few guys that you wouldn't bat an eye if they became coach. They were just like had that about them. Usually though they go to assistant coaches first and you have to battle through kind of winning over the respect.

Going straight to head coach would be a bit of a wild thing because what is, she knows 21 of the 28 players currently on the roster. That's a little too close for comfort, but hey, she's qualified. She's so good. The tart heels are an absolute juggernaut. In most sports, too. In most. No, but in field hockey, I mean, the coach she replaced won 10 championships in her 42 years.

It's a tough one. But I hope they lose to the Terps this year. All right, moving on. We've got trouble on the high seas, a luxury cruise ship with a luxury cruise ship with more than 200 people on board, ran a ground in the remote waters of Greenland, and they might want to start playing some get-to-know-you ice breakers, because they're going to be there for a while. The ship has been stuck in the mud there since Monday, and the earliest of rescue could come is tomorrow after a fishing vessel tried and failed to free the ship yesterday.

Denmark's military has visited the ship, and luckily everyone seems to be in good spirits, probably because the ship is ultra-fancy with a gym, jacuzzi, other state-of-the-art amenities. the company that runs these cruises specializes in polar trips that can run up to $33,000 per person. So the situation could be worse, but it highlights the perils of tourism to the northern climes, which require expensive and logistically complicated rescue missions when things go wrong. Greenland's not on everyone's top destination list, but the number of cruise ships headed there has soared 50% in the past year to 600 and it's only going to increase further. Yeah, I mean, this hits on a bunch of themes we've talked about on the show throughout this

year. More people are going to Northern Europe because Southern Europe is so, so hot during the summer. So, like, we did mention a growing shift towards going to, uh, uh, Northern Climes, as you so eloquently put it. Um, and then also it did feel a little extreme tourism-y to me as well, because they're just so isolated. And the only way that a rescue team reached them was this elite Danish special forces unit that is actually a dog sled unit, which is just the coolest job I've ever heard my life to be an elite special force dog sled unit. So very cool on that on that front. So you said this was extreme tourism and it really is because fewer people go to this area at the North East Greenland National Park than I've summited Everest. See? It's very extreme. I also was

digging into, I throughout my research, I saw that Greenland was the largest island in the world. And then I was thinking because the majority of people stuck on this boat are from Australia. And I was like, isn't Australia the biggest island? Technically, Australia is a continent, like, North America or Africa, and you don't consider, like, North American island. So there is, Australia is on its own continental plate, and it

goes by a continent. So technically Greenland is the largest island in the world. This is what I was doing last night. It is diving deep into, like, the island lore, so. I want to go to Greenland. I think Greenland's really expanding its tourism industry, because it's cut off a lot of, it has a lot

of natural resources, but it doesn't want to do tap into that for a lot of climate reasons. So it's adding a lot of flights to its airport. And it looks like we may get a direct flight from New York to, I don't know how to pronounce this city, but it's only four hours. Let's do it. Let's do a little Greenland pod, Neil.

All right, Neil, for our last story, I want to tell you about some drama going down in the professional pickleball world that puts the PGA Live golf beef to shame. So similar to the PGA and Live, two competing tours have emerged in the professional pickleball scene, major league pickaball in the PPA tour. They both chose two very different approaches to how they set up their tournaments. The PPA tour is a bracket-style tour format kind of like tennis,

while the MLP is a co-ed team-based league, which allows high-profile owners like LeBron and Tom Brady to own franchises. So these two leagues have been operating simultaneously over the past few years, but a growing arms race for players has erupted with splashy contracts being handed out left and right. But as of yesterday, we've found. finally have a ceasefire. The PPA and the MLP have agreed to merge under a unified pickleball holding company. Now, Neil, don't count your pickles before they hatch, though. One merger between the two leagues has already fallen through, but for now, it looks like we have a deal.

All right. That was a lot of pickleball thrown at you right there. What do you make of it? I think this will only be successful if they make pickleball into a spectator sport. You just don't think it's very fun to watch? How do you make money as a league, as a sports league, is you sign contracts with streaming and TV companies to broadcast your matches on TV, I don't think pickleball will ever be a spectator sport that someone will say, I'm going to sit down and watch pickleball. And therefore, I don't think any of these leagues, whether they're separate or together, are going to make any sort of consequential money.

So to me, this feels really like the SPAC boom. When all these celebrities kind of started doing SPACs and you have LeBron James and, you you know, Kevin Duran and Michael B. Jordan, Mahomes, and Brady, like, going into getting these teams. But I think it's ultimately going to flame out because no one wants to watch it on TV. Well, I'll give you the bowl case. Give me the bulk case. You're not right. I mean, the staff that's always cited is more than 36 million people played pickleball in 2022,

which is just an absurdly high number. You have places like chicken and pickle, which is kind of like a top golf for pickleball. Also, membership only clubs, like the pickleball club in Sarasota. I've been to there. But that's just playing it. I know, that is the bulk case, though. When you see a chart of the number of players just up and to the right, it's very hard to not invest in the professional scene of that.

So, again, and I mean, you have vacant mall space being taking them by pickleball. It's like it is just the hottest sport going right now. So obviously there's going to be some money poured into trying to make professional leagues work. So, again, yeah, it is maybe not the greatest sport to watch on TV, but it's hard to ignore just the sheer amount of people playing pickleball. There are a lot of people playing pickleball. I'll give you that. But there are a lot of detractors, too.

Amazing quote from Caitlin Thompson, who's the co-founder of this tennis magazine racket. She's not a fan of pickleball. She said, because the tennis establishment is so ossified and beset by infighting, all the VC money that wants to go somewhere has propped up a garbage sci-op NFT. So she called pickleball an NFT. And a sci-op. And a sci-up.

Okay, we have to wrap it up there. Hope you all have a great Thursday. Please send all thoughts about what you heard on the show to Morning Brew Daily. at MorningBrew.com. Let's roll the credits. Samantha Vela's is our editor and producer. Evan Frolov and Raymond Loo are associate producers. Eugenwa Ogu is back as our technical director. Billy Minino is on audio. Hair and makeup went on a cruise and we haven't heard from them since Monday. Devin Emery is our chief content officer and our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow.

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