Plain English with Derek Thompson - The Problem With Sports Gambling

Episode Date: October 31, 2025

Last week, an FBI investigation into gambling led to the arrest of several prominent basketball stars, raising questions about the state of legalized sports betting, which has enriched professional sports and sports media. The problems with sports gambling extend far beyond the integrity of the game. A 2024 working paper from economists at UCLA, Harvard, and USC found that states that legalized sports gambling after the 2018 ruling by the U.S. Supreme Court saw “a substantial increase in average bankruptcy rates, debt sent to collections, use of debt consolidation loans, and auto loan delinquencies. We also find that financial institutions respond to the reduced creditworthiness of consumers by restricting access to credit.” A separate analysis found that nearly one in five men aged 18-24 is on the spectrum of having a gambling problem. There’s no question that sports betting has taken over sports. It’s all over ESPN, all over my favorite sports podcasts. This podcast is a part of The Ringer Podcast Network, which has close relationships with the sports book FanDuel and has several shows devoted to gambling. I listen to them. Quite a lot, actually. It would be easier for me as the host of this episode if my position on gambling had the clarity of pure outrage. If I thought that gambling was a pure vice, a mere nuisance, and a total drag, I would say: Let’s just be done with it. On the opposite end, if I thought that legalized sports gambling posed no risk to bettors, didn’t threaten the integrity of professional sports, and represented an obvious improvement to the previous regime of black-market betting, I’d say: Ignore these moralizing bozos and place your 15-part parlay. The trouble is that I don’t have the advantage of clear outrage on this issue. I think that sports gambling is fun. And I think that it threatens the integrity of professional sports. And I think that it ruins some people’s lives. Today’s guest is Jonathan Cohen, the author of 'Losing Big: America’s Reckless Bet on Sports Gambling.' Like me, Jon is worried about the effect that legal sports gambling is having. Also like me, he sometimes bets on sports. Also like me, he listens to Ringer podcasts. If you have questions, observations, or ideas for future episodes, email us at [e-mail]. Host: Derek Thompson Guest: Jonathan Cohen Producers: Devon Baroldi Learn more about your ad choices. Visit podcastchoices.com/adchoices

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step of the way. Today, gambling. Last week, an FBI investigation into sports betting led to the arrest of several prominent basketball stars. A former player was accused of leaking updates about LeBron James's injuries to co-conspirators. The point guard, Terry Rozier, was accused of taking himself out of the game to help a betting partner, and Portland Trailblazers head coach, Chauncey Billups, was accused of telling gamblers that his team planned to lose, seemingly, on purpose. In response to these arrests, NBA Commissioner Adam Silver said Friday night that he was, quote, deeply disturbed. Deeply disturbed.

Now, consider an alternative view that requires us to turn back the clock 11 years, years. In 2014, the New York Times ran an op-ed entitled, quote, legalize and regulate sports betting, end quote. For more than two decades, the NBA had opposed the expansion of legal sports betting, forcing betters to use illegal bookmaking operations in shady offshore websites. But the laws on sports betting should be changed, this author wrote. Quote, I believe sports betting should be brought out of the underground and into the sunlight. You can probably see what I'm doing here. The author of that op-ed was also Adam Silver.

I think comparing Silver's 2014 and 2025 comments tells us everything we need to know here. Professional sports got exactly what they wanted out of legal sports betting. And the results are often deeply disturbing. A 2024 working paper from economists at UCLA, Harvard, and USC found that states that legalized sports gambling after a 2018 ruling by the U.S. Supreme Court saw, quote, a substantial increase in average

bankruptcy rates, debt sent to collections, use of debt consolidation loans, and auto loan delinquencies. We also find that financial institutions respond to the reduced creditworthiness of consumers by restricting access to credit. End quote. A separate analysis found that nearly one in five men between the ages of 18 and 24 is on the spectrum of having a a gambling problem. This is really bad, and there's no question that sports betting has taken over sports. It's everywhere I turn. It's all over ESPN, all over my favorite sports podcasts.

This podcast, plain English, is a part of the Ringer podcast network, which has a close relationship with the sports book Fanduil and has several shows devoted to gambling. I listen to them. Quite a lot, actually. It would be easy for me, as the host of this episode, if my position on gambling had the clarity of pure outrage, if I thought gambling was a pure vice, a mere nuisance, a total drag, I would say, let's just be done with it. On the opposite end, if I thought legalized sports gambling posed no real risk to betters and didn't threaten the integrity of professional sports,

I'd say, ignore those moralizing bozos and go ahead and place your 15-part parlay. The trouble is I don't have the advantage of clear outrage in either direction on this issue. I think sports gambling is fun. I think it threatens the integrity of professional sports, and I think it ruins some people's lives. Today's guest is Jonathan Cohen. He's the author of Losing Big, America's reckless bet on sports gambling. John has a deep historical understanding of the laws that actually exist,

laws that were regrettably written by the sports books and their lobbies. laws designed to maximize for money, wagered, rather than people protected. Like me, he's worried about the effects that legal sports gambling is having on America. But also like me, he sometimes bets on sports. And also like me, he listens to a lot of ringer podcasts. This is not a moralizing crusader. This is someone who, thankfully for our purposes, knows what he's talking about. and if we want to recognize the problem that is legal sports gambling,

I think it's important to be clear about what problem it is we're exactly trying to solve. I'm Derek Thompson. This is plain English. Jonathan Cohen, welcome with the show. Thanks for having me on the Ringer Podcast Network, brought to you by Fandual Sportsbook. You and I have been emailing for a while about doing an episode on sports betting, which the FBI announcement provided an obvious newspeg for. And when I asked you what your take on the NBA scandal was,

you wrote this, quote, the big argument this week is whether the rise of legal sports betting as a mainstream consumer good played any part in the scandal. Technically, it didn't, but also it obviously did, end quote. What did you mean by that? So a couple things. And first is that we've had sports betting scandals like this, you know, the Black Sox scandal of 1990 is the first one that they could come to mind.

A lot of armchair historians this week who have a lot to say about the Black Sox. And the case against the two of the coaches and former players who were arrested earlier this week is built on sort of a traditional sort of game rigging insider information scandal that might have been familiar to Shulis Joe Jackson in 1919, right? Using leveraging insider information about how a team would play or what players would would play or how they would perform to the benefit of gamblers to tip off gamblers in advance. Okay, fine. So that's where you'd say this has nothing to do with legalized gambling because we've had

this long before we had legalized gambling. We've had these exact kinds of scandals. But then two other ways where it sort of obviously is connected. The first is the Tara Rozier case, which is similar to the Jante Porter case from last year that folks may be familiar with. Terry Rozier is alleged to have rigged his own performance and tipped off betters that he was going to check out of a game early. So they bet lots of money on whether he would exceed a certain number of points or exceeded a certain number of rebounds. And then lo and behold, nine minutes after checking into the game, he checks out because he claims his foot is hurt.

So he does not exceed those numbers of points or rebounds, but there's a suspicious amount bet on Terri Rozier to exceed those numbers. And that is uniquely modern because those types of bets on whether a relatively obscure player, like John DePorter, especially, or Terry Rozier, whether they're going to hit a certain benchmark. That's uniquely modern. That's only new. That's only thanks to this sort of technologically supercharged version of sports betting that we have now that someone can gamble on something like that.

Not to mention gamble, basically as much money as they want on it in some instances, not to mention gamble as much money as they want on it from their phone, from their couch. So that's where this version sort of made that easy and made it different from 1919. And then also, I mean, just open your eyes and look at like every dream. Graph Kings add, and every, well, sorry, this is the ringer, so every fan will add on every commercial during its break during a sports game. And it's clear that the culture of sports has just changed to being about gambling in many ways. And how can we, I see sort of an inevitable consequence of the rising culture of sports gambling and the number of people involved in

sports gambling as more people trying to rig games or more people trying to call up their buddy who's an athlete and try to get them on the take. And lo and behold, you get scandals like the one we had last week. I really want to understand a history of how we got to hear. But before we do that, I think it's really important to be clear about what is the problem we're trying to solve here? What's the problem with sports betting normalized and popularized sports betting in your mind? Is it the threat to young people?

Is it the threat to young men? Is it the threat to people who are predisposed to gambling addictions? Is it the integrity of the game, which is something that NBA Commissioner Adam Silver was just speaking to. I mean, take your time with this answer, because I think it's really important to be clear about the problem we're trying to solve before we get into the history and the analysis of exactly what's happened to these leagues. Yeah, I think, you know, the scandal of the day this week was the integrity of the game question. But to me, the scandal when it comes to sports betting is what's happening to young people, more particularly to young men, and the way

that they are losing time, money, mental health, in some cases their own lives, because of how much they are gambling. In some cases, they are developing addictions, but in many cases, even people who are suffering negative consequences, is not a addiction per se. It's just a bad experience, like a bad night or a bad week or a few weeks, that leads them to lose a lot more money than they intend, a lot more money than they can afford, and run into trouble that way. I want you to make the case, in the strongest possible terms, that these harms have reached the level that we should care about as a national policy. So here's some statistics that I learned from your book and your reporting. Half of men between the ages of 18 and 49 have a sports

betting account. Now, pause. There's nothing particularly alarming about that. I mean, half of men can have accounts on any kinds of websites. It doesn't mean there's any particular harm that has met them. Now we move on. In New Jersey, nearly one in five men aged 18 to 24 is on the spectrum of having a gambling problem. That's a little bit more concerned. Another statistic, 82% of revenue from bets on the NFL comes from just 3% of betters, which suggests that maybe there are a lot of people who cannot afford the level at which they're betting that are going back and chasing lost bets and getting deeper into debt. There's also been research suggesting that, and correct me if I'm wrong here,

we see meaningful increases in personal bankruptcies as states begin to legalize gambling. going into the stats here. I don't want to lard people up with statistics, but again, it's important to be specific. What are you most concerned about? What is the money stat that should really make us open our eyes to say, this has reached the level of something we can begin to think of as a public health crisis? Right.

So as you alluded to, are these two papers, two landmark papers, I think, working papers, that show that the effect, the financial effect of the legalization of online sports gambling is so acute. that it sort of shows up in state-level aggregate statistics, where within a few years of a state legalizing online sports gambling, we see personal bankruptcies go up, we see auto loan delinquencies go up, and we see savings and investment in low-income households go down.

So these are, of course, correlational, not causal, so folks can sort of pick their nits with those studies if they want to. But to me, it is evidence. It is quantitative evidence for the qualitative conversations I've had with many of these betters and with people who work with betters and, you know, addiction treatment providers, for example, who see this happening, who see

a demographic change in the people who are coming to them for gambling addiction treatment, which is trending a lot younger than it used to be. And it is, again, so pervasive that it is showing up at this sort of aggregate level beyond what we would have maybe expected of, you know, we look at Derek here and John there

and so on. Yeah, we can talk about aggregates, and I'm motivated by statistics that they're a big part of how I tell stories about what's happening in America. But one thing that you do in your book, I think quite beautifully, is tell the story of individuals. Do you want to tell me about one of the people who you spoke to and profiled in your book, losing big, and the effect that gambling had on them at the individual level? Yeah, so the sort of the main character of the book is this guy named Kyle. He was living in Denver in 2022 when legal sports gambling arrived there, and he was really excited.

I'll say by way of background, that he had been to a casino sort of many times in his life and playing with chips, playing with real money sort of has never been a problem with him. So he was like, oh, I can't wait for sports betting too. And then he downloaded every out all the apps and signed up for all these bonus offers. And then pretty quickly ran into trouble. He gambled a little bit more than he could afford. He lost.

He couldn't pay his rent. His dad bailed him out. Okay, fine. Lesson learned. Except lesson not really learned. And he sort of went for many years through, again, maybe a gambling addiction, and maybe sort of one step below a gambling addiction. And of gambling a lot of money,

he got comped all these Rockies tickets by one of the sports books because he was gambling so much. He'd be up at three in the morning, gambling on minor league British darts because there'd be nothing else in the U.S. that he could know no sports happening in the U.S. But he sort of needed, he felt like he needed to get some action. And then at one point he goes on a hot streak.

So he's making $65,000 a year at the time. He gambled over the course of one January, $95,000. on all sorts of things, mostly college basketball and NBA parlays. And he went up big, and his life was already so consumed with gambling that now this hot streak sort of instilled him with this sense of overconfidence that he was going to make his money gambling, of course, ignoring like the two and a half years previously of all the losing he had done. But he got fired from his job because he just wasn't performing because he was just gambling all day,

that he, of course, starts gambling with his unemployment checks. Of course, his hot streak ends. so he starts losing, moves back in with his parents in Wichita. Okay, now lesson really learned, except not really, because now he's sort of out of a job, a little bit more isolated because he's with his parents, living with his parents, and he keeps gambling. And he, during not this most recent one, but the previous French Open, like, stayed awake for 40 consecutive hours gambling on live lines on tennis.

He would, like, take a break to, like, smoke cigarettes or, like, drink beer, because that was, like, the only thing he could do to, like, calm him down. And then finally at some point, he quit. He didn't have any sort of major crash out or anything like that. But at some point, he just decided enough was enough. And he had decided enough was enough many times. But this time, for whatever reason, it stuck. And I'm happy to report sort of since I finished the book.

And the book ends up on a note of ambiguity because I really didn't know if he was done when he said he was done. But he has now actually been done for about 18 months, which is great. But he feels like he has this sort of black hole in his life for like three years or five years, like I just got basically erased by gambling and all the money he should have been making over that time, all the employment career opportunities he should have been developing during that time. We're just sort of wiped out because he stepped on what he describes as like a landmine that's lying in front of young men these days. I'm really glad you shared that story.

And I really think it's important to make some of the harms of sports gambling individual because the statistics are important, but they're also cold. And it's people's lives that ultimately matter the most. You know, I want to pause here to say that, like, this would be an easy podcast to make if I had a really, really clear answer in my mind as to what we should do about legal sports gambling. But here are some objective facts that are inconvenient, perhaps, but also just true. Number one, I work for a podcast network that is financially irrigated by fan dual ads. Number two, I listen with great pleasure, with great joy to many podcasts that are irrigated with Draft King ads and Fandul ads on the ringer, on ESPN, on a bunch of other podcast networks.

I enjoy many of these gambling gimmicks, like over-unders to predict the number of wins for various teams in the NFL or the NBA as a means of pulling back the curtain on a season is a brilliant an easy way for two people to discuss whether certain teams are overrated or underrated. It's a very, very easy and entertaining gimmick. Number three, I have bet on games and can say with absolute certainty that it is more fun to watch certain sports when you have a bit of money riding on the outcome. There's just no debating it. I have a better experience of being a sports fan in that moment, having

even a little bit of money associated with a particular player getting over 300 yards passing, a particular player getting 100 yards rushing, a particular team winning. It's fun to bet on games, and I personally do not feel myself to be in any risk of ending up in the situation that Kyle is in or not being able to say make my car loans. And there are millions of people who are just like me who have a relationship with a casual, fun, entertaining American pastime that is not ruining their life

and is more or less just infusing it with joy. How do you, as a writer, and it's an advocate, really, keep these two truths side by side, that gambling is for many people, maybe even most people,

just plain fun, and that also it carries this risk for a meaningfully large minority, I'll call it a meaningfully large minority, even though it might be more than that, carries this enormous risk for meaningly large minority that it can hurt and in some cases even ruin their lives. What do we make of a phenomenon like this? Yeah, and just for the record, I'm a white guy from outside of Boston, so I came out of the womb listening to Bill Simmons

podcast and I consume many of the same, much of the same media that you do and have been listening to gambling media since before gambling arrived in this country, in this fashion. And just sort of the flip side to the statistic that you offered about NFL gambling, right? 60% of gamblers on the NFL account for just 1% of the sports book revenue. Yes, I am that 60%. Yeah, me too. Thank you, Baltimore Ravens for last night's win, all $12 of it. So I think this actually, your question sort of gets me to the central thesis of my book,

which is if I had to really boil it down, is that it didn't have to be this way, is that sports gambling should be legal. and I think even online sports gambling should be legal, but we could have rolled it out in a way that is safer. The word I use in the title of the book is reckless, in a way that is less reckless, less heedless, that would have allowed people like you and me to gamble and to get our kicks in

and would have made it not impossible, but almost impossible, more difficult for someone to start in our situation or even in Kyle's situation, and for that, for them to sort of fall down the hill, for the snowball to accumulate weight and speed and velocity sort of falling down the hill into harm. And so I think I totally agree with you. Again, I think it should be legal. I think my own sports fandom has been augmented by both gambling content and actual participation in gambling. And I wish that absolutely everyone could say the same.

And my goal is not to, I'm not a secret prohibitionist by any means. My goal is to make it almost impossible for anyone to start casually and end up in trouble. Well, you said it didn't have to be this way. So let's talk about what went wrong. Let's go back 10 years or so to 2014, which is an interesting inflection point in the history of gambling in the NBA and the NFL. Notably, this is the year that NBA Commissioner Adam Silver writes an essay in the New York Times where he argues that betting is already happening in the shadows and it would be better if the leagues brought it into the sunlight. Help me understand at this inflection point, what's the case that the leagues are made? for more broadly legalizing gambling? And also, what's the case that the American Gaming Association is making to essentially encourage the league to make their business a bigger and legal business? Yeah. So just on the second side, so the American Gaming Association, which is the lobbying group for casino interests and now sportsbook interest in Washington,

they are making the case that look at all the money you can make, or you would be able to make, worse, sports betting to be legal. You can make it through. This is the case they're making to the leagues. They're telling the leagues. There are memos that are publicly available that are still on the AGA's website that says, here's our projections for every single sports league and how much money you guys

could make from data partnerships, from ad sales, from increased viewership and so on. This is why you should support this ongoing effort that we'll talk about in a second to overturn the bill that is sort of keeping sports betting illegal. We can get to that. That is the case that the AGA is making to the leagues. So in 1989, the Oregon lottery was threatening to basically legalize sports gambling. It wasn't sports gambling, as we know and love it today. It was sort of a version of a parlay card betting.

And the leagues basically freaked out. And they didn't want any form of gambling to be legalized in any fashion. Even this parlay card version, which I can attest is pretty benign because I ran a sports betting parlay card pool in my high school in 2007. So in 1992, the league sort of finally get what they want because they don't want. The leagues don't want to have to go state by state and get each state to crack down or to block each initiative for sports betting. So they go to Congress. And in 1992, Congress passes the Professional Amateur Sports Protection Act, which doesn't make sports betting illegal, but blocks states from

legalizing sports betting. This is going to be really important in 2018 when we finally get to that year, six hours from now. And so bringing this forward to 2014 in the 2010s, The AGA is imagining that the leagues are the opponents here, that the leagues don't want sports betting because the leagues were, of course, the ones who got sports betting effectively banned. And that is why Adam Silver's op-ed in 2014 is such a landmark decision because he says, actually, we're wrong. Actually, we were wrong. The league, the NBA, the NFL, NCAA, MLB, and NHL, which got gambling, which cut out, cut the legs out from any momentum,

natural momentum for legalized sports betting in this country. We were wrong. We need a new approach. And his argument rests on a few things. But primarily, it's the fact that so much illegal gambling is already happening, that we might as well legalize it because we're not even going to necessarily, thanks to the internet, we're not even going to necessarily create a whole new people who are gambling, who aren't already gambling. We're just going to take money that's already being spent on gambling.

We're going to move it over into a regulated environment where not only will states earn tax revenue from it, but we'll be able to better regulate it ourselves, but better able to oversee it, better able to protect the integrity of our games. There's one other piece here, which is the rise of daily fantasy sports. Fantasy sports had been around, going back for many decades, but sort of rose in the early 2000s. Again, I can personally attest as someone who has lost every fantasy baseball league I've ever participated in for like 22 years.

But around the early 2010s, draftings and Fandle were coming onto the scene, not as sports betting companies, but as purveyors of daily fantasy sports. Daily Fantasy Sports being a version of fantasy sports that's basically just gambling in disguise and where you can bet on you bet real money to challenge other players either one-on-one or sort of in a big tournament fashion to build a lineup for either a day, for a week, for a time slot of who can build sort of the best performing lineup of fantasy players. And they each have like a fake salary. So you can't just like pick Tom Brady, you know, every time, which of course you would have in 2014.

And these are so big at the time that Adam Silver's op-ed is sort of in this context of all these people are doing this thing that is not quite sports gambling, but it's not not sports gambling. It's basically sports gambling. Fanduan Jackings were the largest advertisers in the country in 2014 and 2015. And so I think part of Adam Silver's calculus is not just that all this illegal gambling is happening anyway, but all this basically legal gambling is happening too. Clearly, American culture is warming to gambling in a new way. let's sort of hop on the bandwagon. And the day after his op-ed comes out, they literally do.

The NBA buys a purchase a stake in Fanduel to sort of put their money where their mouth is. And this brings us up to 2018, which is a really important year in the history. But I want to try to offer a little bit of a synthesis here. It seems like in 1989, 1992, the leagues saw the sports books, a little bit like the Roman Empire saw the Goths.

They were like, we got to keep out these barbarians. Like, they are crude and they are a threat to our business, our cartel, our empire. But over time, they realize, like, no, like, we could use their swords and shields and cavalry, like bring them inside the walls. Like, we can use their business and we can grow our business if we bring them into the light. I think it's important to say, as long as you're telling this story, that something else is happening in the 2010s, which is court cutting. And cord cutting threatens the ratings of a lot of these sports leagues such that they

start to worry, like, where is the next, like, pot of money going to come from if a lot of young people are cutting the court and maybe even moving away from sports? Well, if we bring in gambling, then we'll have this other revenue stream that can support our businesses. So that brings us up to the mid-2010s, and there's a really important Supreme Court decision in 2018 that I want you to tell me about now. How does that affect the picture? Well, like every other Supreme Court decision, it's not only about gambling, but it's actually about something that has nothing to do with gambling, which is the state of New Jersey is keeps trying to legalize sports betting and it keeps getting denied on the grounds of PASPA, on the basis of PASPA,

and Congress does not allow states to legalize sports betting. And then finally, one of their cases breaks through into 2017, 2018, and they are suing the sports leagues because this is what's sort of really in Congress here, which is the state of New Jersey is trying to legalize sports betting. The leagues are suing New Jersey to stop it from legalize sports betting. The leagues are suing New Jersey to stop it from legalized in sports betting, including the NBA, which has, of course, whose commissioner has, of course, authored an op-ed saying he thinks gambling should be legal, but as long as gambling is illegal, he needs to sort of be on the side of PASPA and on the side of keeping it illegal until May 14, 2018, the Supreme Court decision we're about to get to.

But finally, one of the cases breaks through, and it is decided, about a six-stream majority of the Supreme Court, not because it has anything to do with gambling, but on the basis of the 10th Amendment, which basically boils down to the question of states' rights. And PASPA, if PASPA had just made sports gambling illegal, fine, that'd be one thing. But they left it legal in Nevada. They had a loophole for Atlantic City. They had a loophole in Delaware and Montana. So it's basically violating states' rights because it's telling them whether or not they're

allowed to legalize sports gambling. And that violates the 10th Amendment of the Constitution. And now, as of May 14th, 2018, states are free to do whatever they want when it comes to sports betting. And in fact, many of them start to legalize sports betting. That's 2018. Then the pandemic hits, lots of people locked in their houses. What are they going to do?

They're going to pull out their phones and have the fun that they have with their phones, and that includes sports betting. The industry is supercharged. Crypto is taking off in this period, along with all sorts of prediction markets. I do want to put a pin in the relationship between gambling, crypto, and prediction markets. That's for a few minutes from now. But bring us up to now.

Like, what else changes in the general picture of sports gambling as, various states begin to legalize it, and these companies, the draft kings and fan duels of the world, are really starting to explode and take off. Yeah, so I would say two threads here. The first is that the version of sports betting that gets legalized is nothing like what Adam Silver was probably imagining in 2014, probably not even like anything Chris Christie was imagining,

and then Phil Murphy was imagining when the state of New Jersey was suing to get pass but overturned. What they were probably imagining was like what Vegas had had since 1931, which is like a nice little section of your casino. It's filled with cigarette smoke, but you can go there and you can place a bet on like your team to win or an over-under for the season or whatever. But what we got and what the company started pushing for in state government is this technologically supercharged version of sports betting that we now have, which is you can of course bet on a team to win the game. You can bet on the next serve in a tennis match and then you can bet on a Malaysian women's doubles badminton, you know, all from your phone, all frictionlessly, all gambling basically as much money as you want as easily as.

you want. So that's one thing, is sort of the version of sports betting that we're getting, thanks to the regulatory and advocacy efforts of the companies, is different from, I think, what states initially bargained for. Can I pause you there? To what extent would you say that the laws that exist today are essentially written by the sports book lobbying teams? My focus on my case study of this is the state of Colorado where it is like almost literally, in some cases, written by the lobbying teams of the sports gaming companies. Oftentimes with the vocal enthusiastic consent of the states, of the lawmakers who, of course, don't think about sports gambling all day, but lo and behold, the Draft King's lobbyist does. And the state legislators,

going back to the 1730s in the United States, have seen gambling as free money, as a tax-free source of government revenue. And these efforts by Draft Kings, they are told, and they are told truthfully, will maximize the amount of money that the state can make from sports gambling. And no one is thinking about responsible gambling. No one's thinking about problem gambling. It's like, Sure, let's just like legalize this thing that will create tax-free tax revenue for us. Like, why not? And that, and again, it varies state to state in terms of the degree to which the company sort of got their talons into the regulatory process.

But my reporting and reporting from others shows that it was pretty intense and directly thanks to them that we sort of got this version right out of the gate. One thing I would really love to understand is how the economics of sports gambling work for sports leagues. Like, how do the leagues actually actually. make money from the fact that people are betting on these games and that like the the sports books themselves have like a new kind of legal relationship with these sports leagues right so i i it comes into three ways the first is the and the folks the one folks probably are most familiar with is just

advertising right there's just a whole new category of advertising in the way that there's car insurance ads and there's cell phone ads and their hamburger ads and now there's also gambling ads um and this include sort of in-game promotion, you know, this seventh inning stretch brought to you by Caesar's sports book. An estimate from the Washington Post is that the advertising spend by sports spending companies is the equivalent to like the revenue from two or three extra teams in the NFL because it's sort of that order of magnitude. So that's one bucket. The second bucket is a little bit more, more, a little bit harder to quantify, but it's related to viewership. And you were referring to this already. And there's all these studies that show that when people

have money on a game. They are more willing to watch sports. They're more willing to watch a game whose outcome has already been decided because they have money on it. And that translates, that's the rising tide that lifts all boats, as you said. That's a solution to the cord cutting problem. That increases the cost of all those ads for telecom and for beer and for all these other things that the leagues are in business of selling ads for because that is really fundamentally how they make money at the end of the day. And there's this third category. that's like a little bit under the surface, which is the data sales. And this was actually a big part of the AGA's promise to the sports leagues in 2018 that this was how they could make money, which is that all of these sports books, not only have to pay to sort of be the official licensed sportsbook of the NFL or whatever, but they also have to pay the NFL for the right to use official NFL league data. This is why you have, you know, every sports book has the same grade on every on every bat. You know, they all have Roman. Madunzei at 71 yards for the day. No one has it at 72. No one has it at 70 because they all are

purchasing data from the same place, which reduces arbitrage opportunities between sports books. It does actually, I think, help the integrity of the game piece a little bit for exactly that reason. But it's just sort of this secret way the leagues are all making money is owning, they buy shares in these data providers and then force the sports leagues to buy data from those data providers. I want to sit in the effect that this has had on American sports. So one effect that it's had clearly is on the experience of the fan. I mean, when I watch ESPN, ESPN bet ads are everywhere. And one of the jokes that was being passed around is this split screen last week of ESPN personalities condemning sports gambling. And the condemnation is immediately interrupted with an

advertisement for sports gambling, which, you know, I think speaks to several things. It speaks to the sheer amount of money that gambling has injected into sports. It speaks to the fact that people like gambling content. I mean, ESPN has all the data in the world. If ESPN knew that its viewers frigging hated gambling content, they would turn on a dime and say, okay, we're not going to have gambling content. People sometimes complain about what they see on television. TV producers have never been more intelligent about exactly what their viewers are doing on a second by second basis. If you are seeing something that you don't like, that's because there's a lot of people who, are not you that like it. So it's changed, I think, the experience of being a sports fan where you

are constantly bombarded by reminders that you should be gambling. Other people are gambling. There's a new way to gamble. By the way, there's a free bet. Sports is infused with, drenched with, you could say, the ethos of gambling. That's one way, I think, that it's clearly changed. I'm sure it's also changed the economics of the valuation of the leagues and the teams. You described the way that sports gambling can affect the bottom line of the leagues. But what's the actual effect? Like, are the leagues just much bigger and richer now because of all the sports gambling? The short answer is yes.

The long answer is also yes. I think there's this new pot of money. As I said, the concerns about viewership have been sort of mollified, at least in the short term, because the arrow is sort of back upwards. Again, we assume thanks to gambling. Of course, these producers know and they won't tell us. And I'm no insider on these things, but the sale prices of some of the NBA teams recently

seem to reflect, we thought we're going to reflect expansion. And I'm literally just like, all my knowledge on this is literally from the Bill Simmons podcast, so he can, if I'm wrong, I'm sorry. But we thought it was going to sort of reflect the possibility that there'd be expansion teams in the NBA, and that would sort of inject new viewership and inject new cities. and just be a whole new lump sum of money into NBA owner's pockets.

But maybe that's not happening, and maybe it's not happening because of gambling, and because there's all this sort of this other pot of money that they've sort of stumbled into effectively that's out there that is, again, not only driving viewership, but driving engagement with their product, and not to mention increasing ad sales and so on. You know, the casinoification of the economy right now is something that a lot of commentators are touching on. Kyla Scanlan, who's a mutual friend of ours, wonderful economic commentator with a YouTube presence and TikTok and subs to actually spend on this show, has talked about the financial nihilism of young people these days. They feel like homes are so expensive and the American dream is so out of reach that they might as well, young people might as well, just make a bunch of hundred part parles every single weekend in the hopes that they wind up winning the lottery and that lottery jackpot allowed. them to afford the house that they want to buy. You've written that if it feels like gambling is

everywhere, it's because it is, right? Today's gamblers are young men on their smartphones, placing bets on the Baltimore Ravens, John, like you last night. It's people investing in crypto. It's meme coins. It's the ability to bet on virtually anything from one's investment account these days with Robin Hood and other platforms. Maybe can you speak to the degree to which you feel like this sports gambling phenomenon really is just one pillar. of a larger temple. And that temple is this sort of casino mindset that has taken over American capitalism.

Yeah, well, you might be familiar. British historian Susan Strange wrote this book in 1986 called Casino Capitalism. She was thinking about, like, I just listened to your Michael Lewis episode. I think she was thinking about sort of the Liars Poker Wall Street world, not knowing that by 2025 we'd have just like literal casino capitalism

and like every app and every part of capitalism would just like become a not metaphorical, literal casino. know. Yeah, I think sports spending is in many ways the most prominent example because sports is so popular and because sports provides such an elevated platform. But sports betting is just another example of the risky bets that young people especially are sort of prone to or inclined to or have chosen to make, both because of their economic situation and both, I don't want to use this word, but that they've sort of been groomed for in many respects. They're sort of used, like children,

like eight-year-old children are like basically betting on slot machines through roadblocks. They're sort of slot machine. There are various video game mechanics like boot boxes that are basically gambling that people have been playing since they were 12 or younger. And so I don't think we should be surprised, not to mention all of these sort of economic precarity context that you describe for young people, especially who might as well gamble to make money, but they've also been acculturated, socialized to gambling, both quite

literally through their radio games, but that also the Murphy decision, the Supreme Court decision, was now seven years ago. So there are 18-year-olds who don't remember baseball without a seven-thending stretch brought to you by Fandul. So not to sort of refocus now on sports betting when I promised I was going to sort of talk more broadly about the economy, but I don't think we should be surprised that young people sort of ended up so interested in gambling and so willing to gamble and that you're right. For some people, it's because they like sports, so gravitated sports betting, the rise of crypto, the rise of day trading, and so on speaks to not even like sort of the new cultural acceptance of gambling and the new place of gambling sort of culturally in American

society. But then I would also add, as I'm sure you would, the change in technology that has made it all available and made it all possible. Yeah, the only thing that I disagree with in that answer, and it's maybe the only thing that you've said in the show yet that I even moderately disagree with is the idea that this is mostly about a matter of grooming. Like maybe there is an element of grooming. But I also think that one reason why I find this story very interesting is that it clicks into a larger theme that we've explored in a bunch of episodes on this show, which is that we have just gotten so much better at making entertainment more entertaining.

Like, Instagram is objectively better than a 1970s magazine. It is. It's just more engaging. And when I say better, I mean more engaging. care. This is this is not about virtue. Tick-Tock is more engaging than local news. Monday night football plus Fandul is more entertaining than just watching Monday night football without any cent or dollar riding on an outcome. And this is just a fact to reckon with. Like the world is more entertaining than it's ever been. And this is having all sorts of downstream effects. It's keeping us

locked to our phones. It's keeping us homebound. It's keeping us from seeing other people. I don't think entertainment is a virtue. I don't think there's any philosophical tradition that says that maximal entertainment is the thing that we should like devote our lives to. In fact, there's a lot of very deep religious and philosophical traditions that say that we should do, we should be quite disciplined about not making entertainment, the centerpiece of our life. But one thing we're just pointing to is the fact that like sports gambling is just really damn fun. It's just really fun. And some people find a way to incorporate that fun into their lives in a way that is more or less disciplined and doesn't affect their credit score, and some people for whatever reason, circumstance,

biology, bad luck wind up in a situation where the fund they have becomes catastrophic for their personal finances and for their lives. And I want to make sure that we end on a message of reform because, you know, there's sort of two models that I see here. One is a public health model that treats gambling the way we might treat, and I'm interested in your analysis. And I'm interested in your analogy here. Cigarettes, alcohol, marijuana, Doritos. All these things are legal to a certain extent in most states, but I think we agree that all of them consumed without care or finitude is bad for us. And then there's also an opposing sort of industry model that says, no, regulation should be the job of the individual, right? It's up to you to take yourself away from

the app. What's your idea for solving the problems with legal sports gambling that you articulated at the top of the show? So my, so there's no silver bullet, and yet I'm going to offer what to me is like the closest thing we have to a silver bullet, which is, which is a little bit wonkish and sort of the technocratic, the policy stuff is going to flow downstream of this. But my, what I would want to see is a regulatory environment that is not set up to maximize, revenue from sports betting. Because all we have now for the sports betting companies are incentives to be extractive and to make as much money as quickly as possible from as many people as possible. Player safety be damned. They're in a cutthroat competitive race. They owe a lot of accountability to

stockholders. They're all salivating at the prospect that California and Texas are going to legalize sports gambling soon. And they just want to be the biggest companies they can be and get the most money from as many people as possible as quickly as possible before that happens to sort of lock in their incumbency advantages. So that being said, the regulatory environment is ill-suited. We talked about sort of the problems or the ways that the sports gambling got their fingers in the pie from the jump. But the closest thing, again, I have to a silver bullet is to change the mandate of the

regulators, to change the mandate of the regulators of sports betting. For example, the Maryland Lottery and Gaming Control Agency, one of its official, goals is to support state government and good causes by maximizing sports betting contributions. I would rewrite that slightly to say support state government and good causes and ensure the safety of Marylanders or Marylandians while also allowing them to gamble on sports. So that to me, that singular change would lead to all these downstream effects. And my main downstream effect that I want is to instill this idea of friction in the app, are these speed bumps that would slow down someone like Kyle from gambling $20 on the NBA here

to all of a sudden he's up in the middle night gambling on minor league British darts. I love the overall idea of saying there's just a paradigm shift that we need from, let's make sure that we maximize revenue from legal gambling so that it helps state coffers to let's consider state gambling a kind of syntax. where that's an S-I-N-S-I-N-S-T-A-X, not the grammar word, a syntax where we recognize that this is a source of revenue for the state,

and we also recognize that the underlying product is not good for many of its consumers. So once we adopt that as a new paradigm, that this is something that should be legal, but should also be regulated under a new paradigm, what are some of the speed bumps that you would want to introduce to these apps? Because right now, I think these apps are a little bit like a highway or an auto bond with like a hundred mile per hour speed limits.

You want to add friction. You want to add speed bumps. What are these particular speed bumps you would like to see added to these apps? Yeah. So a couple things. The first is to get rid of these insane betting markets on things like minor league British darts, Malaysian women's doubles, badminton, or even the ability to bet on the speed of the next pitch in a baseball game or the serve in a tennis match. All of those things are meant to mimic sort of the slot machine phenomenon. or maybe even the TikTok

smooth brain dopamine delivery phenomenon of just keeping you engaged on the app for as long as possible. And they don't want you to bet on the Ravens game and then wait three hours for the bet to resolve. They want you to bet and then bet 15 seconds later or bet on the next pitch

in the World Series and so on. So getting rid of some of those which are not actually big money makers, but are trap doors for people with gambling addictions that are just ways for them to channel their gambling addiction. Another big category related to friction would be the ease with which people can get money into the app and then out of the app.

I think there should be a limit. I don't know if it's with for a certain number in a day, a certain number in a week, but you can only deposit money a certain number of times or maybe you deposit money. It sits in a cooler for 24 hours before you can gamble with it to end this loss chasing phenomenon where you bet $10 you lose. I'm so mad. I'm going to double down. I'm going to try to get it back.

Oh, I've lost. Oh, actually the MLB is over for tonight. all right, fine, I'm going to go to check table tennis. Oh, shoot, I lost there, too. I'm going to go to Dutch handball. Oh, shoot. And all of a sudden, like, $1,500 later, like, what does the hell just happen to you? So that's, and then not to mention the ease with which you could get money out, right?

Which is, once you decide you do want to quit, the money sort of appears in your bank account instantaneously, more or less. So that, that to me, those to me are sort of the big ones that seem like pretty low-hanging fruit, honestly, and that any sort of reasonable regular. regulator would want to instill anyway. I know that integrity of the game is not your primary interest, but I also wonder if you have ideas for reforming these betting markets in a way that would make the scandals of last week less likely.

You know, I think one thing a lot of people are talking about is like, why is it even possible to bet over-unders for Terry Rozier, like that, or the sixth and seventh man from the Milwaukee bucks in an 11 p.m. game. The 15th man on the Toronto Raptors, which is who John Dick Porter was. Yeah, right. Why are we allowing people to put thousands, sometimes tens of thousands of dollars on outcomes for players who are only making maybe a few million dollars and therefore we have like a greater incentive to get locked into co-conspirator relationships where they can make $10 million working with an illegal better? So, I mean, do you have ideas for reforming these apps in a way that makes these sort of integrity of the game scandals less likely? Yeah, and I'll just say the player props, as much as people have turned on them now for the NBA are way worse for college basketball and for college sports.

Where these are not athletes who make $26 million a year like Tara Rozier, these are like a 19-year-old who lives in the dorm room next door to you. And like how easy it would be to have a co-conspirator living in your dorm. So I don't think it's realistic or in fact desirable to like get rid of player props or you can only bet on the over-player props. You can't bet on the under. I don't mean to sound doom and gloom, but doing something about player props, doing something about what are called microbet, so you know the speed of the next pitch

or whether the next pitch will be a ball or strike, for example. That seems pretty easy when it comes to reform. I'm not saying get rid of props again, but doing some reform there. I actually did like Bill Simmons's idea, for example, you can only bet player props for like all-star caliber players or like there's sort of a select menu of players that you can gamble, that you can bet props on,

but you can't do it on the Terry Rozier's, the John DePorters of the world. I did like that idea. And the problem with props and with microbats, with the speed of the next pitch, is too much agency for a single player, too much control that a single player has over the outcome of that bet

that sort of threatens league integrity. And I don't want to sound all doom and gloom, but when it comes to integrity at a broader level for something like the outcome of an NFL game, I'm not sure it's possible to like really, really police the integrity in a way that we will be 100 or a thousand percent confident that the games are on the level. My nightmare scenario is like the long snapper on a team is on the take, maybe a college team. They might not decide the game, but they might. And like a better can

be confident that if it were to come down to a field goal, the field goal will be botched. And all you'd have to do is to gamble on the team to win. And that money would be sort of invisible in the broader context of all the people who are gambling on Monday night football. so you would never know that that bet, this one better over here that $100,000 had inside information. So good luck. Like, I don't mean to suggest that this is already happening, but that to me is like the player props and the micro bets,

okay, I understand wanting to reform there, but I actually don't know from a league integrity perspective if we can ever get to 100% with universally available sports betting. Right. And that's where if the league can't necessarily police it, you're essentially relying on the FBI to police it, right? You're essentially saying there's no way that we can eliminate this kind of like the long snapper, you know, just shooting the ball right over the punter's head or something.

What we can have is the FBI making an enormously big stink about catching a few celebrity athletes in its first drag net and saying if you, you know, long snapper of the future, even try to get involved with the co-conspirator or mafioso network, trust me, we will make the rest of your life a living hell. That's where essentially you're trying to inject morality into the individual by having the FBI do a huge big scare tactic. But that's also hard. I mean, to your point, like, people have been cheating for 100 years and it had, for a thousand years, we just happened to have a famous one in 1919. And it's very unlikely that any particular regime of legal or illegal gambling or FBI investigation is going to entirely eliminate

cheating from sports. But there must be better ways to do it. do it. And I really appreciate the fact that you've put so much time and energy into understanding how we got to hear, how history could have unfolded in a way that was better, and how we can still make gambling safer and more moral. John Cohen, thank you very much. Thanks, Derek. Good luck. Thank you for listening. Plain English is produced by Devin Beraldi, and we are back to our twice-a-week schedule. We'll talk to you soon.