The Journal. - How a Psychiatrist Lost $400,000 on Gambling Apps

Episode Date: March 15, 2024

In November 2022, Kavita Fischer downloaded a casino app from DraftKings, one of the top online betting companies in the U.S. Kavita was looking for relief from the stress of a recent divorce and the isolation of working from home during the pandemic. In less than a year, Kavita gambled away hundreds of thousands of dollars. We speak to Kavita and to WSJ’s Katherine Sayre about how online betting companies keep customers coming back by giving them bonus credits and VIP treatment.  Further Reading: - A Psychiatrist Tried to Quit Gambling. Betting Apps Kept Her Hooked.  Further Listening: - Disney Gets Into Gambling   Learn more about your ad choices. Visit megaphone.fm/adchoices

Kavita Fisher is 41 years old. She's a mother of two, and she lives in the quiet Pittsburgh suburb of Mount Lebanon. There's a dog. Hello. Last week, I paid her a visit. Hi, I'm Kate. I'm Veda. Nice to meet you.

Her home sits on a cul-de-sac, overlooking tree-covered hills. I redid a lot of this house when I moved in. Like, this was all carpet when I moved in, and it was like this ugly yellow color. Yeah. So I had it all painted. It's gorgeous. Kavita is a psychiatrist, and she focuses on addiction.

What interests you about it? And she focuses on addiction. What interests you about it? Just the ability for people to change and the impact on the brain of addiction that a lot of people don't realize how much of a disease it can be. What is addiction? It's a process in which our brains become used to something that they can't, that it can't get away from in the most simplest sense. Despite knowing that it's not healthy or knowing that it's affecting your life, it's a process that you just, people really struggle with. As a medical professional, Kavita knows how to fight addiction.

But over the last year and a half, she's come to know addiction much more intimately. I went into this field to kind of understand the mysteries of the brain, and I became my own mystery at that point. Since the fall of 2022, Kavita has struggled

with addiction herself. An addiction to gambling. Kavita gambled away hundreds of thousands of dollars in less than a year, leaving her with a debt that she says will take 15 years to pay off. And she did it not at a casino, but on her phone,

using gambling apps that bring games like slots and blackjack to your pocket. Kavita tried numerous times to quit, but the apps kept pulling her back in. Welcome to The Journal, our show about money, business, and power. I'm Kate Leinbaugh. It's Friday, March 15th. Coming up on the show, one woman's costly struggle to break her addiction to online gambling. No. Some wine? Yes. Get almost, almost anything delivered with Uber Eats. Order now. Alcohol in select markets. See app for details. As a kid, Kavita remembers visiting her family in India. They would get together to play a game. In India, there's a card game called dinpati, which is basically three-card poker. And so we used to do it as a family.

And I think that's what I enjoyed so much about it was that whole social, like, 20 or 25 of us gathered in one room just enjoying each other's company. And we played with rupees, which are about one penny. And I won. I believe I won a whole dollar or something that day. But I've always been competitive when it comes to games, so the winning part wasn't about the money, but winning. As an adult, Kavita gambled on occasion. She'd visit a casino with her friends and set a budget,

a hundred bucks to pay for food, drinks, and craps games. But her relationship to gambling changed in the years after the pandemic when Kavita was working from home. There was kind of this term that everybody used, which was the new normal, and I hated that term, absolutely hated it. I just wanted things to kind of go back to where they were.

I didn't like working from home. She felt isolated. And in the fall of 2022, she had a lot on her plate. She'd just turned 40, her dog was sick, and she was dealing with a recent divorce. So she looked for an outlet. One day I wanted that kind of social feel. So I downloaded a local casino's online app to play craps. That was the purpose of doing it, because I found out that you could play with a live dealer, and it kind of felt like you were there. So that's when I downloaded my first app.

Online gambling is legal in six states, including Pennsylvania. And so I played after the kids went to bed, or if they were at their dad's house. And it started off innocent, maybe 30 bucks here, 30 bucks there. And I remember the first number I got to in terms of debt was $2,500. And I remember thinking, I can't believe I lost $2,500. I have to make that up somehow. I have to make that up somehow. Kavita says she wanted to get her $2,500 back and then quit.

So she came up with a strategy to do it. She set a daily goal. Every day, she'd try to win $30 to slowly chip away at her loss. After winning the $30, she told herself she'd stop playing for the day. But it didn't work. She kept gambling. And eventually, she switched to a new app, one from a company called DraftKings. While DraftKings is best known for online sports betting, Kavita was drawn to its casino games.

DraftKings was interesting. They gave out a lot of bonuses early on. There were a lot more contests you could do. It was just overall more of an engaging platform. What did that look like? Like you're in bed and there's like pop-ups that are like, join this thing? Kind of, yeah. Like after a game, you'll see something else pop up on the top like,

try this game for free or do this for this contest or get your or now starting a credit back event where you can get some of your money back in the next 24 hours we'll give you 30 of your losses back that kind of thing but at that point i wasn't playing craps anymore. I started with craps, and then I moved on to slot games. Like, they kind of lured me in. Those were the games that they would offer you to play for free. Just try it out. Play for free. DraftKings has declined to comment on Kavita's story. The company's chief compliance officer said, quote,

DraftKings is committed to the highest standards of consumer protections and responsible gaming. The company's chief compliance officer said, quote, Kavita's losses grew, a fact that she didn't share with anyone. She just kept on living her life, taking her kids to soccer practice and working her job. During the day, were you craving gambling? her job. During the day, were you craving gambling? At some point, yeah, but I had to really avoid my phone. I would put it in a different room so I wouldn't even go near it during work or when the kids were around. And then you'd put your kids to bed? And then it could be anywhere from 9 p.m. to midnight, or there were times where if I lost and I would keep chasing my losses till four in the morning, 5 in the morning. Were you, like, chasing the money, or is it dopamine, or, like, what is happening?

I mean, receptors become desensitized. They need more and more of that hit or that rush feeling to get that same sort of pleasurable effect. So that's why people often gamble longer periods and with more money to kind of get that same effect. By the end of the year, Kavita's losses had gotten a lot bigger. I jumped up from $2,500 to probably $200,000 by the end of the year. Wow. That's fast. Yeah. To fund her gambling, Kavita used her credit cards and tapped into her savings. And at that time, she had a really high credit score. So she started taking out loans.

I got a $100,000 personal loan just to have some extra money. I don't even think I needed it at that time. And I ended up using that entire loan for gambling, essentially. And I kept thinking, if I keep going this way, this route, I'm not going to be able to pay back these loans. Because I had a monthly payment on each loan, I thought to myself, I need to stop. But while Kavita told herself she needed to stop, DraftKings tried to keep her gambling. After losing thousands of dollars, Kavita got an email from DraftKings in December 2022. It said, congratulations. She was now a DraftKings VIP. VIP programs are intensely important to these companies.

— That's our colleague, Catherine Sayre. She's been following Kavita's story for months, looking through her financial records and emails. Catherine wanted to find out how companies like DraftKings interact with their biggest gamblers. — They're identifying the people who are spending the most or have the potential to spend the most and using bonuses and personal relationships to really fuel this spending. When you say they're identifying people,

who are these people? When we talk about the biggest gamblers, it's not necessarily someone who's immediately dropping hundreds of thousands of dollars. It's not exactly like, you know, what they call a whale in Las Vegas who gets a private jet to fly them in and drop a million dollars on a weekend, right?

VIPs can be people who are spending thousands, tens of thousands of dollars. They're just identified as having some sort of potential for the company. To manage its VIPs, DraftKings employs VIP hosts. It's their job to build a relationship with VIP gamblers. So if I've spent a certain amount of money that gets the attention of an online gambling company, I might hear from a VIP host who says, hey, here's my name. I'm going to be your host moving forward.

Let me know what kind of games you like to play. Let me know what your favorite sports are. I'm going to check in occasionally. Here's a $500 bonus as an introduction to me. You can go spend this free $500 to keep going. Are VIP hosts unique to online gambling? VIP hosts are not unique to online gambling. These relationships have been around for a very long time with casinos. So you

could be a whale who's flying in to drop a few million dollars over a weekend. They have a host who checks in with them while they're there, make sure their meals are being comped, that kind of thing. And so in the world of online gambling, what exactly do these VIP hosts do? Someone may slow down on their online gambling a bit and hosts will reach out and say, hey, haven't seen you in a while. Here's a thousand bucks if you want to keep going. And someone may say, hey, I'll come back and then start depositing their own money again as well. And, you know, just like the name implies, VIP, this is designed to make people feel really important. But ultimately, who are the VIPs with these companies?

They're the biggest losers. They're the ones losing the most money. Kavita wanted to quit gambling in 2023. But after DraftKings made her a VIP, she says she was pulled in by the promise of bonuses. She figured that she could use the bonuses to win back her losses. After that initial email in December,

Kavita and her host kept in close touch. Over the next four months, they exchanged dozens of emails, sometimes daily. And he would offer bonuses or I would ask for a bonus if I didn't do well. And usually he would give me whatever bonus I wanted. And he was online most of the time. Yeah, he seemed to know when I was playing as well. He could tell when I was playing and how much I played.

In January, Kavita emailed her DraftKings host to say she was doing terribly and that she wanted to try a different game or quit gambling completely. But Kavita also asked her host

for another bonus. She wrote, Is there any way you could send me some VIP love? In response, her host added $500 to her account and wished her luck, writing, quote, Hope you can get hot. Did you feel like the app was trying to incentivize you to keep playing? Like, did you sort of see the deal?

I could tell that, you know, there were times when I wanted to quit, but I knew that I had a bonus or some cash back from a tournament coming up in a few days, so I had to wait till then to quit. And then I would get lured into a different bonus, and I would kind of just keep extending my quit date. Interesting. So the bonuses, they tell you you had a bonus, but it wouldn't hit immediately. So it keeps you in the universe until you get it. Correct. It almost felt like it wasn't real. Like no way would I ever imagine myself,

even during that time, walking into a casino and taking out 10 grand from my account and throwing it on a table. There's no way. But it just didn't feel real on the app. Like all you do is click a few things to get money transferred over. There's no rationality that remains when you're doing it online compared to if you're in a live casino handling real cash. But in the months that followed, Kavita's relationship with DraftKings would sour.

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In March last year, Kavita was still gambling and asking her DraftKings VIP host for more bonuses. But she was also telling herself she should quit. And at that time, her then-boyfriend took her on a trip to Cancun for vacation. I remember gambling in the airplane up until the point where it said, now you're out of Pittsburgh, or the service went dead, or you had to put on airplane mode. And was your boyfriend like,

could you stop that and pay attention to me? Probably. When she got to Cancun, Kavita couldn't gamble because she was out of state. But she kept in touch with her VIP host over email. She told him that she was worried about her finances. It's a strange request. Does DK ever give small loans to Onyx VIPs?

So Onyx is like the highest status a VIP can get. My big issue is I'm in Mexico and cannot play, but I'm short on my mortgage by $1,200 because it was taken out earlier than usual. Probably means I need to quit gambling soon also. Just ignore if not possible. Thanks, Vida. So he replied, Hi Vida, hope you're having a great time in Mexico. Unfortunately, that is not something we can do. More importantly, I want to check in with you. Are you still playing with your means or budget? We take responsible gaming very seriously here and never want someone to play outside their comfort zone. And so then he had asked, can you respond to me saying you're playing within your means? The host also pointed Kavita to tools in the DraftKings app that she could use to limit her gambling.

After returning home, Kavita told her host that she was gambling within her means. And he responded by giving her a $250 credit to, quote, get you back in action. Kavita kept playing and kept losing. She took out more loans and used credit cards with interest rates as high as 33%. She also took out a home equity loan for almost $250,000.

And at the same time, she was trying to break the cycle. She'd impose limits on her betting through tools on the DraftKings app, like spending caps or a temporary block. But when those restrictions lifted, she'd start gambling again. Kavita had also tried to enroll in a program managed by the state of Pennsylvania, where people can ask to be banned from gambling. But when she tried to sign up, she says it didn't work. So that was a terrible process. I tried about three times. I tried it over my phone,

I tried it over my computer, and each time it would say error at the end. So I would say, oh, I'll try another time then. So this was obviously a big, this took a course of about three months and probably hundreds of thousands of dollars or tens of thousands of dollars more that I went to in debt because I continued to gamble. A spokesman for the agency that runs the program said they respond when people have trouble signing up. In April, Kavita's DraftKings host told her there were changes and he would no longer be her host. So she reached out to get a new one.

When someone from the company responded, she asked them for a bonus. And then he said, after reviewing your account, our internal team has determined you are not eligible for a host at the moment. A host will contact you directly once you become eligible. And then I asked, why am I ineligible?

And they said, there are various factors that go into whether or not a player is hosted. Regrettably, we are not able to go into the details that go into this decision. Kavita demanded that DraftKings close her account. She was frustrated. And then I wrote, I also want to file a complaint. It should have been obvious to my VIP host that I was struggling from compulsive gambling. As he could see the time I spent on the app,

I would like this addressed ASAP. Kavita also asked to be reimbursed for a portion of her losses. But in an email, she was told she couldn't get a refund. The email included phone numbers for gambling hotlines and links to gambling addiction websites. In the first four months of 2023, Kavita had lost about $141,000 to DraftKings. During that time, DraftKings gave her more than $36,000 in gambling credits. Kavita switched to other apps.

And that summer, she hit a hot streak. Again, one of those times where I said, this is it, my final, I put in $750, because at that point it wasn't $20 or $30. I was up to putting in $750 because at that point it wasn't 20 or 30 bucks. I was up to putting in 750 or a thousand whenever I played. And that $750 over the course of one or two days, somehow I turned it into $480,000. $480,000. Yep. That would have paid back my second mortgage, all my loans, my retirement loan, and I would have had some left over to stock my savings account back up.

But guess what happened? You kept going. Yeah. Once you get that far, you think, oh, maybe I can turn that half a million into a million and retire easily or do something. Open up a side business, like a coffee shop, like the thoughts that came into my mind, or take my relatives on vacation or my friends on vacation. And I kept going. Kavita tried to withdraw her winnings along the way. She got about $50,000 out. But before other withdrawals went through, she canceled them.

I would reverse the withdrawal to try to make more. And in the end, I was left with almost nothing. Even the $40,000 or $50,000 I took out, I ended up using it in the future on a different app. Do you blame yourself? Do you blame the apps, the companies? How do you, where does responsibility lie? I think it was a perfect storm.

Of course I take responsibility. I was the one who chose to download that first app. who chose to download that first app. But I also feel like there's so much more that I understand now of how I was kept gambling when I wanted to quit. There were so many times when I wanted to quit and I couldn't because the industry kept luring me back in, essentially.

In August, Kavita applied again to the state to be banned from gambling. In an automated email, the state agency said there were discrepancies in her information, so her request was denied. A week later, she tried again, and she wrote, quote, I have attempted to self-exclude now for the fourth time. Please let me know if you need anything else from me. Pennsylvania online gambling has wrecked my life. Finally, the self-exclusion application went through. On August 14, 2023, Kavita was banned from gambling in Pennsylvania.

In total, Kavita lost more than $400,000 to her gambling addiction. Now, she's deeply in debt. Each month, she pays almost $5,000 in loan repayments. And she's taken on a second job. How unique is Kavita's story? Unfortunately, Kavita's story is not unique. She's unique in that she had the courage to come out and tell her story. Understandably, there are people who are in her position who don't want to speak publicly. They may have been hiding this debt from a spouse, even in some cases stolen money to fuel these addictions, or just generally are in over their heads and in a real emotional crisis. So, you know, I've spoken

with people. I know that Kavita is not unique and that there's some real harm playing out right now outside of public view. That's our colleague Catherine again. There's a huge risk for problem gambling. You talk about online betting. You're sitting at home, you're watching a game, you're betting live on the next play, on who's going to win, or you're opening it up to play some slots at night. It's just more accessible and therefore carries a higher risk. And this has been part of the online gambling debate over the last few years about whether companies are really doing their best to mitigate this. Who's responsible?

Because Kavita keeps opting in. I mean, I feel like the companies would say, like, you know, you're a responsible adult. It's up to you to know your limits. It's a good question. I think you look at how we regulate potentially addictive products. And that's the problem the industry is facing right now is how much are these companies

currently being held accountable? How far does someone have to go down a spiral like this before they get some kind of intervention? It's sort of an open question right now that doesn't have a lot of easy answers. doesn't have a lot of easy answers. Last year, Kavita went to her first Gamblers Anonymous meeting. And I walk into this room and there's about 30 people there. And I just remember being so emotional, thinking, oh my gosh, I'm not alone. And you told your story there?

I didn't get into the amount of detail, but I was able to open up for the first time to somebody other than my family or friends. What did it feel like? A lot of relief that I wasn't alone. And, you know, the people in the room were from all walks of life, all, you know, women, men, different age groups,

different industries. That really was in some ways relief, too, that, you know, this really could happen to anyone. I think I blamed myself less after that. It's been 25 days since Kavita last gambled. If you're struggling with gambling addiction, call the National Problem Gambling Helpline at 1-800-GAMBLER or 1-800-426-2537. That's all for today, Friday, March 15th.

The Journal is a co-production of Spotify and The Wall Street Journal. The show is made by Annie Baxter, Katherine Brewer, Maria Byrne, Victoria Dominguez, Pia Gadkari, Rachel Humphries, Ryan Knudsen, Matt Kwong, Jessica Mendoza, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez-Espinosa, Heather Rogers, Our engineers are Our theme music is by So Wiley. Additional music this week from Fact-checking by Mary Mathis. Thanks for listening. See you Monday.