What A Day - How We Got Here: How Sports Betting Took Over America

Episode Date: February 10, 2024

It’s Week 2 of What a Day’s new series “How We Got Here,” in which Hysteria’s Erin Ryan and Offline’s Max Fisher pose a question about the week’s biggest headlines and comb through history to answer it. This week, they dive into the enemies-to-lovers story of the NFL and sports betting. Why did professional sports leagues disavow gambling for so long? How did the NFL go from hating Vegas to hosting a Super Bowl there? And who cares what color gatorade they dump on the field this Sunday? (Spoiler alert: MANY people!)

Max, I don't know if you've seen these numbers, but they're saying that Americans will gamble $23 billion on the Super Bowl this weekend. Whoa. $23 billion for one game. That is way up from last year, which was up from the year before that. Bets on the Super Bowl alone are now worth several billion dollars more than the combined revenue of every NFL team for all of 2022. What's wild to me about this is that the NFL is so cool with gambling these days that they're having the Super Bowl in Las Vegas. And it's weird to me because I feel like for my entire life, Sin City and the NFL went together like all-you-can-eat crab legs in the 40-yard dash. And most sports gambling was illegal. I don't really understand what happened.

Well, this week, we're going to talk about the story of how that all changed. How despite resistance, fate brought the NFL and gambling to the altar like the two main characters in a screwball rom-com. I'm Erin Ryan. This is How We Got Here, a new What A Day series where Max and I explore a big question behind the week's headlines and tell a story that answers that question. I'm Max Fisher. And our question this week, how in just the last few years did the NFL go from hating sports gambling to embracing it so fully that the Super Bowl is in Vegas? There are wall-to-wall online gambling ads during every football game, and Americans

placed $100 billion in legal sports bets last year. The NFL and gambling, Erin, sitting in a tree, K-A-S-S-I-N-G? Exactly. None of it would have been possible without one brave little lobbyist and a guy named Chris Christie. I don't know if the lobbyist is physically small. I just like to imagine him- It's good for our story. Like if John Grisham was doing kids' books. I like to imagine him the main character of like John Grisham for kids. The story I want to tell you is about this guy, this lobbyist, who was

actually best known for repping satellite TV companies and how he finally brought the long standing wink, wink, nudge, nudge relationship between football and legal sports gambling to an end. Max, do you remember this ad? It is a woman wearing what can be described as a going out top getting into a limousine. Giant hoop earrings. This is a 2001 going out outfit. She's acting like she's on like shrooms or acid or something. Rubbing back the driver's head. She's having a great time. Now she's being let out of the limo. She's buttoned up wearing a business outfit and she's on the phone. And now she's going into the airport. Oh, I remember this. That's the tagline. What happens here stays here. Exactly. It presents Las Vegas as this kind of no rules

playground for cool adults. It's from like 20 years ago, right? It's from the early 2000s. And the ad was for the Las Vegas Convention and Visitors Bureau. And it was supposed to air during the Super Bowl. But it was rejected. It was rejected. It doesn't mention football. By the NFL. Yeah, by the NFL.

It doesn't mention football. It doesn't mention the NFL. It doesn't mention gambling. It wasn't rejected because it was like Y2K era cringe. It was because the NFL wanted nothing to do with gambling or Las Vegas and Max around the same time. So hotel casinos in Las Vegas are throwing Super Bowl parties. A lot of places have Super Bowl parties. They got cease and desist letters from the NFL. Wow. Because the NFL didn't want it to seem like casinos had anything officially to do with football. So the NFL was so opposed to any association with legal sports betting that they're sending letters to any hotel in Las Vegas that is even having like some people over to watch the game.

That's crazy. Yeah. That's why you see things like the big game. Come over for the big game. Because Super Bowl. To like get around. So, okay, but why? Like why was football so opposed to legal sports gambling?

So in 2012, Commissioner Roger Goodell explained why. He'd been testifying at a federal trial to keep sports gambling illegal in most of the country. Which means we don't have a clip because it was a federal deposition. But we do have one better. Our producer Austin doing his best Roger Goodell impression. If gambling is permitted freely on sporting events, normal incidents of the game, such as bad snaps, dropped passes, turnovers, penalties, and play calling, inevitably will fuel speculation, distrust, and accusations of point shaving or even game fixing. So, look, here's the thing. The NFL has had such a longstanding tie to gambling. Check out this clip from a 1983 episode of Frontline entitled An Unauthorized History of the NFL.

Charlie Parsons, FBI special agent in Las Vegas. Well, sports bookmaking in general for years has been considered the number one source of income for the mafia, the syndicate, the outfit. $22 billion was bet on sports gambling in the United States. That was in September of 1980. Since that time, there have been figures up to $25 billion and higher. Out of sports bookmaking, pro football is king. It's number one by far as far as the amounts of money is wagered. If this episode were a person, it would be entering middle age.

Like that is how long this was like an un... It was just like the NFL was like, no, we want nothing to do with gambling. And gambling was like, we've got a lot to do with you, NFL. So there's this kind of secret relationship between them? It's only secret from the perspective of the NFL that willfully puts on blinders. But the league had a lot of teams that were founded by literal gamblers, like Charles Bridwell Sr., who founded the Chicago Cardinals and also helped finance the Chicago Bears, was a former bootlegger and pals with Al Capone.

Oh, wow. Yeah. The guy who founded the Steelers, Art Rooney, the Rooney family still does control and own the Steelers, was a racetrack owner. Whoa. Yeah. So there's a lot of ties between people with links to gambling and kind of like the upper tiers of the NFL, even though the NFL is so opposed to legalized sports gambling.

Exactly. Well, Eddie DiBartolo, who was the former 49ers owner NFL, even though the NFL is so opposed to legalized sports gambling. Exactly. Well, Eddie DiBartolo, who was the former 49ers owner, will be seeing the 49ers on Sunday in the Super Bowl, if you're watching. Eddie DiBartolo had to pass ownership of the team to his sister because he had bribed the governor of Louisiana $400,000 for a riverboat gambling license. But then he was later pardoned by President Donald Trump. So like gambling in the NFL, just they've been together for so long, but the NFL doesn't want to acknowledge it. So their gambling in the NFL are kind of like Jim and Pam in the first few seasons of The Office, pretending not to like each other. Gambling is John Cusack with a boombox outside of the NFL's house in your eyes. But you know, gambling was a dirty business back

then, and it was well known to be controlled by the mafia. And Vegas had a reputation that was kind of inextricably linked to the mafia. It was like the place where the underworld poked its head out and not a place for respectable people to hang out. Certainly not the place for like the lady in the limousine from the ad to go. But sports leagues were concerned with the appearance of integrity in sports. So like Commissioner Goodell said, if people are gambling on the outcome of games, then they're going to be people trying to influence the outcome of games by paying off coaches, players, and officials. So that's the biggest fear here. So even though football has all of these ties to illegal gambling, has all these ties to other forms of gambling, the league's official position

is that they want to keep sports betting illegal in most of the country because there's a concern that allowing illegal sports betting could lead to something like a game-fixing scandal that would so compromise people's perceptions of the integrity of the league that the whole thing could collapse. Exactly. And in 1946, something kind of happened along those lines. Some gamblers tried to pay off a couple players from the New York Giants before the National Football League championship between the Giants and the Chicago Bears.

The Giants players didn't tell anybody that that had happened, that they'd been approached and they'd been offered to throw the game for a lot of money because people were very, very mad that the Giants players didn't tell anybody the game was played anyway. So that illusion even of a possibility of impropriety really shakes people's faith in the game that they're watching. And, you know, the NFL has also had to fight off the fact that players still are engaging in gambling despite these rules. In 1969, the Jets quarterback, Broadway Joe Namath, who was a real fun character. I kind of wish he was like, you know, I kind of wish he was still

like, if there was a way to like time capsule him into the present day, he just seemed like a real entertaining guy. So Namath part owned a restaurant in Manhattan that it was revealed was a hangout for like gangsters and gamblers and stuff. And league commissioner Rizal found out about it and told him he had to sell his stake in this restaurant or retire from football. Now Namath was 26 years old at the time and had like five months ago been named Super Bowl MVP. So he was like a Patrick Mahomes. Like he was flying high. And he called the bluff of the NFL commissioner and announced tearfully during a press conference

that he was retiring rather than selling his stake in this. He later on retired, which was probably the smart call, be a legendary quarterback in the NFL versus own a restaurant. One seems a little bit more profitable than another. So, yeah, there have been other scandals. There have been Paul Hornig from the Packers and Alex Karras of the Lions were both suspended for associating with quote known hoodlums. And there was also a period of time when like a real former illegal sports bookie with a felony conviction was the co-host of NFL Today on CBS. Oh, this is Jimmy the Greek, right? Yes, Jimmy the Greek.

He was later granted a presidential pardon. So he was not a felon. He was illegal bookmaking. He was literally doing the thing that the NFL wanted to be completely dissociated from. But between 1976 and 1988, Jimmy the Greek was one of the co-hosts of that show. And he would present his predictions for the outcome of games, looking very much like a character from The Sopranos. I feel like maybe the guy who played Pauly looked to Jimmy the Greek for inspiration. And here he is on Letterman in 1987,

making political predictions. Could you now give us odds on the Republican nominee, the Democratic nominee, and the ultimate winner? And Gary Hart, too. The Republican nominee, it's eight to five that Bush beats Dole. It's six to one, you can't guess who the Democrat are going to be. And I don't care who you take. And it's 50 to one against Hart. Wow. So even though there's all these people associated with gambling kind of on the margins of football, they are kept apart by their class divide like Richard Gere and Julia Roberts in Pretty Woman. Exactly like that. I knew you were a big Pretty Woman fan, Max.

I love it. Can't get enough. So the NFL has always, on one hand, depended on gamblers' interest in games to keep ratings high and seats full and ad rates high, et cetera, while pretending that the NFL has no association with gambling officially. And because gambling on sports was illegal

almost everywhere except Las Vegas for much of the league's existence, if the NFL did associate with gambling, in addition to bringing the integrity of the sport into question, they'd have to associate publicly with a part of the economy that operated mostly illegally, aka organized crime. And the other major sports leagues all felt the same way, which is why they also joined this federal lawsuit that is the center of this story. Oh, right. I remember this. So this is what Goodell was testifying for earlier in 2012.

So Atlantic City had been struggling for a long time. And Chris Christie, the governor of New Jersey, tried to revitalizing it by legalizing sports gambling in his state, which I remember being like kind of a big deal because as the NFL pointed out in joining the federal lawsuit, sports gambling was banned in most of the country, including in New Jersey under federal law. Exactly. And this is where our lobbyist comes in, our brave little lobbyist, the guy whose story explains... The lobbyist who could. The little lobbyist who could. The guy whose story explains how all this changed, his name is Jeremy Kudan, and he comes into this story in 2014 when he hears an ad on the radio for fantasy sports betting. Just choose a league, pick your team, and get your cash winnings after Monday night. So, Erin, what is fantasy sports? What is fantasy sports betting?

Okay, so it's like Dungeons and Dragons for people who play JV golf. That's so mean. Apologies to any fantasy sports bettors. We love you. No apologies whatsoever. Look, it is basically where you assemble a roster of players that don't actually play on the same team. So you pick people to play in different positions, and you score points based on how well each of those players perform on their respective teams. Oh, I see.

So you're not betting on the performance of a team. You're betting on the performance of a player. And during this lawsuit, they argued that this takes skill, so it's not a total game of chance. It's a game of skill. Oh, okay. So it wasn not a total game of chance. It's a game of skill. Oh, okay. So it wasn't aggressively illegal. It was illegal adjacent. I think it was legal. Well, here's the thing. It was kind of a gray area.

It was a gray area because it was illegal to bet on sports games because that was considered a game of chance. But assembling a fantasy sports team could feasibly get you through the loophole that it's legal to play a game of skill and earn money from the game of skill. I see. So that's why you could wager on fantasy sports, but not regular sports. Exactly. So having an imagination can really pay off. So Kudan got inspired to seek out the fantasy sports betting companies as clients. He told them, you should hire me to lobby state legislatures to write laws preemptively establishing your business as legal. So like eliminating the gray area that they currently operate in and make it definitively legal. So fantasy sports betting in a way was kind of like the Trojan horse of the Trojan horse had an entire ass casino inside. And it becomes a huge business.

Okay. So I remember how this kind of aligns with the big trial over New Jersey and gambling. At this point, New Jersey had actually lost its case against the feds. A federal court had said the state could not legalize gambling and actually lost six times. And it kept appealing. And at this point, the gambling industry gets inspired. They see the rise of fantasy sports betting, and all of Jeremy Coudon's success is getting all of these state laws. And so the gambling industry joins in this suit in New Jersey, and then it goes through all

these appeals. And then in 2017, the Supreme Court takes it on. Right. And up until now, the major sports leagues have backed the feds in opposing the New Jersey law. But the leagues around this time kind of start reconciling themselves to the idea that legalized sports betting is coming in part because of the tsunami that was fantasy sports.

Oh, right. And this is, I remember, this is like right around when the leagues finally start actually having some teams in Las Vegas. After forever and ever, they wouldn't even have teams there because of their taboo around betting. And the NHL is the first. They set up an expansion team there in 2016.

Then there's a WNBA team. And the taboo was kind of starting to break around the time of the Supreme Court case. Exactly. And the WNBA team is really good. Yeah, they win a big championship right away, don't they? They've won the last two the Supreme Court case. Exactly. And the WNBA team is like really good. Yeah, they like win like a big championship like right away, don't they? They've won the last two WNBA championships. They are like really good.

It's that high desert air. Exactly. So Kudan is attending arguments for this SCOTUS trial because he's got a big stake in the outcome. And he meets the Major League Baseball chief legal officer outside of the courtroom. So up until now, these two guys have been on opposite sides of this. Kudan is pushing for legalization. Major League Baseball

and other leagues are pushing to keep it illegal. And Kudan has actually been trying to sell to sports leagues that maybe it's time to switch sides. Come on, join me, come over. Let's lobby state governments together to legalize sports betting. But the leagues have always said no up to this point. But it's clear from the arguments in front of SCOTUS that the high court is probably going to rule against the feds and they're going to legalize sports gambling. And the Major League Baseball's chief legal officer says he's going to call Kudan to discuss yada, yada, yada. Soon thereafter, Kudan signs Major League Baseball as a client and then he signs the NHL and later the PGA. Oh, wow. So this is a huge moment.

Not only is legalization of sports betting coming, as the Supreme Court is signaling, but now all the major sports leagues are on board. Well, the NFL is still the big holdout. In 2017, they even fined players who entered a made-for-TV arm wrestling contest in Vegas. I really want to see footage of this. It's taboo. It's banned. No arm wrestling anywhere near a blackjack table. Just clearly spelled out in the bylaws. But this was weeks after the league announced that the Oakland Raiders were going to become the Las Vegas Raiders.

So the NFL was already like, all right, we'll put a team in Vegas. No, don't do other things in Vegas. This feels like that scene in What Harry Met Sally, where Billy Crystal is giving that big monologue about how like men and women can't be friends. Inevitably, they're going to hook up or like, this is kind of where football and gambling are at this point. Absolutely. So all of this time, Kudan, our lobbyist, our brave little lobbyist, the center of the story. He's running around state capitals, getting things ready for legalization. So he's now working for both the sports betting apps and also the major sports leagues. And in 2018, Supreme Court rules, everybody expects they overturn the federal ban, legalize sports gambling or pave the way to legalize sports gambling. All the states still have to legalize it, but this is where Coudon comes in. All of these states already have these,

they're called trigger laws, where like as soon as the Supreme Court rules, sports betting becomes legal in their state. And because he's been such an effective lobbyist, because he's got all these big, deep, pocketed clients, often these laws are written with these huge giveaways to the gambling companies. These are the apps you see advertising all over TV now, where some of them in some states have incredibly low tax rates,

where the states are getting like a teeny tiny like single digit percentage of the profits. And a lot of them even have this carve out where, do you know this thing, risk-free bets? I looked this up. It's really, it's kind of disturbing. So it's for some of these apps, the first bets you place, if you lose, you don't lose any money. Like the app will cover your losses for you. There are other venues where addictive substances are offered free the first time. Right. It's giving you the first hit for free so that you'll come back. And some of these state laws let the gambling companies write off those losses as

tax deductibles. So it's saying not only are we going to let you give away the first hit for free, we're going to give you a tax incentive to do it. Oh, my God. Guys, the house always wins. That's the rule. Come on. By this point, the fight over legal sports gambling is all but over. Kudan has won. Fantasy has won. It's here. So the NFL finally, as the last big holdout, goes along. The amount of money spent gambling on sports explodes until it dwarfs the amount of money that entire sports leagues bring in on an annual basis. Max, I'm sending you some numbers. I want you to read them out. So these are, okay, these are the numbers for overall sports bets placed every year.

All right, so it looks like the first year that sports betting was legal in a big part of the country, 2018, the year of the Supreme Court ruling. Wow, $4.5 billion in sports bets. That's crazy. Okay, so the year after that, 2019, whoa, it's $13 billion. So it's more than doubled. It looks like $22 billion in 2020. 2021, oh my it's $13 billion. So it's more than doubled. It looks like $22 billion in 2020, 2021. Oh, my God, $58 billion. Then $94 billion.

And last year, $101 billion. Yeah, I think it's safe to say next year, the amount of money bet on sports legally above board will surpass the total amount of budget in the state of Florida, which is crazy, which is crazy, which is crazy. And then, you know, I guess if the math continues in a matter of decades, all of the money in America every year will be sports betting over and over again. I mean, now it's easy to see why the ads are everywhere. This is a huge business.

Yeah, it's absolutely huge. And honestly, preparing for this episode has made me think, should I place a sports bet? I've never bet on a sporting event before, apart from like NCAA office pools. And one year, I hated the Florida Gators so much, and I did not want them to win March Madness. I did not fill out my bracket, but I wrote, if the Florida Gators win, I will kill myself on top of it. And then the Florida Gators won. And when I came to the office that Monday or the next work day, one of my coworkers was like, what are you doing here? So, yeah, that taught me not to gamble.

Gamble with your life. I was joking. It was a joke gamble. I have to tell you, I had a very different reaction to this. These numbers really scared me. And it's maybe just because of like the news coverage I'm reading about it. But like as all of this sports gambling has gone up in these huge amounts, like rates of gambling addiction are way up, rates of bankruptcy are going way up. Like it kind of reminds me of the crypto crash, but in like it's much more durable. Like there's not going to be a crash

because there's entire industries that know that it's gambling and durable. There's not going to be a crash because there's entire industries that know that it's gambling and they know how to make money off of it. Right. Totally. And I think the gambling industry, and this is another nudge, nudge, wink, wink, unacknowledged, inconvenient relationship. But alcohol sales are driven overwhelmingly by the top 10% of consumers of alcohol. In much the same way, the gambling industry is driven overwhelmingly by people that gamble the most money, which includes a lot of people that have legitimate problems with gambling. And we don't know the extent of the fallout from the legalization of sports gambling because it's only been- It's so new.

Yeah, it's so been new. Yeah, it's so new. So we don't know how many people are being harmed by this and what protections in place are effective and which protections we still need for people who can't engage with gambling in a way that isn't just completely financially devastating to them. So even though the ads I see for this and the ads for it are absolutely everywhere show it's like the boys having fun in Vegas betting on the big game. Like it sounds like it's at least possible or it would be it would stand to reason that this industry is built on the backs of people who are gambling to excess way beyond what's healthy for them because that's how the industry makes so much of its money. Exactly. And it's really hard to sell gambling in a way that includes the unglamorous, scary, sad parts of it. Just like you would never see an alcohol commercial featuring an alcoholic. You're never going to see a gambling commercial that makes it seem anything like this fun, cool, extra thing you get to do to make money.

You know, they're never going to be totally honest about the extent of the damage it can do your life if you are somebody who gambles compulsively. So maybe the romance between the NFL and legal sports gambling, it's actually kind of Nick and Amy in Gone Girl. Yes, at the end of Gone Girl where they have to stay married, but you're like, this is bad. I don't know if you guys, I think you probably shouldn't be married. And Commissioner Goodell is still battling to preserve the game's integrity or appearance of integrity. Just this week, he announced some new suspensions for players that broke the rules.

And yeah, the NFL is still playing that old game of whack-a-mole. And it hasn't stopped people from having conspiracy theories about the NFL or like any professional sports being fixed. Which was the whole thing he was worried about. Yes, exactly. But, you know, I mean, social media has made it so that anybody with like a wild theory can kind of spread it around. I remember earlier in this football season, there was a conspiracy theory that took pretty like strong hold, at least on my corner of TikTok, that it theorized that the colors of the Super Bowl logo indicated a predetermined matchup. No. This is some Taylor Swift QAnon shit. I know. And it was because in the last two years, the Super Bowl logo's colors had matched the

colors of the teams that eventually made the Super Bowl. And the logo was released many months before even the playoffs start. You get the Super Bowl logo. So people were saying earlier this year, because the Super Bowl logo was purple and kind of a rusty red, that it was going to be the 49ers and the Ravens, which it didn't end up being. And the teams that it ended up being ended up generating this entire new round of conspiracy theories from like far right wing freak out people who somehow have constructed this whole theory that somehow Taylor Swift and Travis Kelsey and COVID vaccinations and President Biden are on in it. And they know that one's true.

Oh, that one's correct. Yeah. Well, you know, when it comes to the NFL and gambling, the horse is now out of the barn. And so now things have gotten so crazy that prop bets have actually exploded. Prop bets have existed for a long time, but now they're just— Yeah, I've never heard of it, but they're everywhere now. They're silly bets. They're silly bets on things that have nothing to do with the actual outcome of the game.

Oh, so it's just a bet on, like, something that is not actually, like, which team will win or how many points they will score. Right. But, like, what's an example of it? Gatorade color. What you got, Max what's an example? Gatorade color. What you got, Max? Really? Yeah, Gatorade color. I'm putting it all on blue.

Well, orange has been winning in the last few years. I'm taking the long odds. Okay. Well, you could win a lot of money on blue Gatorade. The result of the coin toss, you would think that history would present a 50-50 odds, but actually tails has won 53% of the time. You're really kind of an expert odds maker. I am an expert Googler of prop bets 2024.

I see you are wearing your green visor in the studio right now. My transitions lenses that are currently stuck like two shades darker than what should be worn indoors. Will the game go into overtime is a really fun one. Those odds are really long. But if you bet that the game will go into overtime, you can win a bunch of money by putting very little money out there. Will Taylor Swift cry? Wow.

What do the odds say? I don't know. I haven't checked that one yet today. I wonder how many of these prop bets are stuff like Taylor Swift where it's not even about football because sports betting is so big now that it seems like even people like, as I'm sure you can tell, like me, who are not a big football fans, like want to get in on the gambling aspect of it. Yeah, you can bet on how long the Star Spangled Banner is going to be. Is it going to be over 87 seconds or under 87 seconds? You know, you can make a bet on that. Yeah, it's really wild.

You don't have to know a thing about football. And you can just bet. You can know a lot about Gatorade. And you can just bet based on your Gatorade knowledge and possibly win. It seems like a kind of unhealthy amount of gambling. I don't know. I don't want to, like, judge people's vices. Wait till you hear about the stock market, Max. And that's the story about how the NFL went to battle with inevitability and lost.

Well, at least they left it all on the field. And that was this week's How We Got Here. Make sure to tune in next week for another look behind the headlines. But before we go, we've got an extra bonus 1987 clip of Jimmy the Greek that shows why you shouldn't trust gambling experts to make political prognostications. Mr. Trump is arrogant. He's egotistical, but he's smart and he's beautiful and he knows how to do things. If he would switch to the Democratic side, he could win the Democratic nomination. What a Day's How We Got Here is a Crooked Media production. It's written and hosted by me, Max Fisher, and by Aaron Ryan.

Our producer is Austin Fisher. Emma Illick-Frank is our associate producer. Evan Sutton is our sound editor. Kyle Seglin, Charlotte Landis, and Vassasilis Fotopoulos sound engineered the show. Production support from Leo Sussan, Itsy Quintanilla, Raven Yamamoto, Natalie Bettendorf, and Adrienne Hill.

And special thanks to What A Day hosts Trebelle Anderson, Priyanka Arabindi, Josie Duffy Rice, and Juanita Tolliver for welcoming us to the family. Oh my God, the headline

in the New York Times headline, Fixer, jailed here for bribe offers to football stars. 25,000 bail for a gambler who attempted to hire two players of Giants. Look at this. Look at how long this headline is. This week on Pod Save America.