Out of Bounds 2025 S01E03

5 hours ago

Transcript

00:00:05Good morning. Today, we are here in New York to announce a historic arrest across a wide-sweeping criminal enterprise

00:00:11that envelops both the NBA and La Casa Nostra.

00:00:16Sports betting used to be mostly harmless.

00:00:18Something done between friends as you watch the game.

00:00:21Oh, shit!

00:00:23It was small time, informal and local.

00:00:27Get a stop.

00:00:27Then, one court decision changed everything.

00:00:31New Jersey won a landmark ruling from the Supreme Court on Monday.

00:00:34The Supreme Court will allow states to legalize sports betting.

00:00:38This decision opens the door for legal sports betting nationwide.

00:00:42Legalized gambling didn't just move into sports, it consumed them.

00:00:46You're a fucking bothering boy!

00:00:49Today, almost anyone with a cell phone can now wager on every play, pitch, or putt.

00:00:55BetMGM's got all the sports betting in one place.

00:00:58All from the comfort of your couch, classroom, or commute.

00:01:03With millions spent to remind you to do just that.

00:01:06These blinking red signs all the time saying, gamble, gamble, gamble now!

00:01:11And it's not just the fans being lured into this new national pastime.

00:01:15More college basketball players have been implicated.

00:01:17Illegal gambling schemes in the NBA.

00:01:20No Calvin Ridley on the field this upcoming season.

00:01:22Major league pitchers indicted.

00:01:24He did some of the most brazen corruption on some of the most innocuous bets imaginable.

00:01:30NBA players and coaches arrested.

00:01:32The FBI arresting Terry Rozier.

00:01:34Gambling is competitive crack, especially for professional athletes.

00:01:38Someone he bet with says that Phil lost hundreds of millions of dollars gambling.

00:01:43Real question is, will there be a scandal big enough to put the toothpaste back in the tube and prohibit

00:01:47sports gambling again?

00:01:49And will that scandal happen before the emerging public health crisis worsens?

00:01:53Yeah, I lost at least 10 grand, probably in a span of five minutes.

00:01:57As sports betting mushrooms into a multi-billion dollar industry.

00:02:01How much did you just bet?

00:02:02I bet about 15,000 on the spread and 10,000 on the total.

00:02:05With even online influencers looking to cash in.

00:02:08I feel like the Cubs cannot win five in a row. I don't trust them. Give me the Orioles on

00:02:12the money line.

00:02:13The companies fueling the obsession continue to gamble with the health and welfare of their customers.

00:02:18It's an exploitation that is made by the industry. Not a choice.

00:02:22Rusted with the general public.

00:02:24VIP managers, they're almost like the Grim Reaper sometimes. They're coming knocking at the door.

00:02:29This is the story of how legalized gambling is already causing some bettors to lose their minds.

00:02:35Jimmy Butler, bro, I put 3,000 and win 30. Why you ain't have 30 perks? You work for Vegas!

00:02:41Even as, behind closed doors, sports betting companies work to grow gambling on sports into the biggest, most profitable game

00:02:50on earth.

00:02:51Gambling has always been man versus vice, but now it's man versus vice combined with billion dollar technology company and

00:02:57it's really not fair.

00:02:58Yeah, so what are they hiring?

00:02:59Where to begin?

00:03:01Honestly.

00:03:09It's Sunday morning in late October, and all across America, from Buffalo to Cincinnati to LA, football fans are waking

00:03:18up and getting ready for another big day of games.

00:03:22In Tucson, Arizona, three college friends start to scroll on their phones.

00:03:28God, I love early football Sundays.

00:03:30It's the new Sunday ritual where simply watching the games is replaced with watching and betting on the games.

00:03:37I want Jameis Winston four passing touchdowns in one of these, whether it's straight up or not.

00:03:42I like that.

00:03:43Just put Jameis Winston two touchdowns.

00:03:45Two passing tutties?

00:03:47They're plus 310. I might throw that in anyway.

00:03:50They're checking odds, building parlays, and capitalizing on so-called boosts that let them get more gambling bang for their

00:03:57bucks.

00:03:58I've got a 30% boost on any live bet.

00:04:01Are you going to live bet it?

00:04:03Oh, yeah.

00:04:04Landon, Mike, and Austin are modern NFL fans, part of a generation that grew up to see every play in

00:04:10every game become an opportunity to wager using the totally legal sportsbook they carry in their pocket.

00:04:17So the bet we just placed was for $5 to turn into $115, pretty much $2,200 odds.

00:04:24How many games are you currently betting on?

00:04:26Most of the 11 o'clock slate.

00:04:29But it doesn't need to be football Sunday for these college kids to get action.

00:04:33I bet $50 against my buddy about the Islam and Freddie fight.

00:04:37Some basketball on today, too, if we wanted to switch sports for once.

00:04:41The most locked bet in the entirety of the NBA is the Sabanis double-double.

00:04:46Over 100 million Americans no longer need to leave their couches to lawfully bet on sports.

00:04:52Let's make some money, boys.

00:04:53But eight years ago, this was impossible, despite many Americans seeing betting on a sporting event as mostly harmless fun.

00:05:03Honestly, sports gambling started in America around the same time sports did.

00:05:07I think that the original sports in America, they were all competitions that were organized so that people could gamble

00:05:13on them.

00:05:13I mean, the beginning of professional football was organized by bookmakers, the Roonies and the Mara family.

00:05:20So in a real sense, the history of gambling on sports and the history of sports are really intertwined.

00:05:27But high-profile scandals, from the Chicago White Sox throwing the 1919 World Series, to Pete Rose wagering on his

00:05:35own games,

00:05:36raised concerns that sports betting could jeopardize fan support.

00:05:39The leagues could not have been more opposed.

00:05:42In the most vehement terms possible, they said, this is an existential threat to our sports.

00:05:48This will degrade fans' relationship with sports, where all they're going to care about is the point spread or some

00:05:55prop.

00:05:55So in 1990, the league shared their concerns and testimony before the Senate.

00:06:02Sports betting is bad. It's bad for sports, it's bad for athletes, it's bad for our young people.

00:06:07If large numbers of our fans come to regard baseball only as a gambling vehicle, the very nature of our

00:06:13national pastime would be debased.

00:06:15This ultimately will threaten the integrity of our games.

00:06:19Congress agrees. In 1992, they passed a law effectively walling off sports gambling to just Nevada.

00:06:26But two decades later, a crack develops around fantasy sports.

00:06:31A season-long game where you draft teams of real athletes and score points based on their real-world performance.

00:06:38You have kids and teenagers who have their own fantasy league with their friends.

00:06:43And while I do think the camaraderie is a big part of it, the camaraderie made it easy to hide

00:06:48behind what is sort of the larger picture, which is this is gambling.

00:06:53The whole point is that you're trying to win a pot.

00:06:55In the early 2000s, daily fantasy sports sites launched online, led by DraftKings and FanDuel.

00:07:03There's no season-long commitment. And with brand new contests every week, you can pick a new team each week

00:07:08and get immediate cash payouts.

00:07:10So why is daily fantasy sports, or DFS, legal?

00:07:15DFS advocates claim the rules of the game require skill, not luck, to win. But it takes some convincing.

00:07:22We spent almost four years explaining that it's really a game of skill, immense skill.

00:07:27Jeremy Koudon is a lobbyist for DraftKings and FanDuel, dating back to the DFS days.

00:07:32We would hire the best lobbyists in every single state to educate the legislators so that they would pass legislation

00:07:39to make clear that fantasy sports were a game of skill and therefore legal.

00:07:44And that allowed DraftKings and FanDuel to continue to operate.

00:07:47Fantasy sports really blew up. Daily fantasy sort of grew as a model for playing these games and for betting

00:07:54on them and for a business that could generate money for people who are offering these contests.

00:07:58Fantasy football, fantasy sports in general, is the gateway drug. And it was a really easy indicator that if we

00:08:08ever had, you know, legalized sports gambling available widespread across the country, it certainly lets you know about the potential

00:08:17to have an explosive financial windfall for those who ran sports gambling.

00:08:24So they had, they and their investors had an enormous incentive to push for legalization.

00:08:30The online fantasy sports companies soon have an ally. New Jersey decides it wants to legalize sports betting as a

00:08:38way to raise tax revenue and argues their case all the way to the Supreme Court.

00:08:42Publicly, the leagues oppose the New Jersey legalization push.

00:08:46While the leagues were fighting New Jersey in federal court, they were meeting secretly with gambling companies and learning the

00:08:56billions and billions of dollars they said to make if, if this were legal and they were to embrace it.

00:09:01At the end of the day, you don't have sports betting without sports. And for leagues to be bought into

00:09:06this or to be out in front, we felt was going to be very advantageous.

00:09:10One very vocal advocate for legalizing sports betting is the newly appointed NBA commissioner Adam Silver. In a 2014 op

00:09:18-ed in the New York Times, Silver writes,

00:09:21I believe that sports betting should be brought out of the underground and into the sunlight where it can be

00:09:26appropriately monitored and regulated.

00:09:29Gamblers watch vastly more games, about double as many as even a passionate fan. So when you're a sports league

00:09:37pitching your rights deal to a carrier and multi-billion dollar TV deals are where they really make their money.

00:09:45And you can say gambling is going to make so many more people rabid fans. That was hugely attractive to

00:09:51the leagues.

00:09:51In May of 2018, the Supreme Court's decision in the New Jersey case makes news across the country.

00:09:58New Jersey's won its long battle for sports betting. The U.S. Supreme Court striking down the federal ban on

00:10:05most sports betting, clearing the way for states to legalize it.

00:10:09As more states follow New Jersey's lead, the potential windfall from gambling leaves some former critics scrambling to get on

00:10:17board.

00:10:17The leagues were very antsy about the fact that there's this long history of making those kinds of anti-gambling

00:10:25statements.

00:10:25How are we going to get away with flip-flopping so brazenly? And the Supreme Court case gave them that

00:10:32cover.

00:10:33So the 180 that sports leagues made when it came to Vegas is frankly, it's the origin story behind a

00:10:41lot of changes, behind a lot of reversals of morals, and that is money.

00:10:46And almost from the start, the money begins pouring into the newly launched sports betting apps.

00:10:53It just absolutely exploded in a way that we probably didn't expect.

00:10:59This is the voice of a former executive at a popular sports book who asked us to shield his identity.

00:11:05These are changing times where people, and especially young men, are looking for a lot of quick-hitting serotonin.

00:11:13People are looking for ways to escape. Screen times are through the roof.

00:11:17Communities on the decline. People are working from home.

00:11:21And this confluence of circumstances is something that leads to be like the perfect breeding ground for an explosion in

00:11:28gambling.

00:11:28What surprises many gambling pundits is who quickly emerges as the big winners in the new sports betting business.

00:11:36Experts in the industry thought that the Caesars and Wynn and MGM are such household gambling names.

00:11:43They would ultimately crush these DFS startups. They could not have been more wrong.

00:11:49FanDuel and DraftKings succeeded for two reasons. One, because they were already daily fantasy companies.

00:11:55So they kind of had a pool of customers to draw from to convert into sports bettors.

00:12:00But they invested a lot of money into both marketing and developing their technology.

00:12:05That primarily involves turning the betting into its own kind of sport.

00:12:10Feels like a game almost, saying $50 cash, and you're like,

00:12:14Alright, but I think I could turn into $150 and that's when I'll cash out. It just doesn't feel real.

00:12:19No one in the world has ever seen the types of gambling that we now have routine access to in

00:12:24the United States.

00:12:25The innovations in terms of product have been profound.

00:12:28One of the most impactful is the Same Game Parlay, created in 2016 by FanDuel's parent company, Flutter.

00:12:35A parlay would allow you to make a single wager, linking, say, all 16 weekly NFL games.

00:12:41But with a Same Game Parlay, you could combine an almost infinite number of options from a single game into

00:12:48one bet.

00:12:49There have always been parlays combining bets on multiple games.

00:12:54Same Game parlays were sort of a novelty of online bookmaking,

00:12:59because you need to have very sophisticated technology to set the odds for all sorts of different combinations of things

00:13:07within the same game.

00:13:08I spoke with a former executive at DraftKings. Even he said,

00:13:12We never anticipated that Same Game parlays would be such a big piece of this business.

00:13:16They're now the biggest money maker for online sportsbooks.

00:13:20One of the reasons is, they're often long shot bets that can pay off big for a small investment.

00:13:25Just not as big as they should, since the sportsbooks skew the odds heavily against the better.

00:13:31Still, they remain popular.

00:13:34The idea that you can bet 50 bucks to win 5,000 bucks is ultimately so much more appealing.

00:13:42It has this lottery ticket appeal that betting 50 bucks to win 42 bucks just doesn't get your blood flowing

00:13:49in the same way.

00:13:50The dopamine hit, that's why Same Game parlays are so beautiful.

00:13:55You have a sweat on so many different things within the one game,

00:13:59and the payoff structure is so huge that you're just getting smacked with dopamine consistently.

00:14:05The thought of having like a six leg parlay hit, like boom, first one green, second one green, third one

00:14:13green,

00:14:13and you get to that last fight, and now it's five out of six.

00:14:16It's just you in the fight now, it's nothing else around you,

00:14:19and it's just the most adrenaline-filled thing that you can think of,

00:14:23and it's just one of some of the most fun things ever,

00:14:25because you just know if you hit this, you're making some money.

00:14:29But the books weren't done innovating.

00:14:32In 2020, FanDuel bought a company called SimpleBet.

00:14:36They developed an algorithm that allowed people to bet on plays as they were happening,

00:14:41something called micro-betting.

00:14:43Instead of just betting on how many passes Aaron Rodgers will complete in the game,

00:14:48micro-betting lets you wager in-game on whether the next pass by Rodgers will be a completion,

00:14:53an interception, or even whether the next play will be a pass or a run.

00:14:57Part of this story is that American sports are almost uniquely made for the types of betting

00:15:03that people really seem to love now.

00:15:05You know, our sports tend to have frequent breaks in play,

00:15:08and it turns out those frequent breaks in play allow you to offer, reset,

00:15:14and then offer again odds on just about anything.

00:15:17Micro-betting is just a faster way of betting sports.

00:15:20It creates a lot more risk.

00:15:23I think that live betting is like sports betting on crack.

00:15:28It's just constant action, constant opportunity to bet more.

00:15:33That dissociated hypnotic state, that dangerous state where you're not thinking straight,

00:15:39and you're just gambling more and more.

00:15:41That can happen with people that are live betting.

00:15:45That is also a very attractive prospect for the sports books,

00:15:49because I might be comfortable betting $20 pre-game.

00:15:53I might bet $10 on a micro-bet 10 times.

00:15:57Suddenly I bet $100 when I never would have bet $100 pre-game.

00:16:01I spoke with Simple Bet, and they said,

00:16:03yeah, that's exactly the upside for our business.

00:16:06You're betting more than you would have pre-game,

00:16:08and it's especially addictive or compulsive.

00:16:12These are kind of clumsy words.

00:16:14The words he used was sticky.

00:16:17But these sticky micro-bets now seem likely to get some people stuck behind bars.

00:16:24Good morning.

00:16:24Today we are here in New York to announce a historic arrest

00:16:28across a wide-sweeping criminal enterprise that envelops both the NBA and La Casa Nostra.

00:16:34Whoa, whoa, whoa. Tied to the who?

00:16:36The mafia.

00:16:37As you now know, individuals such as Chauncey Billups, Damon Jones,

00:16:41and Terry Rozier were taken into custody today.

00:16:45Micro-betting is behind some recent sports gambling-related scandals

00:16:48and is bringing unwanted media attention to the betting apps.

00:16:52The modern technology allows you to bet in real-time during the games.

00:16:57And obviously it opens up a lot of possibility for fraud.

00:17:01The fallout threatens to upend the sports gambling landscape.

00:17:05This scheme is an insider sports betting conspiracy.

00:17:09This is only the tip of the iceberg.

00:17:15In the fall of 2025, the growing popularity of sports wagering,

00:17:19fueled by online gambling innovations like same-game parlays and live micro-betting,

00:17:26is threatened by the largest gambling scandals of the century,

00:17:29involving the NBA, the mob, and the MLB.

00:17:33One allegation is that two Cleveland Guardians pitchers saw rigging pitches

00:17:37to win relatively small micro-bets as too tempting to pass up.

00:17:41Emmanuel Classe is a top relief pitcher in baseball

00:17:44that signed a five-year, $20 million contract

00:17:47and did some of the most brazen corruption

00:17:50on some of the most innocuous bets imaginable.

00:17:54Literally, would their next pitch be a ball or a strike,

00:17:57or would it be below or above 98 miles an hour?

00:18:01They colluded with gamblers,

00:18:04allegedly someone who was literally sitting in the stands,

00:18:08who he texted moments before entering the game.

00:18:10He threw one pitch that was outside the zone,

00:18:13but the batter swung anyways,

00:18:15and the batter texted him after saying essentially what gives,

00:18:18and Classe sent him a sad emoji, basically like whoopsie.

00:18:23Critics say the arrests prove the sports books are at fault

00:18:26for allowing these kinds of bets.

00:18:28The companies claim the arrests prove their safeguards are sound,

00:18:31and it's their integrity monitors that are catching the cheaters.

00:18:35I think the system is working.

00:18:36I think the system is working exactly as it was envisioned.

00:18:39So in every piece of legislation,

00:18:41there were integrity provisions that the leagues wanted

00:18:45that included data sharing.

00:18:47Also, unusual activity would be reported immediately.

00:18:50So we now have these monitors

00:18:52who collect all the data from all the sports books

00:18:55and monitor it so they can detect shenanigans

00:18:57and they can contact law enforcement and the leagues

00:18:59and let them know what's happening.

00:19:01That's what's catching all these things,

00:19:02and that didn't exist before the legalization of sports gambling.

00:19:06The league and the FBI, they were on their own.

00:19:09How were they going to find this stuff, you know?

00:19:11Every gambling, cheating scandal we discovered,

00:19:13we discovered through some sort of luck or happenstance, right?

00:19:15Henry Hill, the guy from Goodfellas,

00:19:17gets arrested for selling heroin, turns into a witness,

00:19:20and he tells the government,

00:19:21oh, and by the way, we've been shaving points at Boston College

00:19:24for a long time making a lot of money on it, right?

00:19:26That's how we've catch these guys.

00:19:27Now we're catching it because we have a clearinghouse of data

00:19:31where people are monitoring these games to find this stuff.

00:19:33The optics are that we overturned PASPA,

00:19:36and now we have all these scandals.

00:19:38It was because they started looking for it.

00:19:41People have been cheating all along.

00:19:42What's new is now we have a way to detect it.

00:19:45That argument only works if you believe Emmanuel Classe

00:19:48would have tried to cheat without a phone app,

00:19:51allowing a friend to micro-bet on his next pitch,

00:19:53or that only the players who got caught were out there cheating.

00:19:57Still, monitors are catching more of these incidents,

00:20:00often when high-profile players are involved.

00:20:03The FBI arresting NBA player Terry Rozier

00:20:06in connection with a widespread sports betting investigation.

00:20:09In October 2025, the FBI arrested Terry Rozier

00:20:14on federal charges relating to a gambling scheme.

00:20:16While playing for the Charlotte Hornets,

00:20:19Rozier took himself out of a game after just nine minutes,

00:20:22citing a foot injury with a stat line

00:20:25coming in well below the prop bet projections.

00:20:28That same morning, a bettor in Biloxi, Mississippi,

00:20:32placed a series of 30 micro-bets,

00:20:34all on the unders of Rozier's points, assists, and rebounds.

00:20:38Multiple sportsbooks, including DraftKings,

00:20:41reported the suspicious behavior,

00:20:42which later led to his arrest.

00:20:45The system worked.

00:20:46The operators identified unusual activity around certain wagers.

00:20:49They notified the league.

00:20:51They notified the authorities.

00:20:52This is what we want.

00:20:53If we had this in 1919,

00:20:55we might not have had the Black Sox scandal.

00:20:57It's perhaps understandable

00:20:59why many of the underpaid Chicago White Sox players

00:21:01needed the added income,

00:21:02but a modern-day professional athlete

00:21:05making a modern-day professional salary?

00:21:08People at home do not understand

00:21:10why if you have that much money, why would you gamble?

00:21:13Part of the problem,

00:21:14these people have got themselves into a lot of trouble by gambling

00:21:19and then gambled to get themselves out of trouble.

00:21:22I know that that was the case with Jonte Porter,

00:21:24reportedly.

00:21:25He was in some trouble with gambling debts

00:21:29and that he felt that that was his way

00:21:31to earn his way out of those gambling debts.

00:21:34For a lot of guys,

00:21:35just because they make a lot of money,

00:21:37don't think that they're not carrying

00:21:38that sort of same level of delusion

00:21:40that the average person understands.

00:21:42And they probably carry more

00:21:43because they're inside the game.

00:21:45It's the perfect sort of hidden hustle.

00:21:49Everybody wants to make easy money.

00:21:51I don't care how much money you make.

00:21:53Golfing great Phil Mickelson

00:21:54is in the headlines this morning,

00:21:56not for his game,

00:21:57but for a reported tie

00:21:58to an illegal gambling case.

00:22:01Another good example is Phil Mickelson,

00:22:03who, despite making about a billion dollars

00:22:06between his golf tournament prizes and advertisements,

00:22:10came clean a couple of years ago

00:22:12that he developed a gambling addiction,

00:22:15including betting on sports.

00:22:18Someone he bet with says that Phil

00:22:20lost hundreds of millions of dollars gambling.

00:22:24They love the rush, just like the rest of us.

00:22:27There's something about getting lost in sports betting.

00:22:30Because you're driven and you're a risk taker,

00:22:33you may not get that same level of thrill

00:22:36with lower level wagers.

00:22:39So you go all in.

00:22:41For people who are wealthy or have a lot of money,

00:22:43they're not chasing the amount of money they want to win

00:22:45because often they have money.

00:22:46It's the feeling they're looking for.

00:22:48So gambling is really chasing that feeling,

00:22:50chasing that experience.

00:22:53Gambling is competitive crack for most people,

00:22:58but especially for professional athletes.

00:23:00They are hyper-competitive in a way

00:23:02that most of us cannot understand.

00:23:04The part that these leagues don't like to talk about

00:23:06is the amount of gambling that goes on inside of a team.

00:23:09Player to player, peer to peer.

00:23:10So they're playing cards on the plane.

00:23:12They're playing cards in the locker room.

00:23:13So if they're already a part of this kind of culture,

00:23:16just within their immediate work environment,

00:23:19now you've given them access to gamble on sports

00:23:21from their phone.

00:23:23It is asking for bad consequences.

00:23:28All of these scandals that have been coming out

00:23:30in baseball and NBA and football

00:23:32has created a growing cynicism.

00:23:35And over the last months even,

00:23:38the conversation has been about these games are fixed.

00:23:41If you talk to athletes,

00:23:43like they're used to getting heckled,

00:23:45but the way they are being verbally abused now

00:23:48because of gambling,

00:23:49we're talking about people who say the worst things to them

00:23:52about their families,

00:23:54sometimes about their race,

00:23:55all because they have money on the game.

00:23:58Don't choke, Gabby, like you did yesterday, Gabby.

00:24:01Athletes like Gabby Thomas,

00:24:02who was harassed by a fan during a race in Pennsylvania,

00:24:05You're going down, Gabby!

00:24:07You're going down, Gabby!

00:24:09are experiencing more and more unruly behavior.

00:24:12Gambling on these player performance related,

00:24:15you know, parlays,

00:24:16those are giving people way too much incentive

00:24:21to confront players in real life.

00:24:24Jimmy Butler, man, they don't give a f*** you in that city.

00:24:26Stupid looking man, look at him.

00:24:29Bro, I put $3,000 and I went $30.

00:24:31Why you ain't have $30,000?

00:24:32You work for Vegas?

00:24:34You work for Vegas!

00:24:36I have to commend Jimmy Butler

00:24:38because he showed a lot of self-control in that instance

00:24:40because the way that man was talking to him,

00:24:43nobody would have blamed Jimmy Butler

00:24:45if he had dragged old dude out of the car

00:24:47and gave him a four-piece with a biscuit

00:24:49and a large drink real fast.

00:24:52Now that you do have players who have been investigated

00:24:56for rigging their own performance,

00:24:59that gives fans even more reason to get pissed off at these guys.

00:25:04Gambling completely alters how you see the game.

00:25:11Josh Jenkins got injured!

00:25:12When did that happen?

00:25:13All right, so one of the guys we need in two of our parlays

00:25:16is now out and we just lost two more.

00:25:19If you're betting on sports and you're watching a game,

00:25:21you're caring a lot about not just what team wins,

00:25:24but individual performance-related elements that you want to happen.

00:25:27Like, oh, I need such and such.

00:25:29They gotta get two touchdowns.

00:25:30And you found yourself rooting against your own team at times.

00:25:33It disrupts your experience.

00:25:35Not only has gambling changed the viewer experience,

00:25:38but also the way it's being covered in the media.

00:25:40When the NBA scandal, when that exploded in the news,

00:25:45we saw inherently how sports media had been compromised.

00:25:50Here you have on ESPN's signature morning show, Get Up,

00:25:55they're talking about the scandal,

00:25:56and at the same time you see advertising for ESPN bet.

00:26:00Seeing these second-half odds, I'm gonna live bet them to win.

00:26:03Speaking of winning.

00:26:04The bottom line is that in this economy

00:26:06everybody's looking for new streams of income.

00:26:08Money is the biggest factor.

00:26:10There's billions of dollars that are accessible.

00:26:13I think they saw a humongous media opportunity

00:26:15and probably decided,

00:26:18why are we having this noble attitude

00:26:20about something that people love to do?

00:26:22You know, for ESPN to even have its own betting app.

00:26:26When there was an understood company rule

00:26:29that you didn't talk about gambling on air,

00:26:31just to see how quickly that was reversed

00:26:33is indicative of just how pervasive sports gambling has become.

00:26:37You probably then start looking at those red flags

00:26:41and they start turning real green real fast.

00:26:44While the sports gambling industry is continuously changing,

00:26:48the reason most people gamble isn't.

00:26:50They gamble to win.

00:26:52So in a business where 96% of its customers lose...

00:26:56This is what happens every week.

00:26:57...who are the 4% who are winning?

00:26:59We hit our first-ever million-dollar parlay just two days ago.

00:27:06What the betting scandal headlines reveal

00:27:08is that even the athletes competing in the games

00:27:11can't find a legitimate way to win at sports gambling.

00:27:13That's why most betting app users have a lot more practice

00:27:16with making deposits than withdrawals.

00:27:19But there is a small group of gamblers who can actually beat the books.

00:27:23They don't rely on luck.

00:27:24They rely on math, patience, and spotting an edge most of us will never see.

00:27:29The book spread is off.

00:27:37Right now I'm just looking for basically anything off-market that I want to hit.

00:27:42I like to target higher-liquidity games such as NBA over college basketball.

00:27:48Chris Dierkes is considered a sharp,

00:27:50one of the few gamblers who can actually turn a profit.

00:27:53It's not about knowing the sports.

00:27:55It's about the numbers.

00:27:56Because players change.

00:27:58But the math stays the same.

00:28:00I don't get excitement out of that anymore.

00:28:02I get excitement out of finding a good bet.

00:28:04One that I know is going to earn me expected value.

00:28:07All that matters to me is the number.

00:28:08Oh, damn it. The line moves. I moved back.

00:28:12Chris considers himself a top-down bettor.

00:28:14Meaning he's not starting with who he thinks will win,

00:28:17but is looking at the ways the odds on a particular game

00:28:20aren't taking into account an ever-changing number of important factors.

00:28:25They'll have their underlying models and algorithms that come up with these numbers.

00:28:30But a human's got to monitor it in case something goes out.

00:28:34Say Giannis gets injured for the box.

00:28:37Your model's going to have a difficult time adjusting on the fly for a very niche situation.

00:28:41You need a trader there to quickly update.

00:28:44A manual trader's got to do that.

00:28:46If there's eight NBA games on, which there is right now,

00:28:50the odds they screw up on one of these games and I can attack, much higher.

00:28:54College basketball, even worse.

00:28:56There's 30 games, 40 games going up right now.

00:28:59I can't even count.

00:29:00So the odds that you find something in a mistake there is going to be much, much higher.

00:29:04And if they do it wrong and other books do it right, I notice that and can make a bet

00:29:10there.

00:29:12Professional gamblers are a tiny, tiny fraction, like far less than 1%.

00:29:17A huge threat to that business because unlike the vast majority of us,

00:29:22they know what they're doing and they know how to win money.

00:29:25And they're always looking for angles to exploit sports books.

00:29:31How much did you just bet?

00:29:35I bet about 15,000 on the spread and 10,000 on the total.

00:29:39And like I said, I might have another bet later in that game on the same game.

00:29:42So that's not necessarily max and that's not necessarily the minimum for what I'm trying to bet.

00:29:48I want to win every day. That would be extremely ideal.

00:29:52I will not win every day. I have never won every day.

00:29:55You just hope that you bet small enough in relation to your bankroll

00:29:59and have enough bets that law of averages plays out and you're positive over the end of it all.

00:30:10Isaac Rose Berman is a professional gambler who, unlike Chris, specializes in betting on one sport.

00:30:23I love gambling.

00:30:24I think tennis is one of the easiest and best sports to gamble on for a few reasons.

00:30:28First of all, there's tons of matches all the time, all throughout the year.

00:30:31It's also one-on-one, so I find it easier to kind of model how the match is going to

00:30:37work out.

00:30:37Here's one example. Sportsbooks allow you to bet on every individual point in a tennis match.

00:30:42Not only what game or what set, but literally each individual point.

00:30:45This is generally considered to be kind of one of the most addictive micro markets.

00:30:49What I realized is when a lefty server was going up against a right-handed returner

00:30:54who had a very poor backhand on the left side, they would be much more likely to win that point.

00:31:00And because the sportsbook didn't account for that, every time one of these lefties was against someone with a really

00:31:05bad backhand,

00:31:06every time they were serving on the left side, I would just spam that bet.

00:31:10I think people don't realize it's not just like, oh, you win all of your bets once you get good

00:31:15at this.

00:31:15There's still a lot of ups and downs.

00:31:17Even if you're, let's say, one of the best professional bettors in the world, and you make 2% overall

00:31:22on all of your bets,

00:31:22if you want to make $100,000, it means you need to bet $2 million throughout the course of the

00:31:26year,

00:31:27which works out to something like $5,000 or $6,000 per day.

00:31:30If you place like a five-leg parlay, the odds of you winning all five of those, assuming they're 50

00:31:35-50 bets, are 1 in 32.

00:31:36Yeah, you're usually going to lose a lot.

00:31:39Don't tell that to Rufus Peabody.

00:31:40We hit our first-ever million-dollar parlay just two days ago on college basketball.

00:31:47We had eight winners in this parlay.

00:31:50So, I mean, that's just one of those that, you know, that's very good fortune.

00:31:54Rufus Peabody isn't just a sharp.

00:31:56He's an originator, the kind of bettor who doesn't chase lines.

00:32:00He makes them.

00:32:01An originator is someone who makes their own numbers.

00:32:04So they are generally building models or they're coming up with their own opinions.

00:32:09They're not just looking at the market and trying to find arbitrage opportunities

00:32:13or situations where books have different numbers.

00:32:17They go into it with an opinion, with the number they derive themselves.

00:32:21Sportsbooks employ their own originators to set the initial spread on a game.

00:32:25But then those lines move based on the betting by customers.

00:32:29Rufus sticks with his own opinion, no matter how other people decide to bet.

00:32:34Almost all people who are winning at these places,

00:32:37they don't have an opinion on the game at all.

00:32:39They're just using the market average price.

00:32:43People like Rufus are few and far between where they actually have their own opinion

00:32:47on what the price should be.

00:32:49Those are much rarer.

00:32:52I was always interested in the numbers around sports growing up.

00:32:55Like, I learned to read a baseball box score before I feel like I learned to actually read.

00:32:59But I didn't really put it together with gambling until college.

00:33:04When I was, like, an economics major, I did my senior thesis at Yale

00:33:08on psychological inefficiencies in the baseball betting market.

00:33:11Basically building a baseball model.

00:33:13When I found out about this company, Las Vegas Sports Consultants,

00:33:16they were odds makers in Las Vegas.

00:33:18I was like, this is my dream job.

00:33:20Like, I didn't know a job like that existed where you could, like, do numbers on sports for a living.

00:33:24So I was like, this is the job I want.

00:33:27I cold called LVSC and talked my way into an internship, and it all went from there.

00:33:31Like, the Tim Donahy scandal broke when I was out there that summer.

00:33:35Tim Donahy, former NBA referee at the center of a gambling scandal, turned himself in today,

00:33:40pleading guilty to betting on the games that he officiated.

00:33:44So I got to, like, break down the numbers on the games that he officiated, like the odds movement.

00:33:48And actually I found some really significant stuff that LVSC was able to then send to the NBA and the

00:33:54FBI

00:33:54and actually got them the NBA as a client going forward.

00:33:58So I kind of proved myself, and then they hired me out of college.

00:34:01So I moved out to Vegas for a job that paid $25,000 a year.

00:34:04But slowly building a bankroll, betting in all my spare time,

00:34:08and after a year I realized I could do a lot better just betting.

00:34:15Rufus decides to put his model to the test,

00:34:18with a wager big enough to end his time as a sports better if he's wrong.

00:34:23My first Super Bowl in Las Vegas was between the Arizona Cardinals and the Pittsburgh Steelers.

00:34:29It was 2009. To this day I have not watched that game.

00:34:32At the time I had more than 100% of my net worth bet on the game,

00:34:35and I was so nervous that I decided to go play golf at this little nine-hole course by the

00:34:42airport

00:34:42that is lit up at night. And then I went grocery shopping and cooked dinner until I knew the game

00:34:49would be over.

00:34:50I was, I was like, I was so, I was so nervous.

00:34:56I ended up returning 25% on it. It was great.

00:34:58And it was like one of the most blissful moments when I looked at it.

00:35:02I was like, Gary Russell scored the first touchdown who I bet at 25 to one.

00:35:05It was, it was pretty, it was pretty insane.

00:35:09There's an old saying that the glitzy hotels on the Vegas Strip weren't built with winners.

00:35:14The same holds true for the online sportsbooks.

00:35:16The vast majority of modern sportsbooks, your DraftKings and your FanDuel,

00:35:20they don't want winning customers.

00:35:21And they've developed a way to limit their exposure to sharps.

00:35:25If you let sharps bet unfettered into soft sportsbooks, then no sportsbooks, they would not win.

00:35:32Like if, if they could wager as much as they wanted to, they would be able to do a lot

00:35:37of damage.

00:35:38They're not telling me I can't play there anymore.

00:35:40They're just saying that the normal, maybe 500,000 or several thousand that I was predicting,

00:35:45now is $20 or in some cases 20 cents, which is the same thing as saying we don't want you

00:35:52to play here anymore.

00:35:54Over the course of several months, I made a good chunk of change and unfortunately found myself limited at every

00:36:01sportsbook.

00:36:02The first time it happened to me, I wasn't even that good.

00:36:05So like, I don't even think I was net making money.

00:36:07I just kind of figured out one small glitch in the system and I'd been betting it every day for

00:36:11like 100, 200 bucks.

00:36:12And then I logged on one day, tried to bet a hundred bucks and they were like, max bet $9.

00:36:16I was like, what the heck is, I didn't even understand. I had no idea.

00:36:19Game is already tilted in their favor to start, but the game is further tilted in their favor

00:36:24because sportsbook are able to kind of discriminate who is wagering against them.

00:36:32Let's just see, you know, big tennis guy. So we'll go here.

00:36:37Okay, Stan Wawrinka, old guy. We can try to bet, let's see.

00:36:41We'll try to bet 25 bucks on him and stake amount is too high.

00:36:46Your max stake amount is $13 and 76 cents, right?

00:36:50So they can't even let me, they won't even let me bet 15 bucks.

00:36:52But then the interesting thing is that these are really smart companies.

00:36:55Like they know what you're good at, what you're not good at.

00:36:58So if we go to the NBA and let's say I bet on the Warriors for tonight's game.

00:37:04If I try to bet, let's say 200, that goes through immediately because they know that I'm not good at

00:37:10betting on the NBA, but I am pretty good at betting on tennis, right?

00:37:14That's the sort of granularity in terms of what they know.

00:37:16And so they deem me to be an undesirable customer overall, but they're going to let me bet more on

00:37:21the things they know I probably can't win at than the things that I actually might know what I'm doing.

00:37:28If you are someone who's trying to place bets on a sports book and they kick you out, one thing

00:37:33that that one might do is get someone else to sign up for that same sports book and then go

00:37:37back in effectively under a different name.

00:37:39It's it's called bearding.

00:37:41Because in the past, what would happen would people be go to casinos in Las Vegas and they would put

00:37:45on a fake beard to try to appear as someone else.

00:37:49They could bet the same thing again and not be noticed.

00:37:51A beard is someone who allows a sharp better to use their account to place bets with them.

00:37:57And because they're allowed to bet a lot more than a professional gambler is, professional gamblers rely on networks, sometimes

00:38:05of hundreds of beard accounts,

00:38:07so that they can actually get down the amount of money that they need to to make a living.

00:38:11When the book limits you, I mean, you can't go in the front door anymore, but there's there's generally a

00:38:17side door or a back door.

00:38:18There's and that's kind of the whole ecosystem.

00:38:21While the sports betting apps may try to keep winners away, their biggest struggle is to keep losers coming back.

00:38:27The ways they do that are probably their most carefully guarded secrets.

00:38:31Yeah, so what are they hiding?

00:38:34Where to begin? Honestly.

00:38:38When you gamble on sports, the odds are built to make sure you lose, and almost everyone does.

00:38:44But everywhere you look, on TV, on billboards, on your phone, the companies sell the act of betting as worth

00:38:51doing, regardless of the outcome.

00:38:54And make no mistake, if you're young and male, you're getting the hard sell.

00:38:58The push and the marketing around gambling itself is troublesome because the sheer volume of it is unprecedented.

00:39:08When you think about how for so long the idea of gambling, especially sports gambling, was considered to be this

00:39:15very taboo, very off limits.

00:39:18People don't do that, and they certainly don't publicize it.

00:39:20Bet MGM's got all the sports betting in one place.

00:39:24To suddenly, it being everywhere.

00:39:27You know, you have commercials for betting apps popping up every two minutes.

00:39:31There is these blinking red signs all the time saying, gamble, gamble, gamble now.

00:39:36And it's not just suggested to you that you gamble.

00:39:41You also have to look at who's telling you to gamble.

00:39:44He's got an NFL offer.

00:39:45Don't play with me.

00:39:46I think I'm going to take it.

00:39:47Kevin Hart, LeBron James, right?

00:39:49All of the ads, they're making it seem super cool and sexy.

00:39:53And yeah, it's very much targeted towards young men.

00:39:55And that's public.

00:39:56That's not even, you know, me speculating, right?

00:39:58The companies themselves say that that's their target demographic.

00:40:00They're 100% targeting college goods.

00:40:03For example, celebrities like Drake.

00:40:05Yeah.

00:40:05Drake put $180,000 on someone to win a fight.

00:40:08And like, to us, that's just like insane amount of money.

00:40:11But to them, that's just like a dollar on the ground.

00:40:13That is enticing for you to be like, oh, I want to gamble more.

00:40:16I want to do this, like, because if I could win that money, like, oh my God.

00:40:19Right, when you look at how success is marketed to young men,

00:40:23the idea of you being able to attain these riches and women and all the other things,

00:40:31like, they make that very much a part of the sale.

00:40:34The game just started and the squad's already going crazy.

00:40:38Because on PrizePix, your player only needs to get one yard to win.

00:40:43One yard to start popping bottles.

00:40:45One yard to make a grown man cry.

00:40:48The message is be a big winner.

00:40:51Come win with us.

00:40:52Fireworks.

00:40:53Vanessa Hudgens.

00:40:53Kevin Hart.

00:40:54Jamie Foxx.

00:40:55Life is good.

00:40:56Be a thrillionaire.

00:41:10So growing up, my dad's a sports writer.

00:41:12His dad was a baseball umpire.

00:41:14And so growing up, sports was everywhere around us.

00:41:16And when I turned 18, I started seeing some commercials,

00:41:19like FanDuel, DraftKings, Daily Fantasy Sports,

00:41:22because that was what was rolling out in 2017 when I was a senior in high school.

00:41:26A year later, we got legalized regular sports betting.

00:41:29But so I was seeing the early ads for that, do a risk-free contest,

00:41:32get your money back if you lose.

00:41:34New customers bet $5, get $200 in bonus bets.

00:41:37When I was seeing those ads, I was working at an ice cream store,

00:41:39and I was making $8.38 an hour.

00:41:41And this idea that you could put $5 on a contest to watch your favorite sports team,

00:41:45and then moving $100, I was like, why would I ever work again,

00:41:49was what I was thinking when I was seeing them.

00:41:51I was like, this is a much better way of life.

00:41:53This should be a little bit more realistic.

00:41:55Like, it should be a commercial like this.

00:41:57You have, like, two or three guys sitting on a couch, like, cussing at the TV.

00:42:02You might lose everything or get generational wealth.

00:42:04Yeah, screw it, you know?

00:42:06It's not as though they're intentionally misleading all that often.

00:42:11There's kind of been fewer and fewer advertisements that are targeted at,

00:42:16hey, you can win this amount of money or come win on our app.

00:42:21There's definitely been a subtle shift in the marketing in that way.

00:42:25But while they're careful with how they market their product on TV,

00:42:28the sportsbooks also have an army of paid online influencers.

00:42:32Look at a gambling app. There's a very pretty girl that's on there somewhere.

00:42:36Or you have gambling analysts that they make sure are very attractive looking.

00:42:40I feel like the Cubs cannot win five in a row. I don't trust them.

00:42:43Give me the Orioles on the money line.

00:42:45And these influencers often deliver an overt, get-rich-quick message.

00:42:49You go on social media, all your favorite influencers are gambling

00:42:53and posting about how much money they're making.

00:42:56First play of the trip, cash that easily.

00:42:58On the internet influence, I feel like it's got more of a message

00:43:02that you're gonna win more than you're gonna lose.

00:43:05Here, Poe, I can show you a reel that I just found.

00:43:08Prize pick plays of the day, where they schedule their own parlays

00:43:11and they post saying, oh, I'm a professional better.

00:43:14This is what you can win.

00:43:15So they, like, people, like, there's tons and tons and tons of videos.

00:43:20Still, I think it has, like, a subconscious effect,

00:43:22constantly seeing them win, constantly seeing them hit big.

00:43:25Because you always have the thought saying, shit, could be me.

00:43:27Yeah.

00:43:28What bothers me is the misleading way that it's sold to the public.

00:43:32This is an entertainment product, is what they like to say.

00:43:35Now, of course, they also say this is a way to make money.

00:43:43The goal is to make this a form of entertainment, which we believe it is.

00:43:47It's not to have people become addicts or to be compulsive gamblers.

00:43:53In fact, it's the last thing that we want.

00:43:56Talking to so many people who've worked in that business,

00:43:58they know that a lot of it is misleading,

00:44:00that they're baiting people with these outlandish promotions

00:44:05that, if you read the fine print, are a lot less generous

00:44:07than they sound.

00:44:08And if you download now, DraftKings will match your first bet instantly,

00:44:12up to $200.

00:44:14That's been so integral to converting millions of Americans into gamblers,

00:44:19is hooking them with these lavish enticements.

00:44:23Generosity is a large part of wagering.

00:44:26The game of gambling is built upon happy losers.

00:44:29You want as many people who are losing as possible,

00:44:33but you want them to be happy about promotions or bonuses or risk-free wages

00:44:39or anything like that.

00:44:40And so, yeah, it was a big part of the strategy.

00:44:43The nice thing about the legal sports betting is, like,

00:44:45they'll do things like promotions and profit boosts and free play

00:44:49and all these things.

00:44:49Yeah, price picks.

00:44:50$50 free with $5 deposit when you sign up.

00:44:53Use code LINKINBIO.

00:44:55We all got, I think we all got eight different apps on our phone

00:44:58that we can send the links to and you get 200 free dollars.

00:45:01All the free money isn't actually free.

00:45:04You can't withdraw unless you win.

00:45:07And since you don't win that often, the money usually stays with the books.

00:45:11It seems like fake money until your bet hits and then it's...

00:45:14And that's how they hook you, though.

00:45:16The promotions that you get aren't random.

00:45:18They're tailor-made just for you.

00:45:20They're going to time you.

00:45:21They're going to send you ads, the promos, all these things,

00:45:24based on kind of your betting behavior,

00:45:26which they have access to all your data.

00:45:28Sportsbooks know everything about their users.

00:45:30They know when you log in, what you bet on,

00:45:33your birthday, your social security number,

00:45:35what kinds of promotions you're likely to opt into,

00:45:38just like any modern tech company, right?

00:45:39And they're doing their best to take your money.

00:45:42Gambling has always been dangerous and it's, you know, man versus vice,

00:45:45but now it's man versus vice combined with billion-dollar technology company,

00:45:48and it's really not fair.

00:45:49The books are pushing a high-roller lifestyle

00:45:52fueled by lots of free money, and it's proving hard to resist.

00:45:58Sports gambling on campus is huge.

00:46:01I feel like you could walk up to 60% of the guys and talk about sports gambling,

00:46:05and they'd be right there with you talking ball.

00:46:08Yes.

00:46:08Yes, we do.

00:46:09Would you say it's big on campus?

00:46:11Yeah.

00:46:11Absolutely.

00:46:11Huge.

00:46:12It really is a community thing, yeah,

00:46:14because, I mean, I'm in a fraternity here,

00:46:16and, like, it's a big part of the culture.

00:46:18Yeah, especially with the male population.

00:46:20Yeah.

00:46:20Ever since sports betting came about, it's not as fun as watching the games if you don't have money on

00:46:25it.

00:46:25I was sitting in class and there were three dudes behind me talking about their parlay, so it's huge.

00:46:30You can walk around anywhere and you'll hear about sports betting.

00:46:32In a whole week, honestly, I kind of, like, do one bet a day.

00:46:37One to two bets a day, like $5 to $10.

00:46:40In my opinion, the majority of men, young men on college campuses, have placed a bet within the last week.

00:46:47Dr. Dan Field is a USC professor and therapist specializing in the treatment of gambling addiction.

00:46:53You can gamble while you're in class and you can gamble right before you go to bed.

00:46:59You can gamble all the time.

00:47:00We need that!

00:47:01Oh, that is good!

00:47:02That is good!

00:47:03Yeah!

00:47:05There's still life!

00:47:06There's still life!

00:47:07What's the cash out on it?

00:47:09Overall, money-wise, like, would you guys say you're up or down at both times?

00:47:12Probably down.

00:47:13We know kids who take it to the ultimate limit.

00:47:16I won't say his name, but I know an individual who's bet $4.3 million total and he's my age.

00:47:23A lot of young men are not just betting on sports but betting recklessly and are developing a really problematic

00:47:31relationship to gambling and lose a lot of money.

00:47:35I need to stop gambling.

00:47:37But are you?

00:47:38You're joking about it, but do you actually think you need to stop?

00:47:40Yes!

00:47:42100%!

00:47:43The problem is, this sounds bad, but I do have like, I work a lot.

00:47:48I make good money for my age.

00:47:50It's not ruining my life by any means.

00:47:53I still have enough money to go do what I want when I want.

00:47:55But it's definitely building habits that once I start making 60, 70, 80 plus grand a year, that yeah, the

00:48:03units are gonna go up, I'm gonna lose more, I'm gonna win more.

00:48:05And it's definitely a problem that has been a pattern in my family and that I've been told from a

00:48:10young age to stay away from.

00:48:11I mean, for sake, I have a dice tattoo on my arm for my grandpa, he was a gambler.

00:48:17So yes, if we're gonna revert to the question, I would say it's definitely becoming a problem, and I would

00:48:22like to stop.

00:48:25Psychologists, they say, we're not seeing a full picture now, but we are seeing way more young people gambling on

00:48:31all sorts of things.

00:48:33And a lot of them get their start through sports betting because it's so mainstreamed and normalized now.

00:48:40And so that is a gateway to all sorts of betting.

00:48:43And if a whole generation is groomed to become gamblers in their teens, imagine the sort of gambling problems we're

00:48:50gonna see.

00:48:52I am a gambling addict, and I'm here just to let other people know, you know, what's going on with

00:48:59this industry and how devastating it can truly be.

00:49:08Being a thrillionaire, with stacks of cash you can share with your grateful friends.

00:49:13That's what young men are told sports gambling is all about.

00:49:16I can use some extra cash.

00:49:17But for too many customers, the reality is much different.

00:49:21Disappointment, financial ruin, and a desperate feeling of being all alone.

00:49:26I've seen a lot more problem gamblers since 2018, when the sports betting decision was overturned.

00:49:33It's easier to treat someone that drives to the casino than someone that has the casino in their pocket.

00:49:40The demographics of people suffering from problem gambling has changed since it became legal to wager on sports.

00:49:47Before legalization, people were generally older.

00:49:50There were a lot of female slot players that I saw.

00:49:54After legalization, the gender changed.

00:49:57I was seeing a lot more male gamblers.

00:49:59I was seeing people younger than myself, much younger.

00:50:03What we found is generally males, 21 to 30, those with higher education, and also single disposable income.

00:50:11Young men love sports, right?

00:50:13So it's not really surprising that young men who like to watch sports were also now want to bet on

00:50:18sports as well.

00:50:22My name is Brian Beal. I am a gambling addict.

00:50:26And I'm here just to let other people know, you know, what's going on with this industry and how devastating

00:50:33it can truly be.

00:50:38I started gambling when I was 16.

00:50:42It was pretty bad before I turned 21, but then once I turned 21 and I could legally gamble on

00:50:49those apps, the world just got so much worse for me.

00:50:55So it started with just U.S. professional sports, NBA, MLB, NHL.

00:51:02Toward the end of it, it was absolutely anything, especially during COVID.

00:51:08I would bet on things that you couldn't even find them on the internet.

00:51:13I was gambling on a tennis match with teenagers that I've never heard of.

00:51:18You could bet on who wins the next point in the Korean ping pong match right now.

00:51:23And I was doing that.

00:51:25Like, the apps give you lines for anything.

00:51:30Typically, DraftKings and FanDuel were the apps I used.

00:51:34And they just bombard you all the time.

00:51:39I would get emails from VIP hosts, 6 a.m., 2 a.m., middle of the day, middle of the

00:51:45night.

00:51:46Trying to get away from those apps was impossible.

00:51:51Like brick and mortar casinos, the gambling apps have VIP programs that set up their most prized customers with a

00:51:57real live VIP host.

00:51:59It's about making the bettor feel special in order for them to bet more and hopefully lose more.

00:52:05I've been a VIP at pretty much every sports book in the U.S., every major sports book.

00:52:09And it's a great experience, right?

00:52:11You have a host who texts you.

00:52:13They might give you free tickets.

00:52:14They might give you free merch.

00:52:15You're probably going to be able to bet larger amounts of money.

00:52:18Lose enough, and you might be designated a whale.

00:52:21Whales are VIP customers who lose an extraordinary amount of money.

00:52:27These companies have hundreds of people whose sole job is catering to them, making them happy.

00:52:33So, I mean, you can see here, February 2023, I was 22 years old.

00:52:38I think I was down about $12,000 at the time.

00:52:42And then DraftKings reached out saying, hey, you know, do you want to join our VIP showcase period?

00:52:48Your account shows potential to receive long-term VIP treatment and offers.

00:52:52And they list out some of those offers.

00:52:54Exclusive promotions, VIP support team, personalized bonus opportunities, priority access and invites to DraftKings hospitality offers.

00:53:02All you need to do is let me know.

00:53:04And then I let her know, was in it for a little bit, then started winning money and they kicked

00:53:10me out.

00:53:10And then the last few emails are me reaching out and them ghosting me.

00:53:13I think it's like a little bit messed up to kind of advertise.

00:53:16Anybody can come join and win big.

00:53:18You invite them to the VIP program and, you know, give them all sorts of free stuff.

00:53:22And then when you figure out they actually know what they're doing, you kick them out.

00:53:25What I found in talking to VIP players, the sports book would say, oh, you want to go see a

00:53:30football game?

00:53:30You want to go to a tennis match? We'll get you tickets.

00:53:33You can go sit in our seats. We'll wine and dine you or whatever.

00:53:36But that when that player started to show a positive balance and started winning, those offers stopped coming.

00:53:42When the balance went back down to zero, the phone started ringing again.

00:53:46And now the VIP host is saying, hey, saw you lost all your money.

00:53:50I'll give you some, I'll give you a bonus if you want to deposit.

00:53:53You know, this is predatory in a sense.

00:53:54The VIP program is really a program for very important losers.

00:54:00VIP managers, they're almost like the Grim Reaper sometimes.

00:54:03They're coming knocking at the door, trying to encourage people to wager more.

00:54:09Now the industry will tell you these people are all VIP whales, you know, that they're all people who can

00:54:14afford to lose it.

00:54:15You know, what they'll say is, well, for somebody who's rich, the stakes are a little higher than somebody who

00:54:20is, you know, a regular person.

00:54:22You know, they need to bet more to have more fun. Maybe that's true. Probably not, though.

00:54:27It's kind of crazy that, like, I was a VIP at places when I was 22, 23 years old.

00:54:32I'd lost like $10,000 for their sports book.

00:54:34And they have hosts texting me, soliciting $50,000, $100,000 deposits.

00:54:38People offering me free tickets, all of these things, when they didn't even know if I had a job.

00:54:42They didn't know where my money was coming from. Like, that's pretty insane.

00:54:47VIPs and big losers are a necessary part of the business.

00:54:50The vast majority of profits from these companies come from a very, very small number of users.

00:54:55That's where all of the money is. So, is it inherently predatory? Yes.

00:54:59When you have programs dedicated to making your biggest losers happy as possible and making sure that they lose as

00:55:05much as possible, yes.

00:55:06Would the industry be able to exist without them? Probably not, at least not in its current form.

00:55:12While gamblers and VIP programs may be the lifeblood of the industry, the predatory nature involved, whether by design or

00:55:19not, can have devastating effects on people.

00:55:24I actively was gambling for about 11 years.

00:55:28I work on a doctorate salary, and after two years of work, I had net about negative $40,000 or

00:55:36$50,000.

00:55:39Any chance I could, I could open a credit card, max it out, the same day I got it on

00:55:44one of those apps.

00:55:46I knew the ending was near whether I would get caught or whether I would take power of my own

00:55:53life.

00:55:54Eventually, it was kind of like, I didn't have a choice, but I had to tell someone, because it was,

00:56:01the walls were caving very, very quickly, so.

00:56:07It can result in death, like suicide. The suicide rate among problem gamblers is higher than any other disorder.

00:56:15And I think that when a problem gamblers run out of money, they've run out of options, that shame and

00:56:23guilt can feel just so overwhelming that it feels like all options are expired and just, I can't face this

00:56:34anymore.

00:56:38Brian sought help and is currently in recovery.

00:56:40But gambling is not like other addictions.

00:56:43Heroin addicts aren't seeing their dealer on TV offering a free bonus to come back.

00:56:48The fact is that gambling addicts are going to be confronted with targeted ads and general ads to get them

00:56:54back into action.

00:56:55Everyone gets a free bet.

00:56:57It's unavoidable.

00:56:59And unfortunately, that's been my experience.

00:57:02I've been working with someone, 2019, very successfully.

00:57:06And then in 2025, I get a call that there's been a catastrophic relapse, which just happened yesterday.

00:57:16And that's what's so horribly painful about gambling relapse is that it can hit quick and hard financially and it

00:57:28devastates.

00:57:29And you dig yourself in so deep that you want to die.

00:57:37It's true.

00:57:38I mean, this just happened to me.

00:57:40Sorry.

00:57:41And it sucks because this particular person made a lot of progress and is now seriously in debt.

00:57:53The fallout from sports gambling has been serious.

00:57:56The industry points to the warnings included in all their advertising.

00:57:59If you or someone you know needs help, call 1-800-GAMBLER.

00:58:03But is the advertised cure only worsening the disease?

00:58:07Don't be beat by a game.

00:58:09Do you ever get the message that this is something that could be a problem?

00:58:12No.

00:58:12You think you are the problem.

00:58:18In just a few short years, sportsbooks have grown into billion dollar publicly traded companies answering not just to players,

00:58:26but to stockholders.

00:58:28But as pressure to increase profits grows, so do calls for them to address the harm being inflicted on some

00:58:34of their customers.

00:58:37Those are tragic stories.

00:58:39I've spoken to some people who have these addictions because I want to hear it.

00:58:43I want to understand it better.

00:58:45It makes me better, makes me able to advocate to companies if you thought about this, if you thought about

00:58:49that.

00:58:50It's a disease for many of them.

00:58:52And I'm not sure there's anything you can really do from our side other than the self-exclusion list, other

00:58:57than providing these tools.

00:58:59But I know it's the company's major focus to try to root that out and to help these people.

00:59:04The sportsbook's main tool for fighting off addiction? Responsible gambling initiatives.

00:59:10But these seem designed to prevent the compulsive gambling disease from taking hold, not to offer treatment for the already

00:59:16afflicted.

00:59:19Responsible gambling is intended primarily to be for those people who do not have problems to help them stay in

00:59:25a non-problematic state.

00:59:28I think it is good now that when you first get it, you're able to set what your limits are

00:59:32per week, day, month, whatever it is.

00:59:34It's something that makes you think a little bit longer about what you're doing.

00:59:38But I don't know how much it really would help at the end of the day because there are always

00:59:44ways around it.

00:59:44And obviously you can go in your own settings and change it.

00:59:47Hey everybody, my name's Rob and I'm in recovery from a gambling addiction.

00:59:52Rob Minnick is a former addict turned advocate, using online videos to help others on the road to recovery.

00:59:59So, online sportsbooks and responsible gambling.

01:00:02I think that the people that work, they're like foot soldiers of the responsible gambling industry, they really care and

01:00:08they do great work.

01:00:08But the companies themselves handicap their own workers so that they don't eat into their profit margin enough.

01:00:14What happens when you call 1-800-GAMBLER?

01:00:16Well, the phone is answered by a real gambling addiction counselor who goes over your treatment options.

01:00:21When you call a group like 1-800-GAMBLER and you say, hey, I want help.

01:00:25They will point you to resources and there's good people that answer those calls.

01:00:29But if you call them and you say, is gambling bad?

01:00:33They will tell you, we do not take a stance on gambling.

01:00:37Gambling is neither good or bad.

01:00:39They won't get any funding if they say that gambling is bad because the casinos will just cut it off.

01:00:44So, you have one group telling you, gambling is the greatest thing on earth.

01:00:48Sign up right now and you're going to love your life.

01:00:51And we have their supposed counter messaging saying, yeah, it's not that bad.

01:00:56It's not that good.

01:00:57Do you ever get the message that this is something that could be a problem?

01:01:00No.

01:01:00You think you are the problem.

01:01:02I lost $1,300 in about 45 minutes to an hour.

01:01:08I was at the ATM and I saw the number and I had my car and I was just like,

01:01:12**** it, might as well see what they say.

01:01:14And I'm explaining the situation and they were literally like, really?

01:01:18That's not that bad.

01:01:19We talk to people who lose way more, like 40k, like every day.

01:01:23And then, like, how's that?

01:01:24It just isn't helpful.

01:01:25It really just isn't helpful.

01:01:271-800-GAMBLER.

01:01:28Don't be beat by a game.

01:01:32Responsible gaming.

01:01:33Yeah, I think it's a really fascinating area of the industry and like one that's quite difficult to solve.

01:01:40There's this big push and pull between incentives and morality.

01:01:44Like, if you refer this irresponsible gamer to your internal responsible gaming controls and ultimately they decide to self exclude

01:01:53from your book.

01:01:55But then they just go down the road and they just go and lose all the rest of their money

01:01:59to a different book.

01:02:00You haven't done anything to help that person in the end.

01:02:03You've ultimately just shifted their profits to a different book.

01:02:09That kind of encapsulates the incentive problem.

01:02:12But then beyond all of that, you have humans working behind the screen.

01:02:17Whenever confronted, people almost always react in a way that is moral.

01:02:23But the problem is, is that people aren't going to go looking for irresponsible gaming because they understand the incentives

01:02:31of the book.

01:02:32You're going to just do the bare minimum to ensure that you comply with gaming regulation.

01:02:41UNLV clinical psychologist Shane Kraus is an expert in behavioral disorders.

01:02:46He recently concluded a two-year study focusing on sports gamblers that he had hoped would help create change in

01:02:52the industry.

01:02:53Longitudinal study is probably the largest and only one in the US, despite this being a $150 billion industry.

01:02:59I think a lot of people expected that it would turn out to be not really a lot of risk.

01:03:04We really didn't know because the Supreme Court legalized it.

01:03:06And all these states came online, but none of them had any research going.

01:03:10So I think originally we didn't know what we'd find.

01:03:12And we learned a couple core things.

01:03:14Sports bettors are probably your riskiest terms of a gambler out there.

01:03:19We used to think like, you know, slot players and other things.

01:03:21Sports bettors by far.

01:03:22And these are the folks that are drinking more, using more drugs, taking greater risks, gambling more.

01:03:27That's a risk factor, right?

01:03:29And those are the things that we've been finding in publishing.

01:03:31And generally people are pretty excited.

01:03:33The clinical community, people who do research, problem gambling, people are just interested.

01:03:37Because to be fair, we don't have a lot of research.

01:03:39And every year we go to conferences, different places.

01:03:41And sometimes there's industry people there.

01:03:43I was kind of like, hey, we have some trends.

01:03:45We're seeing some things.

01:03:46What changes would you like to make?

01:03:48Talking to different sports betting companies, sports books.

01:03:50And they were like, well, we're not interested.

01:03:53And their response to me, you know, was, well, we'll change it when you make us change it with regulation.

01:03:58We refuse to do anything.

01:04:00They're also very reluctant to even encourage this to be researched.

01:04:04And to get a full grasp of the prevalence of betting and how much people are betting.

01:04:10And the thinking is, if we had a real clear picture of that, it would freak a lot of us

01:04:15out.

01:04:16And we'd say, this has gotten out of hand.

01:04:17This needs to be reined in.

01:04:19I would urge everybody in the gambling industry to step up, you know,

01:04:22and to really innovate on responsible gambling.

01:04:25How can we better tune these apps and this technology to minimize harm as well as maximize revenue?

01:04:32You know, there's got to be a balancing point there somewhere.

01:04:35But most of the focus is, of course, maximizing revenue.

01:04:39You need government and industry and advocates to come together and start to find about where that balancing point may

01:04:46be.

01:04:47But with sports betting delivering windfall tax revenue to states that legalized it,

01:04:52looking to the government to rein in their cash cow might be a longer shot than a nine-team underdog

01:04:57parlay.

01:04:58They're not passing these laws because they want to make sports fans happy.

01:05:03They're passing the laws because they need the money.

01:05:04I don't know how much incentive that Congress is going to have in stepping in.

01:05:09Because to put on the cape and save the day is very much like asking the arsonist to put out

01:05:15the fire.

01:05:20In the decades since sports gambling was legalized, there's been almost no federal oversight.

01:05:26The fallout from that neglect is real, and some in Washington are taking notice.

01:05:30I serve as co-chair of the Addiction Treatment and Recovery Caucus.

01:05:35And so I've had a history to address public policy for all forms of addiction.

01:05:41There's this growing problem with addiction in regard to gambling.

01:05:47It became what could be a public health issue.

01:05:53We focus on three primary areas.

01:05:57Affordability, marketing, and AI.

01:06:01With marketing, we look back to the days of alcohol.

01:06:05What is this stuff?

01:06:07I don't know, but it's expensive.

01:06:10And tobacco.

01:06:11Camel, Joe Camel as an agent that encouraged people to smoke.

01:06:15Today, there's a reason you don't see people smoking in commercials.

01:06:20We put in restrictions.

01:06:22There's no way you should be able to advertise in the first place.

01:06:25New customers bet $5, get $200 in bonus bets.

01:06:28It's a harmful product.

01:06:30It really shouldn't be something that we're encouraging people to do more of.

01:06:35If I was the gambling czar, I would basically outlaw any marketing for sportsbooks.

01:06:40And I try to do everything possible to make sure that the user experience isn't a joyful one.

01:06:46That it doesn't look pretty.

01:06:48Because, I mean, it's the same thing with banning flavored tobacco products or something like that.

01:06:53You don't want the thing to look shiny and be packaged that nice if it's something that's going to get

01:06:57you in trouble.

01:06:58Like, you should be confronted with the dangers if you want to place a bet.

01:07:01We then move to affordability.

01:07:04There are flags that we have DOJ look for.

01:07:07If deposits are in excess of $1,000 in 24 hours, flags go up.

01:07:12People don't realize, you know, if you have a million dollars in your bank account,

01:07:16you can lose that to DraftKings in literally five minutes.

01:07:18One bad night, you come home from the bar and you're a bit drunk.

01:07:22You're not doing well.

01:07:23You know, you can lose your entire life savings with the click of a couple buttons.

01:07:26And finally, AI, because AI is utilized to really study the gambler

01:07:33and not allowing that kind of surveillance to be done.

01:07:37Nice to meet you.

01:07:37Thanks for being here, Paul.

01:07:39Are you kidding?

01:07:40It's great to be here and it's the right thing to do.

01:07:42Definitely.

01:07:43In order to get the message out, Representative Taco has teamed up with a program called Family and Friends of

01:07:49Gamblers,

01:07:50which highlights the stories of those affected by gambling addicts.

01:07:54The most powerful tools of advocacy, of lobbying for good outcomes, is storytelling.

01:08:01About a year ago, our son woke us up in the middle of the night, told us he has a

01:08:07problem.

01:08:07It wasn't drugs, it wasn't alcohol, it was gambling.

01:08:11We had no idea what to do.

01:08:13We never noticed.

01:08:14So, you know, he's 28 years old, 16, always had a job, but he never had money.

01:08:20For 10 years, we had no idea.

01:08:22And the worst thing about this addiction is, it's a silent addiction.

01:08:27The individual goes through it and nobody knows anything about it.

01:08:31And we are here today to make ourselves vulnerable so others can know they are not alone.

01:08:38Today is very encouraging, but we're not close to where we need to be.

01:08:41Right now, it's a wild, wild west with the gambling industry.

01:08:45And there's just not even close to the needed guardrails for what's a very addictive product.

01:08:50But, you know, we've seen other highly addictive products get there.

01:08:53And, you know, I want to believe this will too.

01:08:58Representative Taco isn't alone in advocating for regulation.

01:09:01But bills and state houses have been unable to find the necessary support to pass.

01:09:06The reason is simple, all dollars and no sense.

01:09:10Most state legislators, they're not passing these laws because they want to make sports fans happy.

01:09:16They're passing the laws because they need the money, right?

01:09:19And this is just as American as apple pie.

01:09:21I don't know how much incentive that Congress is going to have in stepping in.

01:09:25Because do you really want to regulate something that so many of your constituents love?

01:09:32Considering that our politics are driven by money, asking politicians to put on the cape and save the day is

01:09:40very much like asking the arsonist to put out the fire.

01:09:44It's not going to happen.

01:09:45You know, the time for the politicians to stand up would have been in 2018.

01:09:51A few of the politicians who helped legalize sports betting back in 2018 agree.

01:09:57We have heard a couple lawmakers express regrets.

01:10:00One, notably, I think, is Charlie Baker, the former governor of Massachusetts,

01:10:04who immediately after passing a betting bill became president of the NCAA.

01:10:11He said memorably, I kind of wish this had stayed in Las Vegas now that I've seen all the damage

01:10:15it's doing.

01:10:17Perhaps it's not surprising that industry advocates view people trying to regulate sports betting as potentially doing more harm than

01:10:24good.

01:10:25Why?

01:10:26Because people are too hooked on sports gambling to ever stop now.

01:10:30Congress, they're well-meaning, but their idea is let's curtail certain types of wagers.

01:10:35Let's do certain things that will make it harder to make bets.

01:10:39That's actually the wrong approach because it ignores the fact that there is this robust illegal market,

01:10:46that every time you curtail what we can do means that people will migrate to that market.

01:10:51I think what we should be doing is expanding the legal market, trying to enforce against the illegal market.

01:10:58But I don't think we need more regulation right now.

01:11:00But regulation isn't the only issue. The tax revenue generated from legal sports gambling is not being used to help

01:11:08those who are being harmed by the industry.

01:11:10There is no federal funding for prevention and treatment of problem gambling.

01:11:16And that has to be part of the gambling platform.

01:11:19Do you think that you have a problem? Do you want to take a break from gambling?

01:11:23Press this button and it's easy and seamless. There needs to be an easy out.

01:11:29Most kids today still will have never received any sort of preventative or warning message on gambling.

01:11:37We're not prepared as a society to help these young people, and especially young boys,

01:11:42learn how to make better informed choices about their risk-taking behavior and specifically about their gambling.

01:11:47The only way to really fix it right now, in my opinion, is teaching the younger kids about it.

01:11:54Teach us saying, hey, this is what could happen.

01:11:57As long as the people know what they're signing themselves up for, then shit, do it. Have fun.

01:12:03The money's there. Regulated and unregulated gambling generate hundreds of billions of dollars.

01:12:08It's just a tiny fraction of that. States and companies dedicate to try and, you know, educate, prevent.

01:12:15And that's the tragedy.

01:12:18I think right now, if we keep it going as we are, I think we're only going to continue to

01:12:22go towards the cliff, right?

01:12:23We know the helpline is going. Numbers are going up. You can call the helpline. That's great.

01:12:28But what do you send them, right? And if states have nothing set up, we're going to continue to see

01:12:33more problems.

01:12:34And that's what I suspect. I think it's going to continue to get worse, actually.

01:12:37I think eventually there'll be some, you know, changes, but my concern is that it's the litigation that's probably going

01:12:42to drive that,

01:12:43but not the desire to say, hey, let's pump the brakes, right? Because why would they, right? They're making too

01:12:49much money.

01:12:50And there's a new game in town that many people predict is likely to increase the amount of money Americans

01:12:56lose trying to beat the odds.

01:12:57I think the big change in the last year has been the prediction markets.

01:13:01He's likely to be mayor of New York City.

01:13:03Polymarket has it at what?

01:13:05The odds have our chances of victory in the 90s.

01:13:08Yeah, that sounds pretty likely.

01:13:11Just as the country starts asking how to regulate the sports betting apps,

01:13:15the next iteration of online gambling is already here.

01:13:18It's faster, it's younger, and it doesn't stop at sports.

01:13:22There's things that change every year in terms of how we bet, like who we use.

01:13:27That's always a moving target in figuring out how to be able to get the most money down at the

01:13:32best edges.

01:13:33But I think the big change in the last year has been the prediction markets.

01:13:36If you've been watching anything lately, you've heard about them.

01:13:40Polymarket and Kalshi.

01:13:42I don't know if you've heard this app called, uh, is it Kalshi?

01:13:46The two market leaders are everywhere.

01:13:49You've got Elon Musk and Joe Rogan using them as a guidepost for elections.

01:13:53He's likely to be mayor of New York City.

01:13:55Polymarket has it at what?

01:13:57The odds have our chances of victory in the 90s.

01:14:00Yeah, that sounds pretty likely.

01:14:01News segments on 60 Minutes.

01:14:03What is Polymarket?

01:14:05Even an entire episode of South Park.

01:14:07Hello?

01:14:08Yeah, is this the strategic advisor for predictive markets?

01:14:12Yes, it is.

01:14:13The president's son is on the board of both Kalshi and Polymarket.

01:14:17So what exactly is a prediction market?

01:14:19Here's a hint.

01:14:21It's gambling.

01:14:22Prediction market like a Kalshi or a Polymarket is a way of trading on the probability of an event, how

01:14:30it's going to play out,

01:14:31whether that's a campaign or what the weather will be tomorrow or whether the federal interest rate will go up

01:14:39or down.

01:14:39Polymarket and Kalshi are peer-to-peer exchanges,

01:14:42meaning you're wagering against another person.

01:14:45It's how sports betting used to work.

01:14:47You told your friend you liked the Rams,

01:14:49he liked the 49ers,

01:14:50and you bet against each other.

01:14:52But now you can wager on pretty much anything,

01:14:55as Kalshi announced in a recent ad.

01:14:57Welcome to the galaxy's favorite spot to put money down on planet Earth.

01:15:02Used to just be sports.

01:15:04Now, the whole darn rock is fair game.

01:15:07The sportsbooks weren't initially interested in prediction markets, but they have an advantage over a DraftKings or FanDuel.

01:15:13Since they're peer-to-peer exchanges and you're not betting against a company, they're not legally considered gambling,

01:15:19even if they walk and talk like gambling.

01:15:22If your measure of gambling is risking money on unknown outcomes for the chance to make more money,

01:15:28then it's absolutely gambling.

01:15:30I think it's all betting and it's all trading.

01:15:32To me, it seems like a distinction without a difference.

01:15:34But they found this legal loophole by going by something other than gambling to let people risk money on sports,

01:15:41and now prediction markets are active in all 50 states.

01:15:45My name is Jacob Fortinsky. I'm the founder and CEO of Novig.

01:15:49Novig is a prediction market that focuses solely on sports.

01:15:53Jacob is clear-eyed about how Novig relates to sports betting apps like DraftKings and FanDuel.

01:15:57Are you trying to compete against the traditional sportsbooks?

01:16:02Yeah.

01:16:04I mean, I want to destroy them.

01:16:07Like, I think that they're the enemy. I think we want to eat their lunch.

01:16:10From a business model perspective, it's outdated and inefficient, and they're not consumer-friendly platforms.

01:16:16There's just room for a more innovative, more consumer-friendly, more fair and more transparent platform.

01:16:23What really drives us is trying to build a level playing field where you don't have a structural advantage.

01:16:29You're not playing blackjack against the house. You have this peer-to-peer aspect. So it's competitive. It's fun.

01:16:34From a consumer perspective, more choice is almost always better.

01:16:37So, for example, if I want to go place a bet at DraftKings, they're going to give me a bad

01:16:41price,

01:16:41and they're going to tell me I'm not even allowed to bet.

01:16:43Whereas if I go to a prediction market like Novig, where it's peer-to-peer, they're not kicking anybody out,

01:16:49I'm able to bet whatever I want. It's totally fair and transparent.

01:16:52But it's fundamentally fair, and they're just getting better and better.

01:16:55I see the future of this going with prediction markets dominating.

01:17:01I don't think sportsbooks will go away. I think prediction markets are going to take a large market share.

01:17:07And that's why I joined one, because I wanted to be along for that ride.

01:17:10He's not just a customer. Chris is head of trading at Novig.

01:17:14Part of his job is to make sure when a customer shows up to trade on a prediction,

01:17:19there's money on the other side to pay him if he's right.

01:17:22So Novig will often put up their own money to seed a market.

01:17:25No one wants to go to an exchange and say, no one has any predictions here, no one has any

01:17:29predictions here.

01:17:30They'll just get off the exchange. So you need that first level of liquidity.

01:17:34And then when we set that base, other users will come in, not predicting against us,

01:17:39but predicting against each other. And that's how the exchange grows and builds from there.

01:17:43We're not always able to do that, unfortunately.

01:17:46Making a winning prediction on Novig involves many of the same skills required to be successful on DraftKings or FanDuel.

01:17:53Information is everything. And, you know, you can look at sports markets,

01:17:56like this player gets ruled out for an injury. How does that affect the probability on the money line market?

01:18:02And so injury news happens or whatever it is, markets move instantaneously.

01:18:06Luka and Austin Reeves get ruled out. Oh, my God.

01:18:11Luka Doncic and Austin Reeves get ruled out.

01:18:13They have a massive impact on both the spread and the total of the Lakers game.

01:18:17The total will obviously go considerably lower, and the Lakers spread will become even bigger underdogs.

01:18:22Portland minus two and a half. Portland two and a half.

01:18:24Wait.

01:18:24Minus three and a half.

01:18:25Portland minus two and a half?

01:18:26Yeah.

01:18:27Okay, wait. The only risk is, do you think there's any chance the market was pricing in that Luka and

01:18:32Austin Reeves weren't,

01:18:34were maybe not going to play?

01:18:35No.

01:18:36That's an instance where we have to be quick. Take it at Lakers minus six and a half minus one

01:18:41fifteen.

01:18:41Six and a half is for deaths. You're already at seven.

01:18:45Seven and a half already?

01:18:47Okay, tell seven and a half. Get to seven and a half.

01:18:50If we don't move the prediction price, we can get screwed and users can come and make a lot of

01:18:56expected value on us.

01:18:57So that's something we've got to be on top of. Oh, my God, they open at six and a half.

01:19:01As part of their job seeding events to attract traders, Chris and his team will set the odds on those

01:19:07events.

01:19:07They operate like a traditional sports book in that respect, which means they're exposed to losses like a sports book.

01:19:14Can you run your SIM? Do you have a number? So that's why we were all panicking.

01:19:19What do we think the new number is? Because we wanted to be first.

01:19:22Austin's worth one and a half. Luka's worth five and a half.

01:19:26I'm going to go with Portland minus nine and a half.

01:19:31People only care if they're getting money back.

01:19:37Whatever Jacob and the rest of the Novik team are doing is working.

01:19:41Novik has grown a hundredfold over the past year.

01:19:44Kalshi and Polymarket are worth billions.

01:19:46The sports books finally took notice and are now getting into the prediction market game.

01:19:52Prediction markets are inescapable, but not everyone thinks this is a good idea.

01:19:57They're just so ridiculous. I don't know. It's just making gambling worse and worse.

01:20:01Like, gamble on anything.

01:20:03I literally was on the app right now and you can see I can bet on if there's going to

01:20:07be a hurricane.

01:20:07Who will be elected president of Honduras this year?

01:20:10Exactly.

01:20:11Prediction markets are the new version of fantasy sports in terms of just actively targeting loopholes.

01:20:17It's basically just a sports book is all it is.

01:20:19But they're taking advantage of the fact that it hasn't been properly defined by the law.

01:20:23And that's why they're able to market to 18-year-olds.

01:20:27The same loophole that allows prediction markets in all 50 states allows 18-year-olds to use their platform.

01:20:33Though some markets, like Novik, set their limits at 21.

01:20:36We are available in all 50 states, even where gambling is illegal. And you only have to be 18 to

01:20:43bet here.

01:20:43The marketing is like we are operating through a loophole and we're targeting underage kids. Bet with us.

01:20:50Like, that's actually what they think is effective marketing. And the sad part is it's probably going to work.

01:20:54The prediction markets apps are incorporating sports betting, buying crypto, buying options. It's a one-stop shop for gambling.

01:21:04Data shows more than $100 million has been legally wagered on the presidential race.

01:21:10That seems incredibly dangerous right now.

01:21:13Whether they're good or bad, prediction markets are just getting started.

01:21:18Which means pretty soon, everything will be gambling.

01:21:21You gotta believe!

01:21:23I'm believing, baby. Don't worry.

01:21:27It's getting late in Tucson, Arizona, which means Sunday football is nearing an end.

01:21:32And Landon, Mike, and Austin are sweating out their final plays.

01:21:36Alright, so right now we got eight points out of 17, with two-and-a-half minutes left.

01:21:42Yeah, aww...

01:21:43Don't do that, you guys.

01:21:44No...

01:21:45Stop, stop!

01:21:46No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no...

01:21:50That would have been, that would have been it, too. That would have been it.

01:21:53They're close on a couple parlays, waiting for the apps to turn green.

01:21:57Knees down, on revert.

01:21:59Reverse that's worse.

01:22:00Reverse that's worse.

01:22:01I love that one thing. Come on.

01:22:03Get his ass in.

01:22:04Yes!

01:22:06Let's go!

01:22:08Let's go!

01:22:09Let's go!

01:22:09St. Mount is scoring in the second half.

01:22:11There's no way he doesn't.

01:22:12Whether it's sportsbooks or prediction markets, this gambling craze shows no signs of slowing

01:22:17down.

01:22:18In fact, some think it's the groundwork for a revival of the OG, the casinos.

01:22:24I don't think that FanDuel and DraftKings want to be sportsbooks.

01:22:28I think that book and sports for them, just like daily fantasy sports, was just a stepping

01:22:32stone, the next stepping stone on where they're trying to get, right?

01:22:35What FanDuel is telling state legislatures around the country right now is, if you give us the

01:22:40casinos, we'll get you more money.

01:22:43That's the next phase.

01:22:44It's not to become bigger sportsbooks, it's to become casinos.

01:22:48And it's already something that's being heavily advertised.

01:22:52Whoa!

01:22:53DraftKings!

01:22:54Look at all these Blackjack games.

01:22:56You got Spanish 21, Vacation Blackjack, Touchdown Blackjack!

01:22:59People don't realize, in states where both online casino and online sports betting is

01:23:04legal, Americans lose like five or six times as much to online casino.

01:23:07In every country which has both of these products, people lose so much more money to online casino,

01:23:13but the product itself is just way more addictive.

01:23:15The casino industry would never admit to it, but they're so happy that they're becoming

01:23:19intertwined with sports, because now kids that are growing up that are 8 to 10 to 12 years

01:23:25old, that are watching the Phillies with their dad.

01:23:27They're seeing an ESPN bet ad, three DraftKings commercials, the FanDuel same game parlay,

01:23:33the MGM commercial, and then there's a giant blimp probably floating around saying bet here.

01:23:37It's just everywhere.

01:23:39And the casinos are loving it, because they're getting a younger and younger audience excited

01:23:43to use their product as soon as possible.

01:23:46And some of them are jumping ahead and using it years and years before they're supposed to.

01:23:50Sports gambling is just a gateway to going to other forms of gambling, in my opinion,

01:23:56just because of how accessible it is and how easy it is right now.

01:23:58Because once you start sports gambling, you're like, oh, I can do online poker, I can do online

01:24:01backtrack, casinos right down the road, so like we can go right and do that.

01:24:05So it's like, it's just, it's just a gateway in my opinion.

01:24:09When it comes to worst, you lose $10 and you're like, okay, I had fun watching $10 go away.

01:24:13And it's like, it's kind of like when you go to casino, it's like, as we're about to do, honestly,

01:24:17shortly, we're going to go to casino tonight.

01:24:20The sports books are always changing, finding new and sometimes problematic ways

01:24:25to help you give them your money.

01:24:27But for many gamblers, like Landon and his friends, the juice is worth the squeeze.

01:24:33It's about more than winning or losing.

01:24:35Get a stop. You get a stop here and there's a chance.

01:24:38There's time, you got timeouts.

01:24:40That's game. That's game. That's game.

01:24:44Oh!

01:24:48Vegas will always win.

01:24:51Great Sunday, yeah. Could have done a lot worse things than a Sunday.

01:24:58Camaraderie, addiction, fandom, harassment.

01:25:01Gambling has affected sports and our culture dramatically since it was made legal.

01:25:05So the big question is, was this worth it? Should we have legalized sports gambling?

01:25:12Gambling is so fun. It makes things more engaging and can be a real positive for a lot of people.

01:25:18But there aren't enough guardrails to ensure that those who do have problems or need help are going to engage

01:25:26with that help.

01:25:28For so long, gambling has been in the shadows. It's never received the attention it deserves.

01:25:34And it may have taken, you know, a public health crisis like this.

01:25:39I think in the future, in 10 years, if we see gambling a lot like we see alcohol, we'll be

01:25:45in great shape.

01:25:45We have to maintain both the entertainment that for 96% of the public this is, and try to identify

01:25:54and take care of the 4 or 6% that are having trouble.

01:25:58We have to figure out how we can create the boundaries around this thing so that we can enjoy it

01:26:03and enjoy it responsibly,

01:26:05the same way we have figured out around alcohol. But, you know, it took a long time.

01:26:10But for that to happen, a lot is going to have to change. Because the course we're on now doesn't

01:26:16seem sustainable.

01:26:19There'll be some tipping point at some point where public opinion really turns against it.

01:26:23I don't know what that tipping point will be, but I think there will be one in the next 10

01:26:28years.

01:26:29There's one professor who's a psychologist at the University of New Mexico.

01:26:33And he told me he could see three scenarios that would cause lawmakers and the public to say this is

01:26:41out of control.

01:26:42One of them was a spike in addictions and accompanying suicides, which has happened in the UK.

01:26:49The other was one of these enraged gamblers would try to assassinate a player.

01:26:56And the third was a superstar player or a championship game would be exposed for having been fixed.

01:27:03It's a pretty grim outlook.

01:27:06You know, I don't want to sound like I'm lecturing people or old woman yelling at Cloud,

01:27:12because I've certainly gambled on sports before, but I don't think we even have a real idea of the scope

01:27:19of how dangerous this actually is.

01:27:22In 20 years, we're going to see a whole bunch of PSAs and commercials like we do about people who

01:27:27have emphysema

01:27:27and what has happened to them because they smoked their whole lives.

01:27:31It's going to be a bunch of PSAs about somebody who lost a house, who lost virtually everything.

01:27:37When I think about the access that young people have to this now, it's hard not to see disaster.

01:27:45It's like we're on the Titanic and the icebergs right in front of us.

01:27:49But we're the band still playing.

01:27:50You gotta believe!

01:27:53And it's easy to see that this is going to spin out of control.

01:28:07But this can be faster when we're these in space magic online.

01:28:11We're not going to spin out of control.

01:28:13Let's turn it into the room.

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