00:00It's kind of disturbing and blown us away, the gamification of our society and sports gambling
00:07and especially college sports. Like you just think these things were sacred and things have
00:11changed. Tell us about why you wanted to write this book. And as you kind of started to dig into
00:17it, what more kind of came out? Well, I've been covering it for several years for the Washington
00:23Post mainly, and I felt like I was scratching the surface, particularly this fundamental question of
00:28why it was that the pro leagues went from calling gambling an evil and the deadliest possible
00:35thing that could happen to sports. That's something the commissioner of baseball said
00:37barely a decade ago to becoming the most aggressive evangelist for gambling. Had my head spinning,
00:44I didn't feel like we'd gotten to the bottom of that. The other reason was just these brands like
00:49FanDuel and DraftKings have become household names. They're so dominant across sports. And yet a lot
00:56of us have no idea what it's like to work there, how they talk about customers behind closed doors.
01:01So spending the time to cultivate sources at places like that was of great interest to me.
01:07You mentioned the commissioner of the MLB. You noted in the introduction that you spoke to 300,
01:12more than 300 people for this book, but the commissioners of the NFL, NBA, WNBA, NHL, and MLB
01:18all declined to participate as did the top current executives at FanDuel and DraftKings. With that as
01:26the backdrop, what was the turning point for these leagues to say, okay, we're going to oppose
01:32something like this to Adam Silva writing that op-ed in the New York Times that was like, it's time
01:38to
01:38legalize this. That was the turning point because his predecessor, David Stern, I've learned was about
01:45as anti-gambling as they come. So within a year of taking over for his mentor, Adam Silver publishes
01:51this shocking op-ed. That sets in motion a campaign behind closed doors where the gambling industry was
01:58trying to persuade the other leagues to get on board. And the thing that really got their attention
02:02was what gambling could do for their TV rights.
02:06Knew it. It's always about the media rights.
02:09Yeah, they were worried, you know, audiences aging, young people not wanting to sit through three or four hour
02:15games, people canceling cable subscriptions, and thinking about that in the long term. The Gambling Industry
02:22Commission studies from Nielsen that showed gamblers watch more than twice as many games. They watch till the
02:28ends of blowouts to see how a bet plays out when normal people have changed the channel. And so looking
02:34at that
02:35and then projecting what it would mean, both in a direct sense for partnerships with these gambling
02:39companies and indirectly by growing their TV audience, the NFL, for example, was told it would
02:45make more than $2 billion every year if gambling were legalized. So this was happening before the
02:51Supreme Court struck down a federal ban on bookmaking. When they did, the leagues had already been converted
02:57behind closed doors and they were ready to cash in.
03:00Right. You know, so where's, hmm, it's always like follow the money, right? It always comes back to
03:06like it's about making money. I mean, is this a problem that you think better regulation could
03:12change the situation or no? It could help on a sort of incremental scale, but fundamentally,
03:20online sports betting is a beast. It's a whole new ballgame. And this might sound-
03:25The cows left the barn or the horses left the barn, whatever the expression is. I mean,
03:28is it just done? Like it's out there.
03:31Yeah. And again, there are other countries and I think the US could have benefited from looking at
03:36places like the UK and across Europe and Australia that have had sports betting a lot longer than we
03:42have and have seen the damage that it does when you trust these companies to self-police. So there
03:47are things that they've done that we could learn from. But the bottom line is when you make it possible
03:52to bet on thousands of things within every game in real time, wherever you are, 24-7, that is such
04:00a game changer.
04:01There's this really weird thing happening right now amidst the rise of sports betting, and that's
04:06prediction markets. So calcium, polymarket, and what you can do in an environment that, you know,
04:12FanDuel and DraftKings, it's not legal in every state, and it's regulated by the states.
04:16They get taxed. The winnings are taxed by the states. They're revenue generators for the states.
04:21That's not the same with prediction markets. So you could be in a state where you can't actually
04:25make a bet on DraftKings or FanDuel, but make a bet on CalShe on a sports outcome. How do you
04:30look
04:31at that?
04:32The whole debate, and it's not a new one because there have been a lot of companies over the years
04:37that tried to circumvent gambling laws, including FanDuel and DraftKings when they were so-called daily
04:42fantasy operators. The same debate played out a decade ago. What is and isn't gambling?
04:47I think if we're being real, obviously this is sports gambling, even if it's described as,
04:54you know, trading event contracts, and thus it's regulated by the CFTC. From a consumer standpoint,
05:00the experience is almost indistinguishable, and I think the motivation is the same. I can
05:06leverage my knowledge of sports to try to make money, and a lot of states seem to think that,
05:11and they're cracking down.
05:12How much do the companies, whether it's DraftKings or FanDuel,
05:17know exactly what they are doing to individuals? And I bring that up because earlier this week,
05:22we saw Google and Meta held liable for addiction to social media platforms. It's just the start of
05:28a lot of litigation against these guys about addiction. Does that decision, in your view,
05:33from what you found out, what you've learned about these companies have implications for sportsbooks?
05:38Absolutely. I think it was one of the most striking takeaways from all the reporting I did for the
05:43book was hearing from people in the industry about how concerned they are of the state of their
05:48business and where it's headed. There was one former executive at a sportsbook who said,
05:53when you think about it, my job was essentially to slowly bleed customers dry. And he said,
05:59if you're lucky enough to be an executive at one of these companies, you can make good money,
06:02but you don't feel good about it. That's for sure. I don't think he's alone in feeling that way.
06:07So the internal documentation, there is a great awareness of how to make it sticky and keep people
06:13there and make it dangerous, essentially.
06:18Yes. Sticky came up. I was speaking with an executive at a company that was soon after
06:22acquired by DraftKings. And they provide these so-called micro bets. You can now bet on,
06:28will the next pitch in a ball game be a ball or a strike, all that stuff. And I said,
06:33a lot of people feel like this replicates a slot machine and it's a road to compulsive behavior.
06:38And he said, no, no, sticky. Sticky is how we think of it, that it's especially sticky. But
06:43to a lay person, that sounds like getting people hooked on gambling.
06:49Real quick, just some of the people you spoke to who've been affected by this, who maybe weren't even
06:55doing this stuff before it was easily to do on their phone. What was the story they told you?
07:01A lot of them just sound so relatable. You might think of a person with a gambling problem as,
07:06wow, they must be really out of control and greedy and reckless. I remember speaking with a fifth
07:11grade teacher in Connecticut who said gambling was suddenly everywhere. I thought I could use my
07:16knowledge of sports to make money. Before long, he'd lost more than $100,000 on FanDuel.
07:21Oh my God. Another person, also in Connecticut, coincidentally, was telling me that he got all
07:28this VIP treatment. I devoted a whole chapter of that to my book because the things they'll do to
07:33keep their biggest losers happy is extraordinary and a little risky, to put it mildly. And he was
07:40telling me he lost six figures betting on sports and he was hooked on the betting, but also on that
07:46VIP treatment. It made it so much harder to walk away because you don't want to give up all these
07:51freebies and white clothes service. And I said, so what were you doing for a living when you lost
07:56all that money? Because these companies insist they're vetting customers losing at that level
08:02to make sure they can afford it. And he said, I was a server at the Cheesecake Factory making 65
08:08grand
08:08a year. And obviously, FanDuel, who was giving him all those VIP perks, did not check to make sure he
08:15could afford to lose that much money. And they basically told me that.
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