Sports Betting

Sports betting is everywhere now. It is in the commercials, on the apps, wrapped into game broadcasts, and sold as a fun way to make sports more exciting. But behind the easy sign-ups and “risk-free” offers is an industry built on odds most people do not fully understand, fine print that can cost real money, and a business model that depends on customers losing.

In this episode, I talk with Danny Funt, an investigative reporter and the author of Everybody Loses: The Tumultuous Rise of American Sports Gambling. His reporting on sports betting, politics, news, and sports media has appeared in The Washington Post, The New Yorker, The Wall Street Journal, Columbia Journalism Review, and other publications. Through his work, Danny has taken a close look at how legal sports betting expanded so quickly in the United States and what that boom has meant for everyday customers.

I talk with Danny about misleading promotions, why “risk-free” bets are not always what they sound like, and how betting apps encourage people to remember their wins while downplaying their losses. Danny also explains why the customers who actually win can be limited or pushed away, while big spenders who lose heavily may be rewarded with VIP perks and personal attention. This episode is a closer look at the gap between the fun, harmless image of sports betting and the way the industry really works.

Show Notes:

• [01:20] Danny Funt introduces his work as an investigative reporter and explains how his book, Everybody Loses, examines the rapid rise of legal sports betting in America.
• [03:57] A “risk-free” betting promotion turns out to be much more complicated than it sounds, leaving customers with bonus bets instead of a simple refund.
• [05:25] The fine print behind bonus bets shows how customers can still lose real money, even when the offer is marketed as safe or risk-free.
• [07:26] Legal sports betting has grown from a Nevada-based industry into a massive national business, with billions wagered every year across dozens of states.
• [10:00] Easy access through phone apps, constant advertising, and in-game micro bets have changed how people engage with sports and gambling.
• [12:21] Sportsbooks often highlight customer wins while downplaying losses, creating a distorted picture of how much money people are actually losing.
• [15:59] Misleading promotions and advertising claims make betting look like a real way to profit from sports knowledge, even though very few people win long term.
• [20:03] Customers who show signs of being skilled or profitable can be restricted or limited, which contradicts the message that anyone can win.
• [21:51] The difference between prediction markets and sportsbooks helps explain why sportsbooks care so much about who wins and who loses.
• [26:24] VIP programs for high-spending customers go far beyond casino perks, offering exclusive sports experiences and personal attention to keep people betting.
• [28:19] Personal relationships between VIP hosts and customers can blur ethical lines, especially when big losers are treated like valued friends.
• [34:17] Unlike bars that are expected to cut off visibly drunk customers, sportsbooks often have no clear requirement to intervene when betting behavior becomes dangerous.
• [37:14] State lawmakers are beginning to consider tighter regulation, but tax revenue and industry lobbying make meaningful reform difficult.
• [41:24] Industry insiders acknowledge the tension between protecting customers and maximizing profits, with many suggesting real change will require legislation.
• [43:37] Professional bettors and industry critics are pushing back by warning people how difficult it really is to win and how risky the current betting culture has become.

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Transcript:

Danny, thank you so much for coming on the podcast today.

It's my pleasure. Thanks for having me.

Looking forward to our conversation. Can you give the audience a little bit of background  about who you are and what you do?

Yes, my name's Danny Funt. I'm an investigative reporter based in Charlotte, North Carolina. I've written for The Washington Post, The New Yorker, The Wall Street Journal. My last article was in The New Republic, and all of that led to my first book, which is called Everybody Loses: The Tumultuous Rise of American Sports Gambling. It was published in January, and I guess we'll be spending a lot of time talking about it. It's me trying to get to the bottom of why sports betting is suddenly everywhere and what the risks are that come with that.

Great. Before we jump into that, I want to ask you the question that I ask of many of my guests is, have you ever been taken advantage of in a scam or fraud because if the experts and the professionals can't get it right 100% of the time, the audience shouldn't feel embarrassed or humiliated if they don't get it right 100% of the time.

Definitely. For me, I'll give you an example that ties into my coverage area, which is sports betting. I was living in New York when they legalized sports betting at the beginning of 2022. The ads were everywhere. There were so many appeals to try to get people to sign up for these betting accounts, and a fortune was spent, hundreds of millions of dollars, to attract New Yorkers because it's such a valuable market.

This was still during COVID, especially in New York, so you didn't have much better to do than see what all the fuss is about with sports betting. One of the most popular styles of bet was, or promotion rather, was it would say something like a $1,000 risk-free bet. You heard that expression risk-free constantly, not just in New York, all over the country. That was the signature enticement as the betting boom took off. To me, and a lot of people I spoke with, risk-free sounds  pretty straightforward.

There's no risk involved. In the case of a $1,000 risk-free bet, you could bet it and you wouldn't have to worry about losing your money. Unfortunately for me, and a lot of, perhaps, millions of Americans, we don't read the fine print. We don't realize that there's a whole bunch of strings attached. What I found was, let's say if you win the $1,000 risk-free bet, you get your money. It's simple as that. It's what happens if you lose that was much more complicated than I anticipated.

You lose it, and I expected to just get a refund like, “Here's your $1,000 risk back, help you play again.” In fact, what you get are what they call bonus bets, which don't function like cash. I don't want to drift into complicated sports betting concepts, but I think you and your audience will be able to follow me. I thought, “OK, I have to bet these bonus bets, but I'll bet on overwhelming favorites. There's very little chance that I lose the bet. I don't care about how much winnings I get. I just want to get the return, the money I bet back to me.”

Because typically, let's say you bet $100 on the Rams to win, and they do, you get your $100 back plus whatever the stakes were of the payoff. Hopefully, it's close to double your money. That's typical. But if you bet on an overwhelming favorite, you might get your $100 back plus $5 because there wasn't much risk involved, you'll take your modest profit if you bet on that favorite.

I thought, “I'm going to bet on these locks, and that way, I'll get the $1,000 back,” or whatever the deal was, plus a trivial amount of money on top of that. What I learned was with a bonus bet, you don't get the stake. You don't get the money you're putting up. You only get the payout. If you bet that $100 bet that I just described, you would only get the $5. If I was betting on a massive favorite with my $1,000 bonus bet as a result of this risk-free promotion, I might get like 10 bucks and the $1,000 is gone.

I'm still definitely feeling the risk, and I'm definitely feeling scammed because I thought this was very straightforward. I thought I didn't have to worry about a large amount of money, which $1,000 certainly is for me. That was the beginnings of me saying, “Wow, there's a lot of deceptive marketing in this business, a lot of things that verge on predatory,” and this is how a lot of people are being introduced to sports gambling are through these misleading promotions. That became one of the first articles I wrote for The Washington Post, and I was often running trying to expose scams, deceptions, cons that are pervasive in this industry.

How big is this industry currently, and how much has it grown in, let's say, the last five or 10 years?

Well, as far as the legal industry goes, for decades, it was confined to Nevada. They've had legal sports betting since the 1950s. For them, it was more of a draw to get people into casinos where they make their real money.

They often didn't even care if the sports book broke even. It was just, “Hey, you want to bet on football, and now you're here. Hopefully you'll go over and play slots and blackjack and we'll make some real profit.” But after a Supreme Court decision in 2018, other states were allowed to legalize it, and it was just a scramble to cash in, and now you've got 39 states plus Washington, D.C. with some form of legal sports betting, and that whole industry of licensed sports books generates more than $150 billion in wagers every year.

Which I'd say means roughly $15 or $20 billion in revenue every year, and since that Supreme Court decision, Americans have wagered more than $600 billion on sports legally, which is an incomprehensible amount of money. I got to interview a man named Theodore Olson, who's a legendary lawyer before the Supreme Court.

He passed away last year, but he argued the case on behalf of New Jersey and prevailed before the court and allowed all this to happen, and toward the end of our interview, I said, “Mr. Olson, did you ever imagine that Americans would have bet—by then it was like $400 billion—as a result of your case?” And he was like, “Oh my god, never in my wildest dreams.”

He thought it would be a much smaller draw. It is part of the draw that now, with Vegas, you had to go to Vegas and participate somewhere physically, but I assume the massive growth in sports betting is online, on your phone. You don't have to get out of your easy chair.

Absolutely. Something like 95% of the business now is conducted online. You can bet with a couple taps of your phone to deposit money and place your bet from anywhere, essentially at any time, as long as you're in a legal betting state. I've spoken with a lot of governors and state legislators and other people who are involved in authorizing all this.

Some of them have told me they somehow failed to connect the dots and put two and two together that betting from your phone instantaneously in that manner would be such a game changer compared to having to go to Nevada or even find a street bookie or an offshore website that would take your bets. They just didn't realize the ease of access would be such a difference maker in how people engage with this product.

A lot of them feel deep regrets about that. One example would be the governor of Ohio, Mike DeWine, has said legalizing online sports betting is his biggest regret in office. Ohio is now considering a bill that would dramatically roll back betting, including banning bets from being placed online. But yeah, that's a huge piece of it.

I think the nonstop ads definitely play a factor, styles of betting that have taken off as a result of all the technological innovation as far as all these bets within the game, these so-called micro bets, where you're able to now bet on like, will the next pitch in a baseball game be a ball or a strike?

And that you can imagine is a road to getting carried away or potentially addicted, and it makes a lot more money for the sports books. So it's a lot of things. But yes, you're right. Fundamentally, the biggest difference between the illegal era and now is just you have, as they used to say, a casino in your pocket. And it's tugging at you at all moments, especially when you're thinking about sports.

One of the fears about lots of products, and this happened in the stock investment space, is kind of the gamification of investing and things like that. “Hey, your stock went up. Let’s give you confetti and make it a really exciting thing.” But with sports betting, it's already gamified from the very beginning.

There is something to that, though, on a design level, and even on a semantic level. So what I mean by semantics is the industry has been very careful to avoid the word gambling when describing sports betting. They like the word gaming or just betting. Now you hear about these prediction markets, which are taking that even further.

But the idea is when you think gambling, you think casinos, places you don't want to spend too much time. You think the house always wins. You think about addiction and lives being upended as a result of gambling addiction. Whereas gaming sounds like a game. It sounds like innocent fun. It might even invoke video games nowadays. I heard from the people who founded the American Gaming Association, the casino industry's main trade group.

I heard recollections of when they were coming up with that name in the strategy in the 90s, they had those very thoughts in mind. That was exactly what they were going for. But then, there's a lot about what the industry does to help you celebrate your wins and quickly forget about your losses. A simple example, but that cumulatively, it's not so simple or harmless is like, for a while, I was seeing DraftKings, which is the second largest sports book in America.

Now, they would send a monthly report to customers of how they were doing with their bets. And it would highlight, like, your biggest single win, or the biggest long shot you hit, or the biggest parlay you hit, which are these. It's a popular style of betting where you combine a bunch of different bets. If all of the legs are successful, you win a lot of money. If any one component of a parlay is unsuccessful, the bets a loser. A lot of people are drawn to it because the payouts are really big, but the odds of winning are very small.

My point is DraftKings is sending this report. And when I hear report, I think, “OK, it's going to tell me my net performance.” Not so. It's only reminding you of your wins and trying to brush aside how much money you lost. That's the name of the game. And they do a good job of achieving that.

I can imagine that if my stock brokerage platform only told me, “Here are the stocks in your portfolio that have gone up, and here's which ones have gone up the most, but we're not going to talk about the net number or where you lost money,” that would be sacrilegious and people would be screaming and yelling that, like, “This is evil and this is horrible.” Why doesn't that not seem to be the case in the sports betting?

Well there are some people who are screaming about it. Even as a reporter, I'd throw me in that bucket of people saying this is destructive and not really the whole premise of legalization was people want to bet and they're going to find a way to do it whether it's legal or not, similar to the argument for legalizing recreational marijuana.

If there's going to be a market for this, no matter what, let's regulate it so it can be taxed, and there can be consumer protections, and these companies are held to a standard where they have to give customers a fair shake and treat them honestly and pay them when they owe their money and not trick them about the odds and all of these other things that can be shady about the black market for sports betting.

In practice, though, a lot of that doesn't happen and I'm glad to be speaking with you in particular because we could argue about whether it's a good thing to have legal sports betting or even whether it's a good thing to have online betting. I could see some cases for and against that are credible. What a lot of people can get behind is the idea that a lot of what the industry is doing is downright predatory.

They're tricking people. They’re misleading them about the nature of gambling and about specific bets. They're cheating them out of money that they ought to be paid. The list goes on. A lot of it feels reminiscent of how the black market did business and so it kind of is a betrayal of the whole case for legalization and it's why I don't spend a lot of time in my book talking about what is the right way to be a fan and does gambling have a piece in that? I'm focused on people getting screwed over and let's talk about it and shed light on it.

What are some of the ways that gambling is promoted or sports gambling is promoted that is particularly shady? I think you talked about the no-risk betting.

Absolutely. And there are other promotions that are misleading and I don't want to. There's so much more I could tell you about an answer to your question. I don't want to spend too much time on the promotions, but I'll just finish that topic quickly with a story, which is I wrote a story in The Washington Post that I adapted for the book about a guy in Virginia who was…he made all the same mistakes that I did with that promotion, saying, “A-ha. This seems like no risk. I'm going to bet a lot of money that I wouldn't bet otherwise.”

He tried to bet on those favorites that he could claim his bonus bets didn't work for him. But he worked for the federal government as a lawyer. He has the resources and the sense of principle to go after in this case, BetMGM in Virginia and say, “This is not fair. You, you misled me. You ought to pay me back.”

He had this whole back-and-forth with BetMGM that I eventually learned about and was able to corroborate where he said, they said, “OK, fine. We'll refund you your 1,000 bucks. And he said, “Not good enough.” And they said, “OK, we'll give you, like, 3,000.” “No, no. You need to actually change your policies. I don't just want to be paid off.”

Eventually, they were prepared to pay him. I could be slightly off on this, but I think it was $14,000 as compensation for this $1,000 bet that he lost conditional on him signing an NDA, and them not having any pledge to actually fix this so it doesn't keep harming other people. And to his enormous credit, he said, “My goal is to get this corrected, not to be paid off. I'm going to take this to a reporter.”

But I spoke with a lawmaker in Virginia who was instrumental in the passage of their betting bill. And I said, “If BetMGM is prepared to pay this guy 14 grand, why doesn't everyone who was tricked in that way also get 14 grand?” It seems patently unfair to pay this guy off just because he's a lawyer and has the political clout to seek action and the assemblyman said, “Yeah, I agree. More people should get, you know, made whole for this shady deal.”

But beyond that, I could give you a million examples. One, though, that I think resonates with a lot of people is the advertising isn't just excessive. It really misrepresents the nature of sports betting by giving people the impression that they can win money doing this. Not just as, like, a dream come true, like winning the lottery, but that if they follow sports, and sort of know what they're talking about, they can have a good hope of turning sports betting into a profitable enterprise.

An example, and there are many, is there used to be a billboard by my apartment from FanDuel that said, “Turns out watching football can really pay off,” and they even underline those words “pay off.” I don't know how anyone could read that billboard and not conclude “If I am a football fan, this is a real way I can make money off that, like, monetizing my fandom.” I've even heard from some customers who see those ads and say, “It would almost be irresponsible of me to devote all this time and energy to following sports and not cash in on this new opportunity with sports betting.”

The fact is something like one in 100 people actually make money long term. It’s enormously difficult to make money betting. It's similar to betting, beating the stock market as an individual. There's just this wisdom of crowds phenomenon. You as an individual have next to no chance of outsmarting the market.

But beyond that, if you do show signs of competence, not even making money, but just placing the kinds of bets that will give you a chance of making money in the long term, these online sports books will aggressively cut you off as far as how much you're allowed to bet, down to I've seen people who can't bet more than pennies on an NFL game.

Which is the most efficient market in financial speak, like a sportsbook should be able to take basically unlimited bets on who's going to win on Sunday, and know that people aren't going to beat the house edge long term. It’s just borderline impossible. And yet they will still say, “We don't want customers who are sharp,” as it's called, “who are savvy about how to place bets.” You're going to be restricted from what you can bet, good riddance, essentially.

To a lot of people, that feels so unfair, not that they shouldn't be allowed to determine who can bet, but that it totally contradicts their advertising. Lastly, I'll just say I had a whole bunch of interviews with people who work in the industry. To me, one of the most noteworthy things in my reporting was hearing from people in the industry who have misgivings about how the business is conducted and how customers are treated. One of whom was the founding CEO of FanDuel, who said point blank, regarding FanDuel and the industry at large, “I think their advertising is untruthful. They’re selling that you can win, but you can’t.” To hear that from maybe the most impactful individual in all of America, as far as the sports betting boom, should really be given a lot of weight.

I'm curious, I am not a gambler by any means, and even less so sports gambling. Why do they even care, if people are kind of betting against each other, why does the platform really care whether you win or not? Wouldn't they want people to bet and win if they're just taking a percentage?

This gets to the difference between prediction markets and sports books. Prediction markets, it's kind of complicated, but the simple version is, legally, they're not classified as gambling apps, they're treated as derivatives exchanges, and they're regulated at the federal level. There's a lot more to this than you see on the surface. But essentially, it's what's called a peer-to-peer exchange, where Chris and Danny are making trades, and the platform, whether that's Kalshi or Polymarket, or now FanDuel and DraftKings and all the sports books have their own prediction markets.

The platform just takes fees when you try to withdraw your money. As you said, they don't care who's up or down. In truth, they do. And there's a lot of funny business as far as how that's all conducted. But in the abstract it's like a poker room where the poker room just takes a rake from the tables. They don't care which players win the pot and which lose.

In sports betting, you're competing against the house. Each bet is against the bookmaker. And so there are cases where the bookmakers get clobbered, like when the New York Knicks won the championship a couple of weeks ago, a lot of New Yorkers naturally were betting on the Knicks. So New York sports books lost, I think, like, $45 million.

Don't feel bad for them. They will make that back in a week of World Cup betting. That's nothing to them. But it just goes to show there is variance. And even though the house has an edge, which is baked into the odds, if the customer goes 50/50, they lose money, essentially, and the house gets that difference. That's their advantage. That's intrinsic to the odds. Yeah, they can still lose.

They still want to be careful about who they're taking bets from. They want to incentivize the whales, these people who lose a fortune, and are just kind of firing blind. They want to stop professional betters, these sharp betters from getting a lot of action because they do win long term. They're a sliver of the population. But yeah, you want to be careful about taking too much action from a professional.

I assume the platforms will always promote that everybody is that 1% that will statistically win over time.

It's like with the lottery where they will highlight the person who won a life-changing amount of money, and that could be you. This was really egregious in the daily fantasy sports era, which was about in the 2010s, especially around, like, 2015 to 2018. FanDuel and DraftKings exploded. But back then, sports betting wasn't legal outside Nevada, but they found a loophole where they could modify fantasy sports so that it would basically function like gambling.

You were betting on a day-by-day basis on games and players and to an onlooker, it seemed almost indistinguishable from sports betting, but it was classified as fantasy, not gambling, so they could get away with it in all 50 states, at least for a while. There were ads where they would say like, the average customer on FanDuel wins $1,200 a year. What they were omitting was, yeah, but that's the mean, right?

Because a sliver of the population is winning a fortune, and the majority are losing a lot. I think there was a McKinsey study that found that it was like, as I said, a tiny percentage are winning the lion's share of the money. But with fantasy baseball, 11 accounts accounted for like 13% of the profits, 11 people in all of America. Trumpeting, “Oh, this is what the average customer's making,” was wildly misleading.

You mentioned whales earlier in kind of the casinos. The whales are treated really well, they're flown in, there’s free food, free entertainment, all sorts of crazy stuff. Does the same thing exist in sports betting? At least it goes outside of the casinos.

It goes above and beyond. I spoke with the DraftKings executive who described what you just did, have like the old way of taking care of your high rollers. He sort of snickered at that model, because these online sports books blow that out of the water in part because most of the these are exceptions, but most of the perks for casino players are confined to the casino.

It's like, “Here's a free dinner. Here's a first-class plane ticket to come to the casino. Here's a suite while you're here.” That's kind of it. Whereas with online sports books, since you're betting from home or wherever, sitting under the sun is fair game. When it comes to sports, I heard stories of these VIP sports betters, these are people who are losing, at minimum, thousands of dollars a week and often much, much more than that.

There's even a guy I heard about in New Jersey who's lost more than $100 million betting online. He's probably the biggest whale in America with online sports betting. When he moved from DraftKings to Fanatics, it caused a huge shift in market share, just one customer changing brands. I didn't get to figure out who he was beyond I heard that he has inherited oil wealth, but I don't know who he is specifically.

Anyway, when we're talking about sports, these VIPs get to do things like throw out the first pitch in a major league baseball game, have your kids take batting practice on the field beforehand, play pickup basketball in an NBA sport, give the starting command, “Drivers start your engines,” at a NASCAR race.

I heard about there was a US Open played on Long Island, and normal people have to drive there and they're stuck in endless traffic getting from, you know, New York City to Long Island. The VIPs got to take a helicopter that landed on the golf course. That list goes on and on. It's what they like to say money can't buy. But there's also stuff that has absolutely nothing to do with sports. I could give you a lot of examples, but one that sticks out to me was a host at FanDuel.

These people who cater to these customers are referred to as hosts told me about they learned that a customer's dog had passed away. They sent them this condolence gift bag that included a blanket with the dog's face printed on the blanket. What he explained to me very proudly was any sports book can swipe a credit card and give you free stuff. We are so thoughtful that we would send you this blanket to offer our condolences when your dog dies.

To remind you, if you ever think about dialing back your betting, just know you're not only going to lose all these awesome perks, you're going to lose a friend who was that thoughtful when your dog died. And that is why this is one of the most ethically fraught sides of the business because you're egging on people to lose terrifying amounts of money.

You're crossing a lot of lines by making them think of their customer service representative as a friend who will text you day and night, go to games with you, drinking with you, go out golfing with you. But really, they're there to egg you on and keep you betting. They're also the first line of defense if someone has a gambling problem. It puts the sports book employee in a very awkward spot because they're under a ton of pressure to squeeze that lemon for all it's worth.

But they're also responsible for intervening if you have a problem. I heard all sorts of stories of how that goes sideways, where essentially, unless the customer says, “I have a problem. I need help,” there’s enormous pressure on these hosts who are typically just in their 20s or 30s and not heavily trained in the art of responsible gambling and all that to intervene.

It's a very tough dilemma for those people; I sympathize with them. But it's probably the most dangerous side of this business because just about everyone I've met who's in recovery for an addiction at some point was a VIP at one of these companies.

I don't know if you have an answer to this: At what point is that line that crosses over to better saying, “I have a problem”? Like, clearly, $100 million was not a line. But maybe that's because he had a billion. He can afford to lose 10%. Do you have any idea how they define where that line is? Like, “Hey, we think you need help.”

They don't like to define it because then they'd be responsible for acting. In other countries, they have what's called red flag laws. Certain states have tried to adopt that where the company has a responsibility to intervene if people are demonstrating signs of a gambling problem.

What you might wish they looked out for is if you up the amount of money you're wagering dramatically. If Chris starts as a $20 better, and before long he's a $2,000 better, did he get a huge promotion at work or a big inheritance, or has he just developed kind of a tolerance where he needs to bet more and more to get the same rush from gambling, and that can get very dangerous. Is he betting on way more sports than he was initially?

If you start betting on Dodgers games, and then before long, you're betting on Middle Eastern table tennis, and South Asian cricket and all this nonsense, there's a chance you are just looking for anything you can to feed your addiction, especially if you're betting on those things in the middle of the night.

If you are depositing money frenetically, if you're doing what's called chasing losses, which means you lose a bet, and immediately you bet again to try to make up that money you just lost, that's a signature of a gambling problem. And yet, for a lot of this stuff, the sports book is under no obligation to intervene or man what you'd like to see maybe is not just sending you an email saying, “Are you OK?”

But having a trained, if not a social worker, someone who's trained in all of these health issues, phone you and say, “Are you OK,” require a cool-off period if you look like you need it. There's a lot of things that could be done that they are constantly failing to do.

I may have this wrong. I think in the US, bars have a legal requirement of, and I don't know where the line is on this one either, but, “Hey, you've had too much; we're cutting you off and we're not going to serve you any more alcohol.” Is there no line there for sports betting?

No, and I'm glad you brought that up because to a lot of people, some of the rules and norms around alcohol are common sense now and don't seem, like, paternalistic. We don't like the government telling people how to spend their money, but not over serving a visibly drunk person at a bar feels responsible and not that controversial. You'd think the same would apply to betting, but it doesn't.

It gets at why this isn't entirely about money. Yes, if you are spending way more than you can afford and it's putting you in debt or it's causing all sorts of financial problems for you, and a frightening percentage of people, something like a third of sports betters say they've had trouble meeting their financial demands because of their betting habit.

It's not a sliver of the population with a full-blown addiction who are suffering in that way. But just because you can afford it doesn't mean it's necessarily healthy to be betting day and night or to have a compulsion to bet. When they say, “Yeah, the people who are betting at that level were confident that they can afford to lose all that money.”

For one, they're not confident because they're not rigorously checking bank statements or income statements or anything that would give them that impression. But also, just because you can lose a fortune doesn't mean it's good for you to be betting incessantly. When certain places try to articulate what responsible gambling might look like, they will say things like, “You shouldn't bet more than a few times a month on more than a couple types of gambling products with more than like 1% of your household income.” Sports books would lose their minds if that's what customers were limited to.

Yeah, that's pretty crazy. I think it's probably worth mentioning if listening to this, you are thinking maybe I've crossed a line and maybe I've got a problem that in the United States, there is help available. 1-800-GAMBLER, talk to a therapist, talk to your family, talk to your friends, don't talk to your bookie, that there is help if you feel like, “OK, I'm not in control anymore. This has got control over me,” that there is help for that.

Is there legislation that's moving forward? What do you see as—because I don't think that traditionally if companies don't regulate themselves from—if industries don't regulate themselves from the beginning, it takes government intervention for them to regulate. What do you see coming down the pike as far as legislation?

At the beginning, a lot of states hoped that they could trust these operators to self police by and large. You wish they had recognized the folly in that, but that was the guiding principle initially. I always anticipated that there would be a phase of re-regulation eventually because that's what's happened in Europe, which has had online sports betting longer than the US.

They kind of allowed the operators to do business with little restrictions and realized that doesn't work, people were being taken advantage of, the industry was out of control, and so they cracked down and installed tighter guardrails belatedly. You're seeing early signs of that in the US. I mentioned Ohio has a very aggressive bill to roll back a lot of what's allowed with sports betting.

Colorado has something similar. Certain states are trying to increase the tax rate, which if the whole point of this was that it was going to raise money for states, it's unfortunate maybe that the taxes are pitifully meager in a lot of the country. The industry had a ton of clout with lobbying to get those rates bizarrely low. There's some progress there, but unfortunately when a state becomes acclimated to raising a certain amount of tax revenue, it’s very difficult to get them to cut that off, even if they see the harm that's being done.

You might say maybe this will take an act of Congress, or maybe this will take a level of tragedy, whether that's addiction, or athletes suffering as a result of all this gambling, or the suicides that often coincide with addiction. It might take something that unacceptably awful to get people to act on this.

Yeah, that's unfortunate that is often the trigger for a lot of legislation is something horrific happens and people go, “Oh, OK, yeah, do something.”

But you know, I mentioned that hearing from people in the industry was the thing that stuck with me the most. It was on that question that I found their comments most revealing. Like one person said—they work in this—there’s a whole issue with the terminology here, but they work in responsible gaming at one of the top operators and they work there actively.

I can't say their company because they weren't authorized to speak with me, but they said the status quo is kind of when it comes to consumer protections, we'll tolerate the lowest common denominator. Anything beyond that is seen as a competitive disadvantage because you're always weighing protecting customers and maximizing profits.

Unless we're all doing it, we're going to be at a disadvantage if we go above and beyond to look out for the wellbeing of our customers. I heard an executive say, “If you're lucky enough to be in the C suite of one of these companies, you can make good money, but you don't feel good about it, that’s for sure.” And I heard versions of that again and again.

Which basically makes me think even the people in these sports books feel like they don't like what they're seeing as far as how customers are treated, but they feel kind of powerless of the systemic dynamics at play, and it will take legislation to correct this. It won't just take sports books having, like, some epiphany of morality and saying, “Oh, we're not treating people fairly.  We could do better.” They will need to be forced to treat people better.

Because there's always going to be that conflict between—that’s probably what the phrasing they're going to use—where how you treat the customers and how you treat the shareholders can often be at odds with one another.

Totally.

Yeah. I heard it tends to be responsible to the shareholders before the customers.

Exactly. I literally heard someone, I quote someone in the book saying, “Uh, your job is to maximize shareholder revenue. It's not to be a good, moral citizen.” Pretty blunt, but that's kind of what we all might've feared. This person just said the quiet part out loud.

But it's relevant to know that, like they know that that is an issue, but they've made a conscious decision to, “Well, that's our business. It’s not morals. It is making money.” Is there anything positive we can end the episode on as opposed to that statement?

I get criticized a lot for being Debbie Downer in these interviews, but I do worry, and I'll answer your question. I do worry that oftentimes, people, they don't want to bum people out by giving the unvarnished truth of how this is going. A lot of people like to bet on sports. They don't like to be judged for doing that.

I just want to reiterate I'm really not talking about whether it's good or bad to bet on sports. I think there's dangers involved and you should tread carefully. I'm more focused on how the industry operates and what the rules of the road are governing that as far as things that are hopeful.

I'm encouraged by the way that we were talking about professional gamblers and you might think that they would be really defensive about sports betting because it's how they make their livelihood. They don't want to be—they often deal with a lot of judgment because of that. Yet a lot of them speak out very forcefully because they recognize how hard it is to actually make money.

They just have a front row seat for all of the trickery that bookmakers use to maximize profits and really be as ruthless as possible in clobbering their customers. A lot of professional betters who have big platforms, I give them credit for saying like, “Yeah, this is how I pay my bills, but don't kid yourself. It's really hard to win.”

The idea that this is becoming the way that sports fans engage with sports almost by default across the country is maybe not a good thing for their health, for their wallets, for even just, like, the culture of sports in America. Again, kudos to them for saying that.

If people want to find you online, where can they find you and where can they find your book?

Please do reach out. That's kind of how I do my job, by hearing from people. My email’s dannyfunt1@gmail. On social media, it’s just my name, Danny Funt. My websites dannyfunt.com. I have a Substack called Dannyfunt+.

I'd love to hear what people think of the book. If they have any stories with sports books, a lot of my articles come from people just saying, “Can you believe how I've been taken advantage of? What feels like a scam that I've been subjected to? Could you publicize this and maybe that'll do some good?” We've only scratched the surface of those, and in my articles and in my book, but yeah, uh, I'm really grateful when people bring those to me, and I hope your listeners do the same.

Awesome. Danny, thank you so much for coming on the podcast today.

My pleasure. Thank you, Chris.