--:-- Ryan Knudson: Welcome to The Journal, our show about money, business, and power.
--:-- Ryan Knudson: I'm Ryan Knudson. It's Friday, February 7th. Today, we're talking about the sports betting industry and how parlays have become a huge part of it.
--:-- Ryan Knudson: We're going to hear from Alex Haberkern, a 29-year-old who works at a casino in Atlantic City and has a passion for betting on football games.
--:-- Alex Haberkern: I tend bar at a casino in Atlantic City. And despite being surrounded by gambling, or maybe because of it, I don't consider myself a big gambler.
--:-- Alex Haberkern: When you work in the industry, it's kind of hard to want to go back and just be there casually too. Like I do go to the casino occasionally, but I wouldn't say that gambling would be my favorite thing just because I see it every day.
--:-- Alex Haberkern: There is one thing I really love betting on, though. Football games, using apps like FanDuel and DraftKings.
--:-- Alex Haberkern: And one Sunday last December, I made a particularly wild bet. It was before I was going to work, and I had a free $10 bonus. It was like a last-minute thing that I was like, it expired if you didn't use it.
--:-- Alex Haberkern: So I was like, okay. I started stringing together a complicated sequence of bets. I bet that Justin Jefferson of the Minnesota Vikings would get 80 receiving yards.
--:-- Alex Haberkern: That James Cook of the Buffalo Bills would score a touchdown. In the Steelers-Bengals game, I bet that both Jamar Chase and Najee Harris would find the end zone.
--:-- Alex Haberkern: And then the rest just kind of kept going. Most of them were just scorers. Derrick Henry needed 80 yards. Saquon Barkley needed 80 yards.
--:-- Alex Haberkern: Jalen Hurts had a scorer. Kyron Williams had to score. And then, of course, Cooper Cup needed 70 yards.
--:-- Ryan Knudson: So you weren't just betting that these things would happen individually. You were making a bet called a parlay.
--:-- Alex Haberkern: For me to get a payout, all 14 of those things needed to happen. And the odds of all of those things happening were long. Very, very long.
--:-- Ryan Knudson: Like 66-yard field goal long.
--:-- Alex Haberkern: But if the parlay worked, the payout would be massive. Let me see the exact payout. Hold on. It was $21,921. Almost $22,000 off a free $10 bonus bet.
--:-- Ryan Knudson: That's like life-changing money to me. I'm planning a wedding. We're looking to build a house. Like, that could do a lot for me.
--:-- Alex Haberkern: So I was like, it's a free bet. We'll risk it.
--:-- Ryan Knudson: So when you make this bet, how were you thinking about it? Were you like, this is silly?
--:-- Alex Haberkern: A hundred percent. A hundred percent. I was like, this is so stupid.
--:-- Ryan Knudson: And like, I tell my fiancé my bets every week when I place them because he puts a couple things together, but it's like very small.
--:-- Alex Haberkern: Like he does very realistic things. And I'm like, oh, you want to hear the like stupidity I have going today?
--:-- Ryan Knudson: But sometimes you get lucky. That dream of getting lucky has propelled parlays to the very center of the sports betting world.
--:-- Ryan Knudson: And these long-shot bets are solving some big business problems for the gambling industry.
--:-- Ryan Knudson: Welcome to The Journal, our show about money, business, and power. I'm Ryan Knudson.
--:-- Ryan Knudson: Coming up on the show, how parlays became the biggest bet in sports.
--:-- Ryan Knudson: CRM was supposed to improve customer relationships. Instead, it's shorthand for can't resolve much.
--:-- Ryan Knudson: Which means you may have sunk a fortune into software that just bounces customer issues around but never actually solves them.
--:-- Ryan Knudson: On the ServiceNow AI platform, CRM stands for something better.
--:-- Ryan Knudson: With AI built into one platform, customers aren't mired in endless loops of automated indifference.
--:-- Ryan Knudson: They get what they need when they need it.
--:-- Ryan Knudson: Bad CRM was then. This is ServiceNow.
--:-- Ryan Knudson: This episode is brought to you by Indeed.
--:-- Ryan Knudson: When your fridge stops working, you don't sit around waiting for all your food to spoil.
--:-- Ryan Knudson: You find a solution.
--:-- Ryan Knudson: So why wait to hire the people your company desperately needs?
--:-- Ryan Knudson: Use Indeed Sponsored Jobs to find great talent fast.
--:-- Ryan Knudson: It moves your job post to the top of the page, so it's the first thing relevant candidates see when they start searching.
--:-- Ryan Knudson: And it truly does make a difference.
--:-- Ryan Knudson: Sponsored jobs receive 45% more applications than non-sponsored jobs, according to Indeed data.
--:-- Ryan Knudson: Plus, with sponsored jobs, there are no monthly subscriptions or long-term contracts.
--:-- Ryan Knudson: You're only paying for results.
--:-- Ryan Knudson: There's no need to wait any longer.
--:-- Ryan Knudson: Speed up your hiring right now with Indeed.
--:-- Ryan Knudson: Listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed.com slash journal.
--:-- Ryan Knudson: That's Indeed.com slash journal right now.
--:-- Ryan Knudson: And support the show by saying you heard about Indeed on this podcast.
--:-- Ryan Knudson: Indeed.com slash journal.
--:-- Ryan Knudson: Terms and conditions apply.
--:-- Ryan Knudson: Hiring Indeed is all you need.
--:-- Ryan Knudsen: How long have you been covering the gambling industry now?
--:-- Catherine Sayre: A little. Well, I've been covering it for five and a half years.
--:-- Ryan Knudsen: Changed a lot during that time.
--:-- Catherine Sayre: It has, for sure.
--:-- Ryan Knudsen: That's our colleague Catherine Sayre.
--:-- Ryan Knudsen: And she says that lately, the sports betting industry has been going through some growing pains.
--:-- Ryan Knudsen: How business for sports betting apps right now?
--:-- Catherine Sayre: Sports betting is still a relatively new industry in the U.S.
--:-- Catherine Sayre: It's been a fierce competitive landscape. DraftKings, FanDuel, these other competitors have just poured money into their marketing, advertising, giving away these bonus bets, as they call it, credits you can use when you sign up.
--:-- Catherine Sayre: And so they are under pressure to become profitable.
--:-- Ryan Knudsen: Despite this saying, the house can, in fact, lose.
--:-- Catherine Sayre: And this past NFL season, betting apps have been losing.
--:-- Catherine Sayre: And gamblers have been on a hot streak.
--:-- Catherine Sayre: That's because people are more likely to bet on the teams that are favored to win.
--:-- Catherine Sayre: And there have been fewer upsets in the NFL this year.
--:-- Ryan Knudsen: Yeah, so FanDuel and DraftKings had to report to investors that they're going to get less revenue than they were expecting because so many favorites won in the NFL season that customers' bettors were beating the books this season.
--:-- Ryan Knudsen: Combined, DraftKings and FanDuel expect to make hundreds of millions of dollars less this year than previously thought because so many customers have been winning.
--:-- Ryan Knudsen: As the DraftKings CEO put it, the company had, quote, experienced the most customer-friendly stretch of NFL sport outcomes we have ever seen.
--:-- Ryan Knudsen: You know, we're talking about gambling. No one can really predict the future.
--:-- Ryan Knudsen: The sports book's going to do their best, but what plays out on the field is out of their control.
--:-- Ryan Knudsen: Another problem for the gambling industry has to do with its reputation.
--:-- Ryan Knudsen: Companies have faced criticism from lawmakers and gambling addiction advocates for relying on heavy gamblers for much of their business, or as the industry calls them, VIPs.
--:-- Ryan Knudsen: VIPs are sometimes known as whales. These are the bettors who are placing huge sums of money on games.
--:-- Ryan Knudsen: So $10,000, $20,000.
--:-- Ryan Knudsen: And these are the most profitable bettors for these companies.
--:-- Ryan Knudsen: So the companies have focused on them, giving them freebies, betting credits, tickets to games.
--:-- Ryan Knudsen: Just that VIP treatment that will keep them spending.
--:-- Ryan Knudsen: The problem with VIPs, though, is that some of them are spending way more money than they can afford to lose.
--:-- Ryan Knudsen: And gambling companies are required to have responsible gambling practices.
--:-- Ryan Knudsen: You're talking about people who are spending tens of thousands of dollars, hundreds of thousands of dollars in some cases.
--:-- Ryan Knudsen: You know, companies are risking fueling addiction through these programs.
--:-- Ryan Knudsen: DraftKings and FanDuel have said they're committed to promoting responsible gambling and protecting consumers.
--:-- Ryan Knudsen: So the companies really want to expand that casual bettor base, get people who bet less, but bet regularly, and more of those people to create that less risky customer base.
--:-- Ryan Knudsen: Rather than rely so heavily on VIPs, sports betting companies are trying to court more customers like Alex.
--:-- Ryan Knudsen: I think I do at max like $5 for a parley, maybe $10 if I'm feeling like generous or I just won or something.
--:-- Ryan Knudsen: Customers that don't bet a ton, but keep coming back for a good time and the possibility of that dream payout.
--:-- Alex Haberkern: Alex had no expectation of winning her 14-leg parlay.
--:-- Alex Haberkern: Her elaborate bet was just for fun.
--:-- Ryan Knudsen: But as she was getting ready to go to work that Sunday afternoon, she said she started to notice something.
--:-- Alex Haberkern: Some of my bets were hitting.
--:-- Alex Haberkern: For Pittsburgh. I think it was the end of the Steelers-Bengals game.
--:-- Alex Haberkern: And a catch! Jamar Chase got his 80 yards.
--:-- Alex Haberkern: That's when I was like, okay, this might happen.
--:-- Alex Haberkern: And I go to work.
--:-- Alex Haberkern: We have all the TVs at work, so I was watching everything.
--:-- Alex Haberkern: And little by little, throughout my shift, things were happening.
--:-- Alex Haberkern: Alex had needed the Texans' Nico Collins to get 70 receiving yards.
--:-- Alex Haberkern: He did.
--:-- Alex Haberkern: And here's Nico Collins with a catch.
--:-- Alex Haberkern: She needed Jamar Chase to get a touchdown.
--:-- Alex Haberkern: Step up, deliver.
--:-- Alex Haberkern: And he did too.
--:-- Alex Haberkern: Touchdown, Jamar Chase.
--:-- Alex Haberkern: Alex was starting to feel hopeful.
--:-- Alex Haberkern: And she wasn't the only one.
--:-- Alex Haberkern: All around her bar at the poker table, the excitement was building.
--:-- Alex Haberkern: I had talked to my regulars about the bet, so they were keeping me updated if I was busy doing little things.
--:-- Alex Haberkern: So they'd be like, oh, so-and-so just scored.
--:-- Alex Haberkern: High, one-handed, hold in, and that's a touchdown for Mike Evans.
--:-- Alex Haberkern: And I think little by little, I was like, okay, wait, maybe this has a chance.
--:-- Ryan Knudsen: How were you feeling when you thought you could possibly win this much money?
--:-- Alex Haberkern: Oh, I was texting my fiancé.
--:-- Alex Haberkern: I was like, oh, we are paying for our wedding.
--:-- Alex Haberkern: We're going on vacation.
--:-- Alex Haberkern: We're doing this.
--:-- Alex Haberkern: I have our honeymoon.
--:-- Alex Haberkern: Like, I was just creating plans in my head.
--:-- Alex Haberkern: I was like, we got this, like, covered.
--:-- Alex Haberkern: We're good.
--:-- Ryan Knudsen: Things were looking up for Alex.
--:-- Ryan Knudsen: With only a few bets left in her parlay, it seemed like she was going to score.
--:-- Ryan Knudsen: What happened next is after halftime.
--:-- Ryan Knudsen: Halftime
--:-- Ryan Knudsen: This is the battle for the next big idea.
--:-- Ryan Knudsen: This is not play play.
--:-- Ryan Knudsen: We're spending millions of dollars.
--:-- Ryan Knudsen: I'm so excited to embark on this adventure with all of you.
--:-- Ryan Knudsen: Make the best idea win!
--:-- Ryan Knudsen: On brand with Jimmy Fallon.
--:-- Ryan Knudsen: Series premiere Tuesday on NBC.
--:-- Ryan Knudsen: Hey, business owners.
--:-- Ryan Knudsen: We know you know the importance of maximizing every dollar.
--:-- Ryan Knudsen: With the Delta SkyMiles Reserve Business American Express card, you can make your expenses work just as hard as you.
--:-- Ryan Knudsen: From afternoon coffee runs to stocking office supplies and even team dinners, you can earn miles on all your business expenses.
--:-- Ryan Knudsen: Plus, you can earn 125,000 bonus miles for a limited time through October 29th.
--:-- Ryan Knudsen: The Delta Sky Miles Reserve Business Card.
--:-- Ryan Knudsen: If you travel, you know.
--:-- Ryan Knudsen: Minimum spending requirements and terms apply.
--:-- Ryan Knudsen: Offer ends October 29th, 2025.
--:-- Ryan Knudsen: Parlays and sports betting have been around for a long time.
--:-- Ryan Knudsen: But historically, the only kind of parlay you could do was to string games together.
--:-- Ryan Knudsen: Like betting that the Patriots, the Jets, and the Raiders would all win on the same day, which this NFL season was extremely unlikely.
--:-- Ryan Knudsen: But a few years ago, FanDuel got an idea.
--:-- Ryan Knudsen: So FanDuel's parent company, Flutter, has a sports betting brand in Australia called SportsBet.
--:-- Ryan Knudsen: And they heard from a gambler who was like, hey, I know I can make a parlay bet on different games, but why can't I make some predictions within one game and bet on that?
--:-- Ryan Knudsen: And so the math behind that's complicated.
--:-- Ryan Knudsen: They got to work on it and they figured it out and started offering it.
--:-- Ryan Knudsen: The same game Parlay was born and FanDuel brought it to the U.S. in 2019.
--:-- Ryan Knudsen: Now you could string together a bunch of bets about what would happen in a single game, like that Patrick Mahomes and Jalen Hurts would both throw a touchdown pass, which during this weekend's Super Bowl is extremely likely.
--:-- Ryan Knudsen: When did you start to see it really kind of take off?
--:-- Ryan Knudsen: Like, when did you start to see consumers really responding to them?
--:-- Ryan Knudsen: Same-game parlays took off almost immediately.
--:-- Ryan Knudsen: As soon as Fandle put these out, the companies could tell it was taking off.
--:-- Ryan Knudsen: The competitors all quickly followed.
--:-- Ryan Knudsen: Now, ads for parlays are everywhere.
--:-- Ryan Knudsen: Same-game parlays on Fandle are the best way to bet on your favorite players.
--:-- Ryan Knudsen: Former NBA star Charles Barkley pitches his same game, Barkley.
--:-- Ryan Knudsen: And comedian Kevin Hart shares his picks on social media, sponsored by DraftKings.
--:-- Ryan Knudsen: That is my week one touchdown parlay.
--:-- Ryan Knudsen: You're welcome.
--:-- Ryan Knudsen: But the hype isn't just coming from paid spokespeople.
--:-- Ryan Knudsen: Parlays have taken off in social media.
--:-- Ryan Knudsen: Finally, we hit a parlay!
--:-- Ryan Knudsen: We hit a parlay!
--:-- Ryan Knudsen: Monday's bet hit.
--:-- Ryan Knudsen: Last night's bet hit.
--:-- Ryan Knudsen: Did the Sixers make us sweat it a little bit?
--:-- Ryan Knudsen: Yeah, but of course that's what they do.
--:-- Ryan Knudsen: It's become its own little ecosystem doing the marketing for these companies, right?
--:-- Ryan Knudsen: So people who are touting their big wins, they're posting their bet slips, which is, you know, shows their parlays.
--:-- Ryan Knudsen: They say, follow along with me, tail me, which means make the same bet.
--:-- Ryan Knudsen: Let's see if we can win this.
--:-- Ryan Knudsen: By the time the 4 o'clock games were kicking off, Alex was starting to think that she could win her bet.
--:-- Ryan Knudsen: Each leg kept hitting.
--:-- Ryan Knudsen: Joe Mixon had scored a touchdown, and Mike Evans got one too.
--:-- Ryan Knudsen: Her bet went from looking like a ridiculous long shot to something that could actually happen.
--:-- Ryan Knudsen: And then the L.A. Rams took the field.
--:-- Ryan Knudsen: Alex needed running back Kyron Williams to get a touchdown, which he did.
--:-- Ryan Knudsen: and she needed wide receiver Cooper Cup to get 70 receiving yards, which was one leg of her bet that actually had pretty good odds.
--:-- Ryan Knudsen: So I think it was around halftime of the Rams game and I had checked the stats because I wasn't really paying attention because I had gotten busy and Cooper Cup had 17 yards.
--:-- Ryan Knudsen: Former Super Bowl MVP Cooper Cup.
--:-- Ryan Knudsen: A little more than halfway through the game, he was more than 50 yards short of what Alex needed.
--:-- Ryan Knudsen: Still, it wasn't over yet.
--:-- Ryan Knudsen: So I was like, OK, it's OK, possibly.
--:-- Ryan Knudsen: And then I think the third quarter happened and I was on break and we have a TV in the break room.
--:-- Ryan Knudsen: And he still he wasn't even getting the ball like there wasn't even targets.
--:-- Ryan Knudsen: There was nothing like he basically was just dead to the Rams team.
--:-- Ryan Knudsen: And he's normally a receiver that catches a lot of passes.
--:-- Ryan Knudsen: Normally.
--:-- Ryan Knudsen: And at that point, I even I stopped looking.
--:-- Ryan Knudsen: I didn't want to know I didn't because I was like I don't care how many yards he has at this point.
--:-- Ryan Knudsen: Like he it going to lose
--:-- Ryan Knudsen: So I think by the third quarter I just called it quits and I was like maybe I just get lucky open my phone and my balance will say Cup never had another catch.
--:-- Ryan Knudsen: It was his second worst game of the season.
--:-- Ryan Knudsen: By the end of the day, every single one of Alex's other bets hit 13 out of 14.
--:-- Ryan Knudsen: Cooper Cup was the only player who didn't deliver.
--:-- Ryan Knudsen: Alex's $22,000 dream had disappeared.
--:-- Ryan Knudsen: Alex had beaten the odds, but not enough to win.
--:-- Ryan Knudsen: And that's what betting apps are betting on.
--:-- Ryan Knudsen: Bettors just lose more on parlays.
--:-- Ryan Knudsen: The odds are so long.
--:-- Ryan Knudsen: So for example, FanDuel is offering a four-leg same-game parlay on the Super Bowl this weekend, where you're going to bet that Saquon Barkley, Xavier Worthy, Kareem Hunt, and Jalen Hurts will all score a touchdown in the game.
--:-- Ryan Knudsen: If all that happens, someone who bet $10 would win $170 as of Friday morning.
--:-- Ryan Knudsen: But the implied probability of all those bets hitting is less than 6%.
--:-- Ryan Knudsen: By comparison, someone making a standard bet, like that the Chiefs will win the Super Bowl, according to one betting app, the implied odds of that are a nearly 55% chance of winning.
--:-- Ryan Knudsen: That's a big difference.
--:-- Ryan Knudsen: It's huge.
--:-- Ryan Knudsen: It's huge.
--:-- Ryan Knudsen: And you would think gamblers might shy away from that, but apparently they're not.
--:-- Ryan Knudsen: I know that generally with gambling, the odds favor the house.
--:-- Ryan Knudsen: But did the odds favor the house more with parlays?
--:-- Ryan Knudsen: Sportsbooks are trying to protect their bottom line.
--:-- Ryan Knudsen: How they set the odds are critical to their business.
--:-- Ryan Knudsen: With parlays, the setting of odds gets really complicated because what you're betting on those events how a quarterback performs and how a tight end performs they're tied together.
--:-- Ryan Knudsen: So if the quarterback's having a terrible game, good chances are the tight end won't be having a great game either.
--:-- Ryan Knudsen: So they use lots of math modeling looking at what's happening in sports news to set these odds.
--:-- Ryan Knudsen: But they're going to figure out what they think are the actual odds of that parlay, and then they're going to set the odds even more in their favor to protect their bottom lines.
--:-- Ryan Knudsen: And to a certain extent, it's sort of a mystery about how they're doing this.
--:-- Ryan Knudsen: However they're doing it, it's working.
--:-- Ryan Knudsen: Today, parlays represent a huge chunk of the sports betting business.
--:-- Ryan Knudsen: In Illinois, New Jersey, and Colorado, states that break out this data, parlays accounted for about 56% of sports betting revenue last year.
--:-- Ryan Knudsen: So it's clear that the companies see this as the future of the business.
--:-- Ryan Knudsen: So are you making any bets for the Super Bowl this weekend?
--:-- Ryan Knudsen: I haven't even looked, honestly.
--:-- Ryan Knudsen: I'll tell myself I won't do it, and then I'll probably pull it up Sunday morning right before I go to work and be like, you know what, let's place a couple just just to make it interesting for myself because I don't really care about who wins.
--:-- Ryan Knudsen: And do you think that you'll do a parlay bet?
--:-- Ryan Knudsen: Yes, always.
--:-- Ryan Knudsen: I'm never going to pick one side.
--:-- Ryan Knudsen: I always have to do the parlay.
--:-- Ryan Knudsen: It makes them more interesting.
--:-- Ryan Knudsen: Back at the casino where Alex works, her close call on that 14-leg parlay has become a bit of a legend.
--:-- Ryan Knudsen: Her regulars still bring it up.
--:-- Ryan Knudsen: I still have some come in.
--:-- Ryan Knudsen: They're like, oh, do you remember the day we were all sitting here and you were supposed to win?
--:-- Ryan Knudsen: I had a guy that I was, his name's Mike.
--:-- Ryan Knudsen: He was sitting at the bar with me on Sunday because I work Sunday nights.
--:-- Ryan Knudsen: And he's like, I still can't believe that Cooper Cup, blah, blah, blah.
--:-- Ryan Knudsen: He's like, I haven't placed a bet on him since that day.
--:-- Ryan Knudsen: So it gets brought up a couple of times.
--:-- Ryan Knudsen: Is there anything that you'd like to say to Cooper Cup here on the podcast who did not meet his target?
--:-- Alex Haberkern: No.
--:-- Alex Haberkern: I mean, I'm upset.
--:-- Alex Haberkern: It's okay, Cooper. I forgive you, I guess.
--:-- Alex Haberkern: But, you know, a little compensation for losing my bet would have been nice.
--:-- Ryan Knudsen: With help from Trina Menino.
--:-- Ryan Knudsen: Our engineers are Griffin Tanner, Nathan Singapak, and Peter Leonard.
--:-- Ryan Knudsen: Our theme music is by So Wiley.
--:-- Ryan Knudsen: Additional music this week by Thanks for listening.
--:-- Ryan Knudsen: See you Monday.
