--:-- Sean Rameswaram: Remember when sports betting wasn't everywhere you looked in this country? Back in the 90s, Congress passed a pretty sweeping ban on sports betting across the United States.
--:-- Host: This is a pretty universally popular law. It passes overwhelmingly. All the sports leagues speak out in favor of it. It's the law of the land between 1992 and 2018.
--:-- Host: It wasn't until 2018 that the Supreme Court stepped in and basically undid that law. Since then, almost all of the states have gone ahead and legalized sports betting.
--:-- Host: The American Gaming Association estimates that last year Americans bet over $100 billion on sports. Something like one in three Americans now bets on sports. It's everywhere. It's on your phone. It's on TV. ESPN, which is to say Disney, now runs its own sports book. Mickey Mouse is now a bookie.
--:-- Host: That's completely correct. Pay up or I'll break your knees.
--:-- Sean Rameswaram: Charles here says legalization was a terrible mistake. He's going to tell us why on Today Explained. Support for Today Explained comes from BetterHelp.
--:-- Host: Let me tell you a true story. Last weekend, I got an email from a listener who wanted to discuss their problems with me. And I said, look, I don't think that this is about me personally. At least I hope it's not. Why don't you try betterhelp.com slash explained?
--:-- Host: Absolute truth. As the largest online therapy provider in the world, BetterHelp can provide access to mental health professionals with a diverse variety of expertise. Find the one with BetterHelp. The one is not me, guys.
--:-- Sean Rameswaram: Our listeners get 10% off their first month at betterhelp.com slash explained. That's betterhelp.com slash explained.
--:-- Host: Having a night out with your friends is awesome. Dealing with hangovers sucks. Meet Senorita, the THC-infused margarita that lets you skip the booze but keep the vibe.
--:-- Host: Made with real fruit, organic agave, and Himalayan pink salt, every sip is like a mini getaway. No fillers, no hangovers, just full flavor and a better buzz. Find your flavor at senoritadrinks.com. Use code VOX20 for 20% off. Must be 21 and over.
--:-- Host: This product may cause intoxication. This product has not been evaluated or approved by the FDA. This product may contain up to 0.3% THC.
--:-- Sean Rameswaram: Listen up. It's Today Explained. Charles Fain Lehman wrote a piece for The Atlantic this year titled, Legalizing Sports Gambling Was a Huge Mistake.
--:-- Charles Fain Lehman: We got holidays coming up. There's lots of sports to watch. Felt like a good time to ask him why he wrote that.
--:-- Charles Fain Lehman: When you do the sort of cost-benefit math, gambling looks like any other addictive substance, which is that most of the people who participate in it get some small sort of utilitarian hedonic benefit.
--:-- Charles Fain Lehman: They get some fun out of it. And then a smaller subset of those people will become seriously addicted and do serious harm to themselves, to others, and potentially ruin their lives.
--:-- Charles Fain Lehman: You know, I'd stop for a week or a month or whatever it was, and then I'd realize I still have this credit card bill to pay, or I can't believe what I did. I have to win this money back, or I have to keep playing.
--:-- Charles Fain Lehman: Gambling addiction is associated with all sorts of terrible outcomes, including loss of your home, loss of family, loss of life through personal action.
--:-- Charles Fain Lehman: And so we've created this enormous concentrated social harm, And in return, we've gotten some kind of anemic tax revenue and a bunch of ads everywhere.
--:-- Sean Rameswaram: It just doesn't seem like a worthwhile tradeoff to me.
--:-- Charles Fain Lehman: I don't. I don't. And I don't like it for the reasons that I'm skeptical of a lot of rice goods.
--:-- Charles Fain Lehman: And I think we tend to systematically underrate their harms. But the problems are the same in every case, which is that they concentrate in a small number of users who will do the overwhelming majority of the using and will experience the overwhelming majority of the harm.
--:-- Charles Fain Lehman: And everybody else is sort of benefiting off of their backs, which is an alarming arrangement to me.
--:-- Sean Rameswaram: Do we actually have any receipts, Charles, of the widespread legalization of sports gambling increasing how many lives are ruined due to legal sports betting in this country?
--:-- Charles Fain Lehman: Yeah, absolutely. And I think at this point, many Americans know somebody who's been affected by this. Many Americans know people in the hole.
--:-- Charles Fain Lehman: I was at a wedding recently and a friend of mine from college told me about a friend of his back home in Erie, Pennsylvania. He works at the post office. Not a well-off guy who's $28,000 in the hole on sports betting.
--:-- Charles Fain Lehman: Just a tremendous problem. The interesting thing about gambling legalization, we have information on this mostly from the UK's experience.
--:-- Charles Fain Lehman: The UK's experience is pretty grim. There's one estimate that says 8% of all completed suicides in the UK are attributable to sports gambling addiction.
--:-- Charles Fain Lehman: Yikes. That's not great. But the thing about the US context is to sort of try to simplify it. Because gambling was legalized in different states at different times, economists can use a fairly specific set of methods to isolate the causal effect of sports gambling, not just sort of the correlates of sports gambling, really what sports gambling causes on a number of different outcomes.
--:-- Charles Fain Lehman: One of the studies that I point to from economists at Northwestern University estimates that for every dollar spent on sports gambling, households put $2 less into investment accounts.
--:-- Charles Fain Lehman: There are big increases in the risk of overdrafting a bank account or maxing on a credit card. There's another paper from economists at UCLA and USC looking specifically at online sports gambling, and they find that legalization increases the risk of bankruptcy by 25 to 30 percent, which is a big relative risk increase against a small baseline, but still.
--:-- Charles Fain Lehman: And the other thing that really sticks out in those studies is that the harms tend to concentrate among the most economically precarious, right? The people with a history of overdraft end up overdrafting more.
--:-- Charles Fain Lehman: There is sort of ecological evidence that the harms tend to concentrate in the areas with highest levels of poverty, that they also tend to concentrate among young men who are already at risk for all sorts of, frankly, not great financial decision making.
--:-- Charles Fain Lehman: And so it seems like it's not just that gambling harm befalls some people. It's that gambling harm befalls often the people who can least afford to have it come down on them.
--:-- Sean Rameswaram: Like the guy I was talking about earlier, who's nearly 30 grand in the hole working at the post office.
--:-- Charles Fain Lehman: Do we know how much money on average people are losing versus, say, they're winning?
--:-- Charles Fain Lehman: Yeah, actually. So there's another study from folks at Southern Methodist University, where they have a panel of 700 sports bettors.
--:-- Charles Fain Lehman: And they show a couple of really interesting things. So only about 5% of people in the panel withdrew more from the apps than they deposited, so 95% of people are losing money.
--:-- Charles Fain Lehman: Wow. That's actually not the interesting thing. The really interesting thing is that about 3% in their estimate, about 3% of bettors drive 50% of sports gambling profits.
--:-- Charles Fain Lehman: And this, just to go back to the conversation earlier, is what you see in all markets in addictive goods. They follow what's sometimes called a Pareto distribution or power law distribution.
--:-- Charles Fain Lehman: 5 to 10 percent of the people who are doing the consuming will do 80 to 90 percent of the consuming. And that's pretty clearly true here as well.
--:-- Sean Rameswaram: How much does the amount people are losing, the amount people are betting, the amount people are gambling altogether have to do with how much gambling has changed with the little devices that we keep in our pockets?
--:-- Charles Fain Lehman: It's a big part of the story in more ways than one. You know, one component of it is just it's much more readily available, which is to say if I have to go to a casino to gamble, I may not want to take the time out of my day.
--:-- Charles Fain Lehman: I may not make the effort at the margin. I may not get drawn in. And so over the long run, you generate fewer people who are addicted because they never get exposed in the first place.
--:-- Charles Fain Lehman: This is the virtue of keeping gambling in Las Vegas. You have to go to Vegas to do it. Remember, what happens in Vegas stays in Vegas.
--:-- Charles Fain Lehman: But then I think, to my mind, the much more alarming thing is that app-based gaming facilitates algorithmic discrimination on the part of the sportsbook provider.
--:-- Charles Fain Lehman: They can tell, it's actually trivial to tell with modern methods, who the people are who are going to spend the most. They know when you check your bets in the middle of the night.
--:-- Charles Fain Lehman: They know when you are watching the game. They know what you are doing and how much you are betting. And then what they can do is algorithmically reinforce that.
--:-- Charles Fain Lehman: They can make you offers. They can assign you a personal concierge who encourages you to bet more. This is actually what they do at casinos in Vegas.
--:-- Charles Fain Lehman: If you are a whale, a big spender, you'll get all sorts of good stuff comped. But instead of that happening in sort of a dingy hotel or even a glamorous hotel, that's happening on your phone all day, every day, until they get all of your money.
--:-- Sean Rameswaram: It's quite clear from speaking with you, Charles, that there's a lot of harm being introduced to this entire country, but certainly states across the country from legal sports betting.
--:-- Sean Rameswaram: And it's especially hitting young men. But it was legalized with the promise that it was going to bring a lot of benefits to the states that approved it.
--:-- Charles Fain Lehman: You seem to believe that isn't paying off.
--:-- Charles Fain Lehman: Yeah. And, you know, I think that there are a few arguments here. One is tax revenue, and that's a big selling point.
--:-- Charles Fain Lehman: Yeah. And the reality is that the tax revenue has been pretty anemic. If you look at the census figures from QTACS, say you look at the 38 legal states in their most recent count, together, gambling is generating about half a billion dollars a quarter, which is not nothing.
--:-- Charles Fain Lehman: But is a drop in the bucket compared to not just most state revenue needs, but also substantially less than you get from alcohol, tobacco, or marijuana, which is legal in fewer states.
--:-- Charles Fain Lehman: So it's not even a particularly revenue-generating syntax. Another argument is that you would reduce the reach of the offshore gambling sites.
--:-- Charles Fain Lehman: That doesn't really appear to be happening. There's a survey, I think, out of Massachusetts, where they found that bettors were just as likely to use unauthorized betting sites after legalization.
--:-- Charles Fain Lehman: But it makes sense. If you're an active sports bettor, you're betting on multiple sports books. You're trying to get as much action as possible.
--:-- Charles Fain Lehman: And so the offshore sites are just complements. They aren't substitutes. And then the third argument is one that I think we should take seriously, which is like the hedonic benefits and the sort of individual liberty benefits.
--:-- Sean Rameswaram: But as I talked about earlier, you know, A, we didn't live in a terrible dictatorship in 2017. If you and I made a bet together, neither was it at any risk of going to jail.
--:-- Sean Rameswaram: That was it was not illegal for us to make up an interpersonal bet. The thing that was illegal was for big businesses and states to get involved in the action.
--:-- Sean Rameswaram: And, you know, I'm just not that upset about restricting the liberty of, like, the state of Georgia or Fluttershy to get involved in your and my bets.
--:-- Sean Rameswaram: So, you know, that argument doesn't hold a lot of water with me either.
--:-- Sean Rameswaram: Charles Fain Lehman. He mostly writes about drugs but makes exceptions for gambling. He's a fellow at the Manhattan Institute and a contributing editor at City Journal, city-journal.org.
--:-- Sean Rameswaram: All the sports betting isn't just changing the experience for fans, it's changing the experience for athletes, too. We're going to hear from a pretty good one when we're back on Today Explained.
--:-- Sean Rameswaram: Support for Today Explained comes from Chime.
--:-- Sean Rameswaram: Nobody likes fees and complicated banking, says Chime. And Chime gets that, says Chime.
--:-- Sean Rameswaram: Chime is a financial technology company that says they understand that every dollar counts.
--:-- Sean Rameswaram: So when you set up direct deposit through Chime, they say you get access to fee-free features, such as free overdraft coverage, getting paid up to two days early with direct deposit, so much more.
--:-- Sean Rameswaram: Chime says with qualifying direct deposits, you can be eligible for free overdraft up to $200 on debit card purchases and cash withdrawals.
--:-- Sean Rameswaram: Plus, they say you don't need to worry about monthly fees or maintenance fees.
--:-- Sean Rameswaram: You can work on your financial goals through Chime today. You can open an account in two minutes at chime.com slash explained.
--:-- Sean Rameswaram: That's chime.com slash explained. Chime feels like progress.
--:-- Sean Rameswaram: Chime is a financial technology company, not a bank. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC.
--:-- Sean Rameswaram: Spot me eligibility requirements and overdraft limits apply. Timing depends on submission of payment file.
--:-- Sean Rameswaram: Fees apply at out-of-network ATMs. Bank ranking and number of ATMs according to U.S. News and World Report 2023.
--:-- Sean Rameswaram: Chime checking account required.
--:-- Sean Rameswaram: This message is brought to you by Apple Card.
--:-- Sean Rameswaram: Each Apple product, like the iPhone, is thoughtfully designed by skilled designers.
--:-- Sean Rameswaram: The Titanium Apple Card is no different. It's laser-etched, has no numbers, and it earns you daily cash on everything you buy, including 3% back on everything at Apple.
--:-- Sean Rameswaram: Apply for Apple Card on your iPhone in minutes. Subject to credit approval, Apple Card is issued by Goldman Sachs Bank USA, Salt Lake City Branch.
--:-- Sean Rameswaram: Terms and more at applecard.com.
--:-- Sean Rameswaram: Support for Today Explained comes from Upwork.
--:-- Sean Rameswaram: If you run a business, you know that scaling your business requires the right expertise at the right time.
--:-- Sean Rameswaram: I sometimes wonder how many of you are running businesses out there I would love to know please email me noelle at king With Upwork you can find specialized freelancers in IT web development AI design admin support marketing, and more.
--:-- Sean Rameswaram: Experts who they say are ready to help you take your business to the next level.
--:-- Sean Rameswaram: With more than two decades of experience, Upwork has a simple and ambitious goal to pioneer a better way of working.
--:-- Sean Rameswaram: Companies at every stage turn to Upwork to get things done and find more flexibility in the way they staff key projects and initiatives by accessing a global marketplace full of top talent.
--:-- Sean Rameswaram: Plus, Upwork makes posting your job easy with no cost to join.
--:-- Sean Rameswaram: You can register, browse freelancer profiles, get help drafting a job post, or even book a consultation.
--:-- Sean Rameswaram: You can visit Upwork.com right now and post your job for free. That is Upwork.com to post your job for free and connect with top talents ready to help your business grow.
--:-- Sean Rameswaram: That's U-P-W-O-R-K.com, Upwork.com.
--:-- Sean Rameswaram: Today explained it's back and I'll be back too for my money.
--:-- Sean Rameswaram: Danny Green didn't just win one NBA championship he won three with three different teams including my Toronto Raptors for which I had to thank him no thanks necessary it was my pleasure.
--:-- Sean Rameswaram: All that winning served as inspiration when it came time to name his son. His name is Wynn.
--:-- Sean Rameswaram: Wynn? Yeah. Like W-I-N. Yes, like I win, you lose.
--:-- Sean Rameswaram: So yeah, he's part of the brand. It's on brand. And he was a celebration himself because we weren't sure if we were able to have him naturally.
--:-- Sean Rameswaram: And he did happen naturally. So he was a Wynn.
--:-- Sean Rameswaram: Danny's got time to spend with Wynn and talk to us because he just retired from professional basketball.
--:-- Sean Rameswaram: But he played in the NBA for 15 years and witnessed the boom in sports betting firsthand from the court.
--:-- Sean Rameswaram: And it was a far cry from what he saw when he was starting out as a college player almost 20 years ago.
--:-- Sean Rameswaram: Very illegal. Everything was illegal. There was no NIL. There was none of that. Everything was illegal.
--:-- Sean Rameswaram: By the time Danny's ready to retire from the NBA, he's not just getting yelled at by an opposing player or his coach.
--:-- Sean Rameswaram: There are fans who are mad about their parlay getting messed up. So you messing up someone's parlay or messing up someone's gambling bet on you is that they took you for usually over a certain amount of points, rebounds, or assists, or all the above together.
--:-- Sean Rameswaram: And it's like, all right, sometimes a parlay may be Boston is going to win by plus six and a half, and then so-and-so is going to lose by minus four and a half.
--:-- Sean Rameswaram: And then this player is going to get over 10 rebounds. This player is going to get over six assists. This person is going to get over two and a half three-pointers made.
--:-- Sean Rameswaram: That's usually, I'm one of those guys. At least one and a half, three-pointers made.
--:-- Sean Rameswaram: And if you win or if you get hit on all these people that you gamble on, risk is a big payout. And they might get nine out of the ten.
--:-- Sean Rameswaram: And if you're the one out of the ten that doesn't get that one and a half threes or two and a half threes for them, they're going to cuss you out.
--:-- Sean Rameswaram: Because they were this short of turning $5 into $25,000. You know what I'm saying? Right.
--:-- Sean Rameswaram: That's ultimately what a parlay is.
--:-- Sean Rameswaram: So tell me, when you're playing towards the end of your career and sports betting has become a daily part of the conversation, when you think back to those days, which aren't that long ago, did you ever get the impression on the court that someone was mad at you for a given play or for some?
--:-- Danny Green: Yes, 100%. Like, if you score at the end of the game, you might mess up the spread.
--:-- Danny Green: You turn the ball over or whatever it is. Or if you lose a game that you were favored in, we are more aware of it.
--:-- Danny Green: And it's brought to our attention. Do we care? No. But my initial reaction, to be honest, is damn, damn, damn.
--:-- Sean Rameswaram: Players aren't scared of that? They're not worried about fans and their various bets?
--:-- Danny Green: No. It's a risk. It's called gamble for a reason.
--:-- Danny Green: And if you want to risk your house or your life or your life savings on something, obviously our job is to play basketball.
--:-- Danny Green: It's a physical performing type of game. And as much as we want to play well, we can't control every night that we're going to play great.
--:-- Danny Green: It's a very unpredictable, and most sports are very unpredictable in terms of who's going to win the outcome, who's going to get hurt, who's not, or how well you're going to play, how well you're going to feel when you're in that, or how the coach is going to play you, or how the team is going to guard you.
--:-- Danny Green: A lot of those things are out of your control. Um, if we go out every night trying to do our best, of course we try to win.
--:-- Danny Green: Nobody tries to perform terrible unless you're betting the unders on yourself and you're trying to win some money which is illegal apparently yes very illegal.
--:-- Sean Rameswaram: You've talked about how the athletes aren't betting themselves and, you know, they don't have money riding on the games.
--:-- Sean Rameswaram: But of course earlier this year we saw former now Toronto Raptors player Jontae Porter got kicked out of the league for betting.
--:-- Sean Rameswaram: Toronto Raptors forward Jonte Porter has been banned from the NBA for life. The NBA says Porter committed several serious violations that include betting on games providing confidential information to bettors, and worse, limiting his own participation in games.
--:-- Sean Rameswaram: It's cardinal sin, you know, that what he's accused of in the NBA and the ultimate extreme option I have is, you know, to ban him from the game.
--:-- Sean Rameswaram: There is nothing more serious. What did you think when you saw what happened to John Day?
--:-- Sean Rameswaram: What did you make of that? I mean, they had to make an example of something so rightfully so.
--:-- Danny Green: I mean, like what do we do? Like, come on, man. Like I said, if you're going to bet on yourself, at least bet the overs and try to make it happen.
--:-- Danny Green: But to bet the unders and then hurt your own career, be sick or get hurt mid-game and call out or purposely not take shots or try to miss shots, that's just something I can't fathom.
--:-- Danny Green: I just don't understand. In the realm of being a basketball player and a competitor, I just can't understand why you would ever set yourself up for failure on both sides.
--:-- Danny Green: Like you're risking getting kicked out and you're risking not getting a contract or being picked up by another NBA team by playing bad and being hurt.
--:-- Sean Rameswaram: Do you think there's any chance instead of getting the periodic reminder that, you know, you're not allowed to do this, so another athlete's getting banned from the league.
--:-- Sean Rameswaram: Do you think there's a chance that gambling, sports betting becomes so pervasive and so detrimental to the game that actually we dial it back and say, you know what, we're not going to allow X kind of betting, we're not going to allow Y kind of betting to preserve the sanctity of the game?
--:-- Danny Green: Cat's out. It's never going back. Too much money involved. It's always everything in business is money, right?
--:-- Danny Green: When money's involved and this is bringing so much money into the world, into the sports and every industry, I honestly think it'll go the other way where they'll start saying we won't allow guys to bet on their respective sports.
--:-- Danny Green: But all right, listen, you can't bet on your own sport. That's the lead. But I'm sure they're going to guys going to be betting on other sports openly at some point.
--:-- Sean Rameswaram: You know, we'll be NBA players bet on football, football, NBA, MLB, hockey, whatever it is.
--:-- Danny Green: But once it's open, once it's hard to go backwards, you know, once you go, you can be strict early and set the rules. But once you lighten up, you can't go back.
--:-- Danny Green: You know what I'm saying? Like, all right, we're going to go back to this. It's like trying to tell NBA players, we're going to insist on the drug rule again, you know, the marijuana drug rule again.
--:-- Danny Green: And I'm like, what the hell? You know, so I just don't see it happening.
--:-- Sean Rameswaram: Anything's possible. Anything's possible! But I just don't see that happening.
--:-- Sean Rameswaram: We asked Charles from earlier in the show the same question. You'll recall he hates sports betting.
--:-- Sean Rameswaram: We told him Danny said the genie's not going back in the bottle, and Charles had a counterargument.
--:-- Charles Fain Lehman: I mean, look, we say that, and my response to that is 1992 is not a million years ago, right? It's not a different universe.
--:-- Charles Fain Lehman: Joe Biden was an important political figure in 1992, and he's an important political figure today.
--:-- Charles Fain Lehman: I will make the argument for the virtues of prohibition. And the argument for it is in essence that prohibition is big and dumb and it works.
--:-- Charles Fain Lehman: When you try to set up a regulatory system, you run into the risk of what's called regulatory capture or in less fancy terms. The entities that are being regulated will have a lot of incentive to spend as much money as possible influencing the regulators.
--:-- Charles Fain Lehman: Prohibition seemed to work pretty well. And it avoided precisely the problems that regulatory capture can bring up.
--:-- Charles Fain Lehman: That said, I think we could certainly do a heck of a lot better than we're doing right now.
--:-- Charles Fain Lehman: You could ban advertising. You could severely restrict the usage of or altogether ban app-based betting.
--:-- Charles Fain Lehman: You could try to limit the ability of sportsbooks to discriminate against that 5% of players who are taking money out because that ends up being obviously unfair.
--:-- Charles Fain Lehman: You could put caps on how much they're allowed to solicit deposits or other targeting methods for sort of bringing in those addicted users.
--:-- Charles Fain Lehman: The thing is that I think all of those would make a difference. And also because I think they'd make a difference, I suspect that the sports gambling corporations will fight them tooth and nail.
--:-- Charles Fain Lehman: Right. And the current political track record is that they will win.
--:-- Sean Rameswaram: There's the sort of strong argument for the prohibitionist position is trying to reach a half measure may actually be harder than just going all the way.
--:-- Charles Fain Lehman: If you can convince people that sports gambling legalization isn't worth it. Whether or not I can convince people, I don't know. But I'm trying.
--:-- Sean Rameswaram: Before that, Danny Green champ. He has a podcast. It's called Inside the Green Room. Get it?
--:-- Sean Rameswaram: This episode was produced by Hadi Mawagdi. It was edited by Matthew Collette. Fact-checked by Laura Bullard. Mixed by Patrick Boyd and Andrea Christensdottir.
--:-- Sean Rameswaram: I'm Sean Ramosverum. This is Today Explained. Merry Christmas to all who celebrate. Happy Hanukkah to all who celebrate. Happy Monday to all who celebrate.
--:-- Sean Rameswaram: Today Explained is back in your feeds on Boxing Day. We'll see you next time.
--:-- Sean Rameswaram: And more.
--:-- Sean Rameswaram: You don't have to be a designer to edit campaigns, resize ads, and translate content. Anyone can in a click. And collaboration tools put feedback right where you need it.
--:-- Sean Rameswaram: See how you can turn your team into a content machine with Adobe Express, the quick and easy app to create on-brand content. Learn more at adobe.com slash express slash business.
--:-- Sean Rameswaram: Dude, did you order the new iPhone 17 Pro? Got it from Verizon, the best 5G network in America.
--:-- Sean Rameswaram: I never looked so good. You look the same. But with this camera, everything looks better. Especially me.
--:-- Sean Rameswaram: You haven't changed your hair in 15 years. Selfies? Check, please.
--:-- Sean Rameswaram: New and existing customers can get the new iPhone 17 Pro. Designed to be the most powerful iPhone ever. With eligible phone trade-in and unlimited ultimate. Any condition guaranteed.
--:-- Sean Rameswaram: Best 5G source, root metrics, data, United States, 1H, 2025. All rights reserved. Trade-in and additional terms apply for all offers. See verizon.com for details.
