The Dark Secrets of Sports Gambling: Why Millions Are LOSING More Than Money

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This week on Forward.

How does capitalism work? It's the alignment of the interests of buyer and seller. You have something I want, I have something you want. We do an exchange. Value is created and that is great when the thing that I want is good for me. It is great when it's bread or it's, you know, the product work or it's a website or whatever. It's not great when the thing is actively destructive. I think you have to be honest about what addiction really looks like, right? Like there are people who are losing their house over sports gambling. There are people whose families are falling apart. There are people who are engaging in domestic violence. There are people who have all of these really substantive problems because they can't stop.

I am very glad to welcome to the podcast fellow at the Manhattan Institute, contributing editor at City Journal, Charles Fain Lehman. Welcome, Charles.

Thanks so much for having me on. I'm thrilled to be here.

Yes. So Charles wrote an article in the Atlantic recently about something that's near and dear to my heart, online sports betting. And I wrote an op ed saying, hey, we might want to reevaluate our approach to this, in part because of your article, Charles. So first, tell people a little bit about yourself. How did you get to be a wonk and someone writing pieces in the Atlantic about policy topics? Sure.

So as you mentioned, my day job, I work for the Manhattan Institute. We're a think tank that focuses sort of broadly on a sense of Right. Think tank that focuses broadly on urban policy issues. My work sort of covers the gamut of, I think about the policy of deviance, crime, disorder, drugs, addictive substances. And that sort of naturally dovetails with policy on gambling. And I'm very interested in what I see as a broader trend of emerging markets in addictive substances, whether it is gambling, whether it is marijuana, whether it is amphetamines, whether it is steroids, whether it is social media. I think I'm glad you threw social media in there.

I can go.

There's really interesting stuff there. Well, I think we have across a number of different domains sort of gone, this seems like a good idea, sort of move towards the marketing of addictive goods. And I think I find those problems intrinsically very interesting. I'm not an across the board, like these are all bad all the time. I think that they are a serious regulatory challenge. And then I'm also sort of a defender of in many cases the virtues of just prohibiting goods. But. So that's how I came to sports gambling. I wear many hats. I'm a wonk, I'm a writer, I'm a data analyst. You can call me whatever you want, but it's very natural. As I started to look at and I think we'll talk today about the research. As I started to look at other people's research and sort of synthesized, I was like, wow, this seems to be going poorly.

This seems to be going poorly is a very good summary. First, I want to out myself as a sports bettor and I want to tell my story as funny. It's going to sound like a confessional, I'm happy to say. As far as I can tell, I don't have a gambling problem. I'm not in a tough spot or anything like that. But check it out. A couple years ago, various apps started marketing themselves saying, Hey, 250 free dollars if you place a $5 bet. And I was like, what? Stop the press. As a math guy who likes money, I was like, I'm good for a $5 bet to get that $250 free dollars. So I downloaded an app and in my infinite wisdom, I decided I was just gonna down because I know a lot of people who downloaded four apps to try and get $1,000 worth of free betting money. I restricted myself to one and then ended up putting some money into that app and have been betting ourselves. I'm going to go in depth in my experience here, but in your case Charles, you started digging into the research that had been done on what happens in states that have legalized. Yeah.

And part of why this is really interesting is that sports gambling legalization has happened really quickly. So back in 1992, way back in the dark ages, the federal government passed a global ban on sports gambling with a couple of exceptions. Atlantic City, a couple of the states are grandfathered in. There's widely supported passes, everyone support in the House and the Senate. The sports leagues are all on board with it because they're worried about the corruption of the sport. Fast forward to 2018 after a lawsuit brought by the state of New Jersey. There's a suit between the ncaa. Yeah, the suit between the NCAA and New Jersey, this law gets overturned on 10th Amendment grounds and all of a sudden states or allowed to set up their own legal gambling, sports gambling regimes.

Question, question. So there are these very, very significant companies now, billion dollar enterprises. Were they somehow party to the 2018 lawsuit or did they come into being after the ruling? They.

So, so what you, what you see is that they started out as fantasy league companies. They knew this was coming down the pipe. So part of the goal was setting up the infrastructure so they could easily pivot to, to participating in sports gambling. The other thing that you see there is there are going to be a limited number of licenses that are handed out to administer sportsbooks. It's not a free for all. If you set up the infrastructure and you know in advance who is in the state legislature to talk to, you can be the one with the license. It ended up being, as I understand, the NCAA and New Jersey kind of ended up on the same page. They both wanted sports gambling to be legalized by the end of it. But the sportsbook companies, FanDuel, DraftKings, whatever, they knew what was coming and they were trying to set themselves up infrastructurally to prepare for that.

Well, it worked out quite well for them.

Yes, yes it did. There's no mom and pop sports book. There are smaller sites, but mostly the market is dominated by a couple of big players.

Okay, so 2018, the Supreme Court rules, hey, states can do what they want. And then how quickly did it become legal?

In various places, quite rapidly. I'd have to think about the timeline. But six years later, which is not a long time, there are now 11 states where it is not legal. So 39 states in the District of Columbia you can bet on. You can bet on sports in some way, shape or form.

I will now interject again my experience, so check it out. I live in New York. It was not legal here until. I don't remember it was not legal here. First, I will say this because this is. Man, I'm gonna be disclosing too much, but let's say I had a strong feeling about a sporting event or a UFC fight or whatever it was. I could not bet on it because I was a New York resident. It wasn't legal here. So you know what I would do? I would call my brother in law in New Jersey and be like, hey, man, can you place a bet on this for me?

There's some story that I read about a guy who would stand in a certain location in his apartment because the cell tower was in Jersey. And so he could bet in Jersey instead of betting in New York. And there's a period of time when that was true. And then New York legalized as well. Again, I don't remember the timing on that.

Yeah, so I would call my brother in law and then I would venmo him the money for the bet. And then thus would it happen. And then, you know, if it won, he venmo be back. If he didn't, then the money's gone. And then it became legal in New York. I didn't have to bug him anymore. And then I saw the promo, I downloaded the app, I put the money in and I. I use it. I totally think it needs to be regulated more rigorously than it is in part. And I want to break down a whole bunch of things because between the two of us, I'm the user and you are not. It's so it totally changes the viewing experience of sports and not in a good way like it used to be. I would turn on a game, let's say an NBA game, and I would care about which team wanted to care about certain players. Now everything is just filtered through, like, what are my bets?

What are the odds?

So it changes your viewing experience now for the better. It is a massive bandwidth and time suck. Because one of the things that happens is you start imagining that watching sports is a job because if you can profit from it, you're like, ooh. And so one of the things I wrote in my Newsweek op ed was that this is like the perfect storm for men because it combines all the things we love sports, risk thinking we know better than other people, that we somehow have an edge, speed, because it's very, very much real timey, social, because you can brag to your friends about that one time. And so it's like this massive compounded mix of all these Things that men love, you end up just expending a lot of energy. The third thing is that it's really messed with my mood a bunch where, like, if something didn't go my way, it would screw up my evening. And in a way that made me feel very, very lousy and self conscious as husband and father. Where, like, my kids are around and I'm, like, pissed off about losing, you know, frankly, not like a substantial amount of money. In my case, I might have lost like a hundred bucks or whatever in the scheme of things. Totally immaterial. And yet, because there's something about getting something wrong and losing money on it that sticks in your craw, even if the money is not that big a deal.

Yeah, no, I mean, well, it's a reinforcing experience. That's part of how gambling in general and sports gambling in particular works and part of why it should at least be of some regulatory concern, if not prohibited outright. The example I like to give is thinking about slot machines and slot machines. Slot machines are completely irrational from the outside. Right. Have you done slots?

I'm happy to say I do not do slots because the odds are too lousy. I think if I'm going to gamble, I should go to a blackjack table or a crops table.

But slots make no sense, right?

My God, do I sound like a degenerate? Do I sound like a degenerate? Insert Asian joke here. Anyway.

No, but. So, like, slots make no sense from the outside because they're just designed to take your money and they can actually be optimized to take your money. But slot machine designers design exactly the pattern of wins and losses so that your brain keeps you hooked. Yeah, it keeps you hooked. You get the win. Just when you think you're going to quit and so you come back over and over and over again. And this is very straightforward Pavlov's dog reinforcement that you can do to human beings. And you could do this algorithmically as well. That $250 for $5, they put that out there because they know that you will do that and be like, oh, yeah, five bucks, 250 bucks. Sure, that seems like a great idea. Well, I mean, already. And they're able to model that quite efficiently. They're also able to model who is spending more versus who is spending less. A rule of thumb in any market in addictive goods, cigarettes, alcohol, marijuana, heroin, methamphetamine, you pick it is 10 to 20% of your users do 80 to 90% of your using. And do you think that's true here, too. Yes. There's. There's decent empirics that says that's true. That's the same power law, distribution.

I'm happy to say. I'm not that.

Yeah, I mean, you know, there are people who are spending all of their money on sports gambling.

Well, by the way. So a couple of anecdotes. One is that I met an Uber driver who, it seemed like they were just spending all of their earnings on sports betting.

Yeah. I was at a wedding and a friend was telling me about a friend of his from back home who works at the post office and does not make a lot of money. And the guy has $28,000 in the whole gambling.

Yeah. Oh, no.

It is trivial for these companies to algorithmically identify people who look like that and say, oh, we're going to give you. If you're checking your phone in the middle of the night, if you're looking at the app in the middle of the night, that's an indicator that you are gambling compulsively, in which they will send you more prompts. They will offer you a deal. They'll say, like, do you want to take this parlay? Because you're a good target and it's, you know, better than I do algorithmically trivial to do this. Right. This is not. This is a very simple machine.

It's just math.

It's a very simple optimization problem. And the obverse is true, too. If you are somebody who's good at sports gambling, they won't take your money. After a while, you'll get kicked off the sportsbook or you'll get limited at a very low cap. We were talking before about Nate Silver, the election analyst slash gambler. And Silver was on the sports bricks for a while, but he gets kicked off of all of them because he knows how to do math and knows how to get an edge. And they identify. It's very easy to identify that. So they will reward the big losers and try to encourage them to lose more and more and they'll kick out anybody who maybe is going to eat into their profit.

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Whole thing, pretty good.

Which means I'm incredibly negative because if you think about all the stupid time cost. Time cost. So a couple of things I want to mention before we get into the research, which is very staggering and clear. This stuff is now so unavoidable where if you turn on SportsCenter, the anchors will literally have a segment on like, what's a good bet to make? And then they have their own sportsbook. I believe ESPN bet now. And that stuff has really blown my mind because there was a period when the leagues themselves would be completely trying to steer clear of this stuff. There's a long time, for example, the NBA said they would never consider a Vegas franchise because they didn't want to have any gambling. And Now I think FanDuel might sponsor a lot of the NBA programming. And so the melding of gambling and sports media has been a sight to behold.

I mean, this is exactly. If you go back to PASPA, the 1992 law, and you read the testimony, they had guys from every major sports league, the NBA, the NHL, the mlb, every sports league testifying in favor of this bill because they were like, we think that this will be damaging to the sport. In many senses, they were right. The dynamic you're describing is exactly what they were worried about. It is a little weird. Like espn, you are describing Mickey Mouse engaging in gambling, right? ESPN is a Disney property. So that's what's happening there. The Mouse is writing a sports book now.

So I am a big NBA fan. You may not know this, Charles, you probably do know it because you, you dug into all this. But there's this marginal NBA player named John Tay Porter who's been banned for life because he was betting on himself having a bad game. And he was a marginal player. He's like, you know, barely got any playing time, and he bet some amount. Let's call it $15,000 on himself having a really bad game, which itself is a totally bizarre bet to make because, like, who would bet that much on a scrub, like, not doing well. And so then he came in the game and said, I don't feel so good. And then it came off. And then they. They caught him, and then he's banned for life. His brother, by the way, Michael Porter Jr. Is a very significant NBA player. Just, you know, not quite all star, but right there it was like, you know, on the championship team last season, a season before, you know what I mean, before the Celtics won the Nuggets.

We were this close to this happening with Shohei Ohtani. And the translator was blamed for it. Probably he did it. But this is not a new phenomenon. Think about. I think it's the 1912 White Sox when they throw the World Series, the Black Sox, in order for the mob.

The odds of them being able to completely insulate themselves from these behavior is very, very difficult. You're talking about each athlete from the start of the scrub, but then everyone in their circle, you know, literally it'd be like, hey, hey, what's that? Like you're. You're limping, like, oh, shit. And they're like, you know, it's like inside information. Like, you know, right. Jimmy Butler has a hurt ankle or whatever the hell it is. So it's very hard. I think they did the right thing back in 92, being like, yo, we got to steer clear of this. And then, you know, 26 years pass and it's like, oh, I guess we're doing this. And the fact that industry is embraced it to this degree makes it really, really hard to avoid or ignore where if you're a casual sports fan, you turn on. You're like, what's going on here? And you're like, oh. And then literally the anchors are comparing notes on various betting opportunities. Also, in some cases, your friends are betting. So where has this led? And this is Charles. So you started digging into the research. Who has done this research and what did you find?

Yeah, there were a couple of really three papers that I talk about in the piece and another one that I didn't talk about. It's also a good paper space and also it's a slightly different method. So I'll start this by saying there's a large body of research on the effects of gambling and sports gambling in.

Particular, part because this is like a fine natural experiment because literally a state gets turned on.

So there's stuff prior to that, because the UK has experience with this, we are able to model based on other countries. That stuff goes in the same direction, but is less informative to get to the point about natural experiments. Because states roll out gambling legalization at different times. Because New Jersey went for New York, you can exploit, exploit that variation. You can take advantage of different states had it or didn't at different times. This is for the nerds out there. This is a difference in difference. Estimate to estimate not just what are the correlates of it, but what is for econometric purposes, the causal effect of sports gamingalization on a variety of outcomes. And so the research that I look at in the piece that you're referring to uses two different sets of data on consumers. And they say consumers in states before and after financial information consumers in states before and after gambling legalization, controlling for a bunch of other factors, including controlling for using the other states as control groups. Essentially what is the effect on their financial well being? The outlook is not great. Legalization does lead to an increase in dollars spent on gambling, something like 14%, 15%. It also yields alarming changes in people's investment propensity. One estimate is that for each additional dollar spent on gambling, there's $2 of foregone investment income. That is money transferred into an investment account. That's like $1 on gambling and then another dollar that you spend on consumption because you're watching the game or whatever. There are also big increases in your risk of bankruptcy. It's 25 to 30% against a low baseline, but still. And other measures of reductions in the quality of credit. People become much more financially precarious. But then the other thing that shows up is that these effects are concentrated among households that already have financial problems or already have poor credit, or already have a history of overdraft or particularly male led households, young male led households, particularly in poor counties. So we're talking about young men, dubious credit, often sort of on the financial margins already who are getting sucked into this stuff.

Yeah, the $1 in the gambling app equals $2 less in investment accounts. I think is a huge stat. And you can completely understand why it happens. Because check it out, let's say I'm a guy, I've got some money, a little bit, $500, whatever. I want to make money. And my choices are either gamble it, I can make money quite quickly, could also lose it, or I stick it in an investment account and then watch it grow over time by 6% or whatever the number is. And what's happening is that it's like, oh shit, if I Want to see my balance grow? Let's do the quick process. And I can tell myself a story about it growing very quickly instead of doing the slow grow. By the way, crypto probably is somewhere in this particular drama, but I can very, very clearly see that not only is the psychic energy getting diverted to gambling, but then your resources get diverted to gambling, and this is only a few years into this.

And you see by the way, that the effects grow over time. So states that go earlier, if you have more data on states that go earlier and the effects are worse in those states relative to states that have gone later, I believe it's going to.

Start compounding the way you described it. I talked to a friend who fessed up to me and this is literally last week because I had posted on X in your article. And then he came to me and said, hey, I have a problem. I was like, what? Like it was something that, you know, you wouldn't expect. And I really appreciated the disclosure, you know, and then he asked for some help. But part of it was that his, his wife did not know the magnitude. His wife knew that there was like, you know, it's like, hey, getting a little too into the apps, but then not, not, you know, the degree or severity. And this person has a lovely, wonderful family, but was very, very self conscious about what might happen to his relationship if the wife discovers that he loaded up on debt. You know, there's a lot of gambling debt, so there's a lot of shame baked in, I think, for men. So men have like a strange relationship with money and risk where it's definitionally important to us to feel like we're on the positive side of that ledger. And when we get into the negative side, it is a real source of isolation.

Yeah, I mean, I think the thing that you said a minute ago rings very true, which is that particularly young men, and today's young men are much more likely to be unattached than they were 30, 40, 50 years ago. They marry later and they marry less. They're less paired off, et cetera. I think that they have a sense, particularly men, lower socioeconomic status, have a sense that they need to hustle. They can't just sit there and let wealth build up over time and invest because that's not going to get them where they need to go fast enough. And so when you talk about something like sports, gambling, I watch sports, I know about sports. Maybe I can make some money off of this. Except like, it's a good job. Except unfortunately, the sportsbooks are smarter than you, they're run by people who are smarter than you, and also they're run by computers that are way smarter than you. And so mostly you end up losing if you're in that category.

Well, it's not only that, but it's not like you get pure odds. There's a spread. And so definitionally, you're going to be sacrificing something. You don't get a 5050 bet for a 5050 occurrence. You get a 45.

Intuitively, if that weren't true, they wouldn't offer the market. Their goal is to make a profit over the long term. You know, why does the house always win? Because the law of large numbers is on the house's side. And, like, they can lose a certain amount of the time, but they will end up winning 55, 56% of the time or whatever. And that will be good for them, but they will always, given the opportunity, tilt things in their direction, which is why you get things like they identify the whales, the guys who are betting a lot of money, often money they don't have, and reinforcing them. Because you have that reinforcing mechanism. Right. Like, you know, it starts with, maybe there's something fun I can do. And for a lot of people, it stays that way. Right. Like, gambling is not equally addicted like any other addictive substance. Gambling is not equally addictive for everybody.

Is there a genetic predisposition?

Like everything. There's probably a genetic component. What is. What is the source of that? Unclear. You know, like. Like it's not like there's a gambling gene, but like, probably, you know, you could, like, do apologetic risk score, and there will be some fraction of it, I don't know what the fraction is.

Fascinating. Yeah, I mean, instinctively, I guess there probably is, as you say. Okay, so study number one is you invest less and your financial fortunes decline pretty bad, and yet it may get worse. Study number two.

Yes, well, so study number two is, are you talking about the one that says your risk of bankruptcy goes up or are you talking to the other one?

Well, I guess I was shooting straight to partner violence.

Yeah. Right. So that's the other thing. So there's a prior finding that says on days when NFL team, when the home team in the NFL loses, intimate partner violence goes up. Terrible. Yeah, right. Which, you know, you can talk about why that is.

And I think just most anyone common sense knows why that is.

Yeah, right.

Yeah. It's like if your team loses, you're surly, you're in a bad mood, da, da, da.

And if you're already predisposed to engaging in intimate violence, it's a trigger. So it turns out you can redo that effect, controlling for presence or absence of sports gambling, and the effect gets even larger in magnitude. I think it's something like a 10% increase.

And by the way, that also makes perfect sense because any negative effect on your mood would be much, much higher and compounded if you just lost money that maybe you needed for a rent.

Right, right. This gets to the point. It's not just that sports gambling harms people who are engaged in it. And in some senses, that's always a misleading idea because people aren't isolated. But it's not just that a guy is losing money. It's that in some cases, his loss of money is leading him to do harm to his partner, which is, you know, that's ultimately his fault. He should be punished for it. But we should be worried about the social externalities from a regulatory perspective.

Yeah, it could be partner, could be a child.

Exactly.

And that's something painful to admit, you know, because. Well, one of the reasons why I was eager to sit with you is that in your piece in the Atlantic, you say, hey, guys, pretty clear that we should rethink the regulatory approach to this, which I totally agree with, you know, obviously, but Manhattan Institute has a reputation of being somewhat center, right, kind of, you know, you might.

It's like.

Which, by the way, I mean, you know, like, I think that there are clear occasions for regulation of behaviors. Like this certainly seems to be one where you had something that was illegal and life was a certain way, and then you make it legal, and all of a sudden you have people going bankrupt, relationships falling apart, and various negative impacts. And so I liked it because I was like, oh, Charles is from a place that isn't exactly like, hey, let's regulate stuff. And then it came out and being like, we should probably be regulating this. Yeah.

I mean, and I'll say there's a diversity. There are think tanks that speak with one voice. We do not. I mean, we have a coherent philosophy and people are all on board with that, but there's a diversity of opinion. I have argued with Kotlin good naturedly, but argued with colleagues about this exact topic because they disagree with me. That's good. I also have colleagues who strongly agree with me. The way that I come at it is from a right leaning perspective. I think that the right has always been more willing to countenance the control of vice. Thank you. In many ways, left has. I think there's a way to sort of talk about that in a nonpartisan language. The way that I would talk about that in a sort of nonpartisan language is.

Oh, actually, let me stop you there for a second.

Sure.

Because I'm really interested in this to the extent that there is any political viewpoint on this topic. Because as an example, if I'm like a liberal Dem or whatnot, I would think, hey, you should probably be regulating this because families are falling apart, et cetera, et cetera. And yet I don't really see this as something that I've seen any messaging about. And this is what it reminds me of. And this is going to be out of left field for some of you, but others of you just nod your heads. There was a long period of time where I was like, what is going on with the exploitation of pro wrestlers and UFC fighters where, you know, they weren't unionized, they were getting abused, A lot of them were dying young in the case of pro wrestlers. And, like, it was just totally off the radar for Democrats because it affected a group of people that, you know, that they just didn't seem to think were, you know, like, like a class worth worrying about in that case, you know, pro wrestlers. And so watching a lot of my childhood heroes die prematurely, I was like, hey, guys, like, there's something, you know, amiss here. And I feel like that's happening here where the group of people, because it tends to be young men, folks on the left are like, yeah, it's not my problem. Which I find bizarre.

Well, I think I just wrote a piece about this, actually, in the Times. I think there was this really interesting thing in the last election where young men suddenly became a swing constituency and young men across races. So, like, Kamala Harris did much worse with Latino and black young men than many prior Democrats have. And so they were very concerned about that. And then young men are low propensity.

I'm sure if you dug in Asians too, FYI.

Yeah. And so that's like, they did not expect that to be true. And so I think both sides saw young men as a swing category. Part of how they dealt with this is that they leaned in to vice messaging generally. So, like, Donald Trump is the most pro marijuana Republican ever elected, certainly in the last hundred years. But Kamala Harris placed ads on sports betting websites. She failed to go on Joe Rogan. But like, Joe Rogan is kind of an avatar of these people, introduced negotiations to go on Joe Rogan. If you look at Kamala Harris's opportunity agenda for black men. Two of the five items in it were help black men get jobs in the illegal marijuana industry and help protect black men's cryptocurrency assets. So I think that there was a sense, at least in the Harris campaign that this demographic is more up for grabs than they have been historically. And the way to appeal to them is through these vice goods.

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Well, this is one of the things that it's interesting for me, so check it out. I'm a guy, like something of a public figure. I think that we should be regulating online sports betting very differently and much more rigorously than we are. I think if you were a state, let's call it California or Texas, that has not yet made this legal, you should not make it legal because all you have to do is look at the data and say after you introduce it to your populace, things are going to go downhill for a significant number of people. And I will also share, check it out. I spend some time in California and then I can't bet. And then my life got better because all of a sudden now I'm clearly not as much of an addict, right? There's probably some crazy work around. I could have used vpn, I could have harassed my brother in law again or you know, whatever. But instead I was like, yeah, I can't do it here. And so I just forgot about it for that period. And then I come back to New York and then, by the way, then I'm back doing it. But so I'm someone who thinks that we should be regulating this much more rigorously just based on the facts and common sense. But by saying, and saying this, I feel like I'm somehow a buzz kill or like the, you know, I'm a professional buzzkill.

So this does not bother me.

Good. You. I don't consider myself buzzkill. I'm like, I consider myself fairly fun even. But on this one I'm looking at it and Also, I want to say this too, and share my own experiences because it's like, look, I'm not some curmudgeonly stick in the mud where I don't get the appeal of these things. It's actually, I do get the appeal of these things. The appeal is very, very strong and powerful to the point it's completely going to ruin some people's lives.

Right. I think you have to be honest about what addiction really looks like. Right? Like there are people who are losing their house over sports gambling. There are people whose families are falling apart. There are people who are engaging in domestic violence. There are people who have all of these really substantive problems because they can't stop. This is the thing I was going to say earlier. When you talk about addiction and gambling is addictive, it's sort of the behavior. It's an obvious example of addictive behavior. What's addiction? Nobody can agree on this. The functional definition of addictions in the DSM that I like is that addiction is characterized by continued use in spite of harmful yourself or others. It's when you keep doing it, you can't stop doing it and you're hurting yourself or others, but you can't stop in spite of that harm. And the argument that I make is like the thing that is actually concerning is not so much like the ethics of gambling. I don't think it's wrong for you to gamble. I also don't think it's wrong for people to drink. I don't think it's wrong people to smoke. I don't think it's wrong intrinsically for people to do heroin. It's not an evil act to do that.

The thing that is dangerous, it's certainly a destructive.

I would describe it as an irresponsible act. That's different from. I try to avoid the moralizing. I don't say, I think you're a bad person because you do this. I think you are hurting yourself and others.

I'm with you there. I certainly don't cast some kind of.

Moral character, but I think from the policy perspective, the thing that matters is this thing you were saying earlier. How does capitalism work? It's the alignment of the interests of buyer and seller. You have something I want, I have something you want. We do an exchange value is created. And that is great when the thing that I want is good for me. It is great when it's bread or it's the product of work or it's a website or whatever. It's not great when the thing is actively Destructive because in that case the profit motive will align the interests of buyer and seller really efficiently and the buyer will be economically incentivized to ruin his life. This is exactly what you see with sportsbooks, although it's what you see across a variety of addictive industries. To get back to the question about why am I as a right leaning guy saying how can I justify this? In part it's because I think capitalism is cool and great that I'm willing to say in this particular case, I see a very real threat to human well being, human flourishing.

Amen.

Yeah. That you need to do something about.

Yes. So here you have, hey, ex lives destroyed, ex relationships destroyed. And the other side, you only have a big bag of money.

It's actually not that big of a bag of money. The corporations make decent money off of this. By the way, we haven't talked about. Sports gambling is not actually their end game. They don't really care. Sports gambling is a small market. The goal is Igaming. The goal is casinos on your phone, which they already. Michigan, Pennsylvania, a couple of other states. It's already there. That's a way bigger market. The goal of the sports gambling thing was just to get the wedge in.

I find that surprising.

It's coming so they make some money. But the argument that is deployed for legalization that has been very effective is you're missing out on tax revenue totally. And the reality is it's money, it's order.

It's not enough money to.

It's not enough money to offset the social costs. It's hundreds of millions of dollars, which is not that much relative to the budgets of these states. Somebody told me I have high numbers. 1% of Indiana's budget. It is relative to other sin taxes, taxes generated by alcohol, cigarettes and marijuana. It's much smaller than the revenue generated by them on a quarterly basis. It's just not a big figure.

Which doesn't mean, by the way, this is hella dumb. I'm going to say is like, hey, I'm going to get a smidgen more tax revenue and oh look, I just spiked the need for government services.

Exactly.

To a much higher order of magnitude than whatever money you might have given me. And by the way, this money you gave me, who the heck knows if I'm going to actually deploy it to help the newly harmed? I mean, the odds of that are frankly very, very low.

Right. So you have greater strain on your social system, greater strain on government services, and there's some tax kickbacks. And oh, by the way, if you try to jack up the taxes, the businesses will pick a fight with you because they have a lot of leverage. And this gets to the conversation of regulation in the end of the Atlantic, I go, actually, I kind of think prohibition was fine, which is a controversial position.

No, no, I mean clearly man. I mean life was fine in 2017.

We did not live in a hellscape in 2017. It was okay. You could in fact. Well, what I like to say about paspa, I really like paspa, the federal law, because it doesn't criminalize individual behavior. If you wanted to make a bet with your friends that was legal, you could do that. Like you could hang out at the bar and like bet 20 bucks on the game.

Nice.

What isn't legal is for a state or business to create an enterprise that facilitates gambling. That's the thing that's prohibited. And I think that that's, you know, a much fairer system of prohibition than like hunting you down for making 20 bucks.

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What have other countries done in this space? You mentioned the uk. You mentioned various findings. I feel like some other countries have their acts together to a higher degree. So let's say they found themselves in a version of this situation. Like what happened?

Yeah, mostly it's been a huge disaster. So I don't know a huge amount of the. I can't give you a huge amount of information with the international context. Mostly focus on America. Canada is moving forward with this and they're seeing similar problems. Australia. I actually talked to some guys on Australian Public Broadcasting Corporation. They had me call in at 7 in the morning their time to talk about this because they were having huge problems in Australia. The UK is the first. I forget when they legalize, they're several decades on. Something like 8% of suicides in the UK are associated with Gambling? Yep.

No, I actually believe that. And guys, one reason why I'm passionate about this, this is that I can feel very viscerally that a lot of these victims are going to be young men on the edge, young men on the precipice. And that's a group that I think gets short shrift in a lot of our policy and cultural discussions. But I'm crushed by the fact that so many of them are going to have their lives upended by this. I'm angry that there are so many institutions that are now totally in on it. You know, that stuff really pisses me off.

And I'll add, I think you've been very good on this for years. We were talking beforehand about when you were running for president. You talked about the challenges to young men. I think you're completely correct then. I think you're completely correct now, which is that women have their own sets of problems. Absolutely. But in many ways the sort of set of social pathologies that affects young American men today is dramatically underattended relative to its severity. And you talk about gambling, we talk about lots of other addictive substances. There are guys who are being sucked into these enterprises who are ruining their lives. Everybody knows somebody like this, right? Everybody knows somebody who knows somebody. And it's only going to get bigger. This is what I mean. We're talking about gambling and we don't have to talk about pot too much. But this is what I say in the context of marijuana. It's like since marijuana is legalized, everybody knows somebody with a marijuana problem. Everybody kind of knows what that looks like. And honestly, it's like a guy in his, his early 20s, maybe his late 20s, he's a wake and baked stoner. And is he dying from it? No. Is it affecting his life? Yeah. So it fits into that sort of broader nexus of men are always riskier than women. Men are at the tails of the distribution. And so it makes sense that they are the ones who are disproportionately falling victim to this stuff. I think it's two thirds of sports gamblers are men, but I'd have to check that number.

72%.

Yeah. Okay. Closer to three quarters. So like, you know, men are disproportionately odds at risk for this kind of thing in general.

I'm sure there are a much higher proportion of the extreme.

I'm sure, yeah. And so like, you know, I think it's very easy to see this trap across a variety of products that just like, we don't know how to talk about it.

It's hard enough to be a young man in America without making every freaking smartphone into a betting haven and every sporting event into a casino as well. Yeah, I'm very, very saddened by this. I'm glad that you're a voice of reason and perspective and also coming from a direction that again though, you know, in this one I feel like this should be a nonpartisan, bipartisan cause, you.

Know, here's the interesting thing that I'll say is that the response to that article was a remarkably positive. Almost everybody was like, yes, I think this is a problem. You know, there were some really radical libertarians who hate me, who were like, this is your. You hate fun. But other than that, everyone was like, yes, I agree, this problem, but really the bipartisan nature of this, I thought it was super funny. On the one hand you tweeted about it and then on the other hand some Fox News host, I forget who, was tweeting about how finally the Democrats at the Atlantic are admitting this is an issue. And I was like, okay, we've got the spectrum here, or you're talking to federal leaders. There's one federal bill, regulatory bill, which is Blumenthal in the Senate and Paul Tonko in the House, who are Democrats. I don't know if it's gonna go anywhere but like, you know, that's, there's, there's some voice for it there on the left as well. So I do think it has the potential to be a bipartisan issue.

Well, I hope so. And to the extent that the incoming administration kind of represents these constituents, like, I hope that they pick this up.

You know, I think that's a really interesting question because I've argued that this goes back to the point about the Harris and the Trump campaigns. In many senses they competed on the opposite on being softer, on Vice Industries. And that is alarming to me.

That's an unfortunate competition. But the argument I would make, and this is to, let's say, for example, a J.D. vance type figure, is that if you're pro family, you want to regulate this stuff because this stuff is going to be corrosive to many.

I think there's a really interesting coalition on this stuff where on the one hand JD Vance, I think gets this based on what he's doing in the Senate. I have a feeling that there'd be.

Like some 40 something year old male legislator is like, yeah, I actually get this problem because you know that J.D.

Vance knows guys from back home, right? Think about the guys in Hillbilly. They were all Betting on sports. On the other hand, for a while it was looking like Matt Gaetz, who was a big booster of the NCAA decision, thought it was a good thing, thinks sports gamma legalization is a good thing. Was going to be the Attorney General of the United States. That turned out not to happen, but for other reasons. So like, you know, I think there was gonna be really.

And by the way, I do think that there are a lot, it should be a lot of people who are for this who now be like, okay, the data's out. Yeah, yeah, not so good.

I would, I would.

Yeah.

You know, I think that's the. And the useful thing is that, you know, we knew this beforehand. Again, there is evidence in the uk, but a lot of that is not of the quality of the evidence that you can get in the United States.

It's freaking direct, man. It's in your face. And we know the people and it matches up with common sense. I mean, this seems like very fairly compelling and clear to me. So Charles, thank you for helping lead on this issue and many others. I mean, he's obviously deep into regulation of various addictive substances and other topics. If people want to keep up with you, your work, your perspective, how can they best do so?

Yeah, so obviously always at the Manhattan Institute, which is Manhattan Institute, that's really our, our domain. I'm on Twitter, I'm charlesfleeman. And then I'm also on Substack, which is I'm at the Causal Fallacy. C A U S A L F A L L A C Y. It's a terrible substack name because nobody can ever remember it, but I read about it.

It's smart to remember it. So he only has smart subscribers.

But I actually write about these issues all the time there and in City Journal, our in house publication at MI and all over the place. So there's all good places to find me.

Well, keep it up for this Atlantic article. Did you submit to them? Did they come to you? How'd that work?

I submitted them. I have, I have, you know, some guys that I know over there.

Well, I'm so glad they picked it up and thank you for coming and sharing the fact.

Thank you so much for having me. This is great.

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