00:00:15
Speaker 1: Pushkin. Welcome back to Risky Business, a show about making better decisions. I'm Maria Kanikova and I'm Nate Silver. So today on the show, Nate, we'll be talking about kind of core risky business topic, which is, you know, poker, sports, betting, gambling, all of these things. We'll be talking about the two indictments that came out a last week on Thursday, the twenty third, that involve NBA players other personalities who allegedly took part in some unsavory cheating behaviors.

00:00:58
Speaker 2: It's a little bit like two federal indictments, five mafia families, eight co conspirators, and a partridge. It's sorry, it's almost Please.

00:01:07
Speaker 1: Please continue, Nate, can you have you have some very Christmas y lights behind you? Because you are not in New York.

00:01:15
Speaker 2: I am in FBI. No, I'm just kidding. I am in Ciudad de Mexico. I'm in Mexico City. I'm not supposed to be in Mexico City right now. I am supposed to have flown down tonight. But you know, there was some at least good risky business airline strategy employed last night, which is why I'm getting out today and instead of staying even longer, and didn't bring my microphone. Right, That's why I had my phone dangling from my headphones and at the El Camino Reale hotel near Terminal ones of whatever it's called Benito a Quires Airport. Although I did make a good decision yesterday Maria talked about like decisions under pressure. So get in the flight, you know, little s flow on the tarmac after about Actually, I don't think we've even pushed off the tarmac, right, And the pilot is like, well, we're just taking care of some just paperwork right here, right, And I feel like I'm already being like gas lit a little bit, like you said, another forty minutes or so on, okay for work. And then he comes back on. And by the way, I can tell me.

00:02:12
Speaker 1: Forty minutes on the paperwork night, that's never I mean, taking care of some paperwork is not forty minutes.

00:02:18
Speaker 2: I'm an experienced flyer. I can tell within microseconds by the tone of the pilot's voice just how bad the news is. Right, So it's like another delay for like, so we're now like an hour and thirty forty minutes without having pushed back from the gate and now there's some clarity. That's an engine problem with an undetermined time of resolution. Right, I start using what little Wi Fi I have to ask, not that you can congress with your own comment sense of up being a prequent flyer, right, but like I asked chat GPT and Claude like, what are the chances that we're really going to get off on this flight tonight?

00:02:53
Speaker 1: Right?

00:02:54
Speaker 2: And Claude's like, Yo, they're gaslighting you bro.

00:03:00
Speaker 1: Claude tells it like it is, they're gaslighting you bro.

00:03:03
Speaker 2: You enough to know what are you talking about? Thirty percent chance? Right? And then we deplane and then Claude's like, immediately, no, readbook your ticket and so and so we did, and so we got I think one of the relatively few seats available on the same flight today, probably gonna be a middle seat. Not gonna lie Maria, Probably gonna be middle seed. But like I'd rather in Houston or something. But the important thing is you have to act quickly, yes, in these air trabal decision might mears. After my partner and I checked in, we went back up to the lobby to go get a uber to dinner, and like there's a line an hour and a half long. Everybody asked from our flight, who did not behave so proactively? Who will gaslet by like Delta, but Delta Airlines, you know you owe me one, you only one. You owe me a free flight somewhere probably, so act decisively. Sometimes equilibrium of like oh, let's kind of wait and see is like actually quite quite a bad equilibrium.

00:03:56
Speaker 1: Yes, absolutely, that's really good advice. I'm gonna echo that act quickly, and when it seems like it's going wrong, it'll probably go wrong. But now let's uh, let's turn to uh the hot topic of the day, which is so in the risky business domain, it's not even funny core risky business. Nate, has anything been happening with the NBA and sports bedding and poker? I don't think there's anything in the news, do you.

00:04:24
Speaker 2: It's been an exciting start to the NBA season. Victor Womanyana it looks like it, and Women Yama looks like an MVP already. Steph Curry has already had big comebacks. I'm a big NBA fan. But which day was it? It was Thursday? I think early Morre? Yeah, is that right? Yep?

00:04:40
Speaker 1: So it was Thursday. The twenty third of October.

00:04:46
Speaker 2: So there are two funeral indictments which at first might appear unrelated but actually have a lot of co conspirators, as they are called. And remember, the things we're gonna be discussing here are allegations. Marie and I are not lawyers. We have right right as journalists and citizens to engage in beaesy and priors about how likely some of these things are. But they are accusations, allegations. They are not approven yet they are disputed by their clients lawyers in at least some cases. But two big federal indictments, one of which concerns cheating essentially at sports betting. There are a couple of different forms of this. So one form involves one particular NBA player named Terriett Rogier, who is kind of a fortieth percentile mediocre NBA player but has still made over one hundred million dollars in his career, allegedly removing himself from games early to help his co conspirators win prop bets. Now, look, our audience probably will know more about prop bets than the average bear. But if you're not familiar, if you think about sports betting, you might think about. Okay, I can vote bet on quite spreads. I could been on money lines, which is just the percent the odds, the percentage chance that the team wins, or totals or over unders as they're sometimes called, right, and you can bet on the future, as has he won the Super Bowl, that kind of thing. However, recently, you can also bet on how individual players will do, and it almost doesn't seem to matter how obscure the player is. So Terry Rozier is a mediocre player. Jontay Porter is a player who is less than mediocre and was suspended for life by the NBA last year for a I guess proven to the NBA satisfaction allegation of a similar scheme. Right, you're like, hey, look, I bet the under bros on this. I'm going to ask out of the game after the first quarter, right, cite some injury, and then you'll cash in big on your underbets. Right, It's like allegation one A. Allegation one B concerns inside information leaking to the gamblers about the availability of key NBA players. So a person named co Conspirator eight, who is almost certainly because the clues are not very subtle. Currently suspended Portland Trailblazers coach Chauncy Billups, a former member of the Detroit Pistons other teams who has now been suspended by the league, but a Hall of Fame player who allegedly tip off his gambling buddies about when key personal that we're going to participate. Damian Jones is a Los Angeles Lakers former player. Actually, Damian Jones is like a confidant of Lebron James. Lebron James is not accused of anything whatsoever, but like he was a friend who had access to like is Lebron practicing house he feeling Knowing whether Lebron James will play in a game obviously very important if you're trying to bet on the Lakers or against the Lakers for that matter. Right, and there are several allegations of inside information leaking before it became publicly known according to the NBA's officially very diligent injury reporting protocols. Right and by the way, this most has happened in the twenty twenty two twenty three NBA season, which is a year where I bet the regular season every day. It was kind of an experiment side hustle for the book to see what the ins and outs like really were for a professional gambler, and so some of the stuff looked fishy in real time. The second indictment is.

00:08:06
Speaker 1: For the creation Royal Flush operation.

00:08:09
Speaker 2: Can you try a little harder?

00:08:11
Speaker 1: Right?

00:08:15
Speaker 2: Can you try? Like, I don't know Operation Flows or I don't know.

00:08:21
Speaker 1: Operation Royal Flush Night. Yeah, this one is poker related about cheating in games from La Vegas, New York, even the Hamptons. I realized that's also New York, but games all over the country. And there's one person who's in both indictments, we assume because as you said, person of interest to you know, eight in indictment number one is probably Chauncey Billips. Chauncey Bilps is named in indictment number two. And these were illegal underground games where lots of famous faces they're known as the face cards in the indictment night. A lot of famous players and you know, famous personalities were in games. Some of them were apparently involved in this, allegedly involved in this. The games were correct, good, there were crooked car shufflers, there were X ray tables, there were sunglasses and contact onses and basically I don't even understand like it's like layer upon layer upon layer. If the technology of cheating exists, it seems like they used it at one point or another in these games. And the most striking thing Nate about all of these things is, it's the first time I've seen, you know, the famous New York crime families working together. You know, it's the five families, is what you traditionally think of. In this particular case, four of them are in the indictment, But in my mind, it's the five families uniting for a worthy cost, which is, there are so many suckers here, let's see how we can fleece them, because allegedly they were all involved in these games, in backing them and helping them take place, and in helping to collect outstanding debt when people lost over seven million dollars. I mean that's for poker. Like I understand that for a basketball player who makes hundreds of millions, million might not seem like a lot, but for a poker game, you know, seven point one million dollars, that's a lot of money.

00:10:15
Speaker 2: What I've never done is play in an underground game as opposed to a home game. To me, the big distinction is not as complicate as people are making it out to be. Is are they taking a rake exactly or a profit? Right?

00:10:30
Speaker 1: If they are, And by the way, let's just caveat this for one second, people who are our poker listeners. Rake means that out of every pot played. So say Nate and I are in a hand together. Nate, that's ten dollars, and I call the ten dollars. So there's twenty dollars in the middle, and the house will take, depending on the rake, let's say a dollar out of it or two dollars out of it, you know, whatever it is, and that will go towards the house. That's the rake. You take a cut out of every pot that's in the middle, just automatically, as like a fee, a courtesy fee for running the game. And that is not legal. So, even though home games are legal almost everywhere, if you don't take rake, as soon as you rake them, it becomes completely illegal.

00:11:13
Speaker 2: Yeah, and we should clarify a couple of things here, right. You know, all of the home games I play and include some collection for booze catering if you bring in an external dealer, So if there are shared expenses, I mean, if somebody is the host. Nothing says they have to like eat all the expenses themselves, right, But they're not trying to directly profit them game. Maybe they're trying to build a network, Maybe they're maybe they think they're a winning player in the game, but they're not. They don't make money per hand or per hour just by the mere act of running a poker game, right. That's that's the one clear distinction. By the way, if you want to be technical, you know, check the laws in your local state. As far as I am aware, where have I ever played private games, I guess New York, California, those states, poker is pretty clearly legal, I believe. If you're if you're not taking a rake, yep, it was gonna be careful. The Feds don't always interpret gambling law that sympathetically. If there's a lot of money changing hands, if there's you know, if there's a bunch of drug use or prostitution or things like that at your game, then you know, but typically poker gets kind of like caught up, you know. If I had to guess, well, I don't know. If I had to guess, I would think that the NBA investigation came first, and the poker kind of got dragged into it. Maybe that's wrong, but in terms of kind of like what things that fed typically prioritize more, maybe it's from the poker is actually more money allegedly, right and totally more than seven million at least quote unquote they say.

00:12:41
Speaker 1: But I would actually think that. I mean, from my perspective, it seems like the poker would probably not have been that would not have happened without the sports betting because in the sports betting there are just many more parties that are directly related to state institutions. Right, because now that sports betting is legal in over thirty states, states are actually reliant on tax revenue sports betting from the big companies from all of that legal stuff. So there's a lot of Now it's been formalized in such a way that like it just draws a lot of attention. It's not just an internal NBA thing, right where the NBA can say like, oh, I've investigated my player and everything seems to be okay or not. But now you have all of these different organizations with different incentives. Because I think that on its own, like the NBA isn't necessarily incentivized to go over after everyone so ardently but together. Once you have the sports betting companies, once you have state involvement, once you have all of these things, then that's where like, that's where shit hits the fan.

00:13:54
Speaker 2: And we'll be right back after this break. I am not as sympathetic to the people who are defrauded. Let's say it's not a victimless crime, right, the victims entered into this den of iniquity.

00:14:20
Speaker 1: Kind of which fun we're talking about poker now, for poker.

00:14:22
Speaker 2: Right where they're playing games that if you're playing at high stakes, you ought to know that there are various kinds of risks, right. I mean, it's just like people don't realize the extent to which everything that a casino does, right from like what they do when you cash your cash in for chips, to like you know, burning a car before dealing the flop, right, even things people don't think about, like you know, why are there where it's a two color deck black and red instead of four colors which they use in our creatially games sometimes, Well it's because like it's hard to distinguish if you want to see two colors and black and red kind of both appear kind of dark kind of dark hued colors. Right, you know if a dealer, secondly you're unmistaken, flashes flush as a card, you can see the bottom of the deck, Right, it gives you less information if you don't know as much about the suit, right, and so like, all these procedures that have been put into place for many years have made poker and casino environments relatively safe enterprises. Which is not equilibrium otherwise, right. Equilibrium otherwise is that you know it's someone cheats. Whereas the NBA scandal, it's not just that, like the betting companies are defrauded and the league is defrauded. It also affects the interests of fans and affects the interest like the integrity of the NBA. It also affects like people like me who are trying to win money the right way at sports betting. Right, you can try to read the tea leaves of what kind of like a I don't know if you call the line rigged, but you know you can often detect the presence of frankly of inside information in the line. Right, It's hard to know when it's inside information versus like when is their sharp movement from a particularly skilled gambler or from a syndicate. Right, Billy Walters, the famous and I felt another sports better right. You know, he plays a lot of action, tends to come in late in the day. That's his philosophy, right, And if the book makers know which way he's betting, that might move to spread materially. Right. But like you, very often, if you've been in the NBA, have a sense that somebody knows something that I don't.

00:16:31
Speaker 1: Yeah, you know, it's it's really interesting in both of these things. I think something that came to my mind as someone who has spent a lot of time with con artists, right, and in that world, in both you know, the sports betting and in poker games, there's this real blind spot when it comes to yourself for most people, and being objective about kind of your own edge and like what you know, what is what is right versus not in the sense that like, if you know, the cliche is cliche for a reason. If it seems too good to be true, right, it probably is. And yet right when it comes to you, you think that, oh it's not actually too good to be true. I've just found a really great spot. I found a really great edge et cetera, et cetera. And with sports betting, Nate, it's that so unlike poker, which I do play, I've never bet on sports still, no, not even once. I've never placed to see those sports bet I promised Eric Sidell when I first started playing poker, and when he agreed to coach me and kind of meant to me, he made me promise that I wouldn't sports bet. So I have kept that promise. And yeah, he uh, he firmly believed that sports betting was the way to ruin for a lot of people. Not that I'd become a gambling addict, but that he has hardly ever met anyone who has a true edge, right, so unless you have information, and he, by the ways, bets on sports himself, but it's very hard to have an edge. So no, so I haven't personally ever bet on sports. However, what you were just talking about, I think that there's a lot of like, oh, like is this line right? Like you're trying to figure out is this too good to be true or not? And as you wrote in the Silver Bulletin earlier this week, like there were times when you took something and it ended up that it was too good to be true, right that like it just looked so good and you're like, I'm good a bet it anyway, and it was too good to be true, and so you are like when you are fucking with the integrity of it, like you actually are affecting a lot of people in very real ways. That's a huge problem. It's a problem for poker obviously, but you know, sports are kind of America's national pastime, and you have to believe that you're watching fair competitions, right, that players are trying their best, that everything, like that they want to win, like that they're playing their best game, that they're trying to kind of do whatever it takes. And if that faith is you know, fractured, right, if all of a sudden you're like, oh my god, you know that's not what's happening. I'm watching something that's rigged, but it's not supposed to be rigged, then you I mean, that's heartbreaking in some ways, right, It kind of shatters. It shatters a dream I think in a lot of licens.

00:19:16
Speaker 2: Let me hit on both the points serial. Let me first talk about like both poker players and sports betters are often naive about how thin their edges are right, yes, Now you know, live cash poker against fish fish or bad players, you can have objectively pretty large edges, yes there, right, So you know, sometimes you know, it might be rational in some sense to say, like, Okay, there's little few risks here, but this game is so good. Right, But yeah, no, I mean, like a lot of these things. You know, I don't know if you're as much of an NBA geek as I am, probably not, a lot of things are things that like are already problems with the league anyway. So the fact that like teams will try to lose the old tank in order to get a better draft pick, occasionally for other reasons, to manipulate their playoff spot to get a more favorable match. Right, For what I understand, the league has not been very diligent about like the cause for why somebody isn't playing. Also, you know you might strongly suspect I mean again, when I when I were spending the NBA, you know, you usually had a pretty good idea about like certain guys aren't going to play in certain games if they're back to backs for a bunch of games in a row. Teams tend to like obfuscate that into last minute for like a competitive edge, right, and the league has depends that you talk to not enforced that as producedly as they could. No other sports league like the NBA. Again maybe my favorite sports league has this trouble with teams tanking games and trying to lose.

00:20:48
Speaker 1: So as listeners of the show, now, I'm working on a book about cheating and games, which is very germane. Here the other sport where you see like so much cheating taking place, but it's not. It's a very different levels tennis, right, because that's somewhere once again where it's individual and individuals like you can easily affect the the outcome because it's not a team sport, right. From what I can tell, basketball is the other one, just because of the way that the sport works. And so I think that a lot of organizations, including the NBA, nate, if we put this back in kind of a game theoretic lens, they often are not thinking kind of long term, right. They're not thinking about incentives for like long term health. They're thinking immediately like oh shit, I need to cover my ass, right, Like it's better for me if I don't look too closely, it's better for me, if I clear this player, it's better. You know, people think everything's fine, and yet over the long term, if you don't pay attention to these sorts of things, that's when trust in the integrity of the game is going to flounder. And that's what actually matters. And so I think that you know this is true. You know this is true in poker and punishing cheaters, but people are very shortsighted and they think, oh, immediately like I don't want the bad press. And yet if you actually pay attention, if you actually punish, if the punishments are harsh, that's how you disincentivize the behavior and create a game that people believe in moving forward. And so you know, I would love obviously, you know, these indictments right now, allegations, we don't know what's going to happen, but I would really love for there to be, if there's the evidence, very harsh punishments, right, punishments that would deter anyone from towing even close to the line for whatever reason, because that's what you know, You're I'm starting to get into basketball night because of you. I'm only starting to see how fun this game is. And I don't want to I don't want to get into it just to be disappointed, because I think that players are trying to you know, tank games or something like that, and so I think that it's just so incredibly shortsighted to be lean or to say, oh, you know, it's okay and harsh is better. You want the fear of repercussions to be real, and I think in the past that hasn't been the case.

00:23:21
Speaker 2: I think the NBA, I mean it's a little bit a little bit trumpy in the sense that like, hey, look, deny it and then when people are paying attention on a Friday, put out some press release so it's been solved, or suspend somebody again. Like you know, if you've ever been like a PR situation or PR crisis of any kind, Like people have short memories. The new cycle is busy. There's lots of exciting things that are happening at any given time in the NBA or in the world. Right, but it kind of has like a cumulative effect. Right, we'll be.

00:23:54
Speaker 1: Back right after this.

00:24:05
Speaker 2: You know you mentioned tennis. You know the reason why best holds vulnerable Number one. These bookmakers are turning a team sport into an individual sport. So it's not just the fact that like, so, like you know, Jalen Brunson, the Near Knicks Blinkard, one of my favorite players, is spoken about how like people will be chripping at him from the sidelines. But like, Jalen, you're supposed to score twenty two points and you have twenty one. You know, what the fuck's going on? Right, and that kind of thing, you know, get like death threats and nasty messages and so like, Yeah, one of the protections in a team sport is that if one conspirator or a couple are cheating, it certainly shifts the odds and that that you have a very profitable bet. But like famously, sometimes these things don't work. Right. There was a Boston College college cheating scandal which did involve the Mafia in the nineteen seventies, but like you know, only like one and a half players were doing it, and they, like, I think the Mafia didn't actually win the majority of its bets, right, So the fact that you're kind of turning a team sport into an individual sport with prop bets is problematic too. But I want to go at like, why do you think Terryer made one hundred and fifteen more than that made over one hundred million dollars in his career. Right, yeah, Chauncey Billups probably similar current head coach. I'm Terry gets paid pretty well a lot, so we can do speaking gigs and advertisements whatever else. Why do you think, Maria, people like that are participating in these in these schemes? So yeah, well you wouldn't think they were desperate. Frank come, you never know when somebody has a gambling problem or another type of problem. But why do you think they're doing this?

00:25:35
Speaker 1: I mean, I think I think it depends on the exact situation, but I think oftentimes it's not for the money, right, So for someone like Terry, maybe it's to feel important and feel like he has influenced and like be a cool dude for his friends, right, because a lot of his stuff when I was reading the indictments, it was giving tips to like childhood friends or you know, homeboys and trying to try to help them out, which is why it wasn't huge amounts of money, right, This is why we're not We're not talking millions or it was smaller bets. And I think that I think that that kind of image creation, like I'm the chill dude who can, like, you know, be cool. I think that that's actually a huge incentive for people. And I don't know much about his career or anything like that, but it seems and please correct me if I'm wrong, that it's not like he's a top tier player who is always you know, who people are talking about and they're like, yeah, look at him. Go. So it's a way of, you know, kind of propping up your ego in those situations. Now, a lot of people who were top tier players. And by the way, this talk this is not just sports. This is true of poker, This is true of a lot of things. If they feel like either they're losing their edge or like they're they're about to or they're not quite sure, cheating is a way to make certain that you at least make some money, right, to make certain you win, to kind of solidify that like, oh, you know, I will for sure.

00:27:02
Speaker 2: Everybody else is doing it, right, you know, you feel like everybody else is doing it, I have to do, you know, the number one.

00:27:06
Speaker 1: So that's yeah, absolutely, that's that's kind of the ants Armstrong, right, Like, why why is someone like Land's armstrong.

00:27:14
Speaker 2: Barry Bonds and baseball was one of the best players in the league before steroids, and and like, well fuck these yeah, fuck these guys like Mark maguire for.

00:27:23
Speaker 1: Sure, Yeah, for sure. And then some people just get off on it like should be perfectly honest, Like some people like the idea that like I'm pulling one over on people, like I'm in charge. Maybe someone like Terry like feels slight or even Chauncey feels slighted by the league, like they didn't appreciate me enough, like they didn't value me enough, Like they didn't pay me quite enough for whatever they did this bad thing to me. I don't like what they do with X or why. So a lot of times there's a lot of work on this. When people can find an excuse in their head, you know, why they're not adequately valued, why they're you know, why they're being overlooked, something like that, then they want to say fuck you to whoever is doing that, whether it's the league, whether it's the company they work for. So a lot of people justify you know, stealing everything from like taking office supplies home to actually you know stealing. Once you get that rationalization in your head, like some people would just easily cross that line. And then so it's like kind of sticking it to the man in certain ways. And you also think, like you rationalize it away to say that it is kind of a victimist crime, like I'm helping out like myself and I'm helping out you know, my boys or whatever it is, and like they're a big corporation they can take it. Or in the case of poker, like come on, like they get the honor of playing with me, they get the celebrity status by being in this game, and I'm giving them something back, so I'll take their money. They're paying for the experience. Right, You get all of these rationalizations in your head that make you do it. And I think that people when they say, oh, but like they're not stupid, like they wouldn't risk it all for this, Actually yes they would because they don't think they would be caught. Right, Like, all of these things went on for over a year, it sounds like multiple years. And if the more you can get away with it, right, if you're not caught the first time, if you're not caught the second time, you start thinking that you're invincible, and you start getting this thing like you know I won't be caught, Like everything is fine and I can keep doing this, So you actually think your risk is much lower than it is. And even if I'm caught, there's going to be a slap on the wrist. They'll say they investigated me and it was fine. They didn't find anything suspicious, like my leg really was injured or whatever it is. So the repercussions are not really going to be serious enough, and I'll continue doing what I'm doing. So I think all of these things are just layered one on top of the other and are play in both of these situations, both of these indictments.

00:29:53
Speaker 2: But yeah, look, one one way you can defend the big draft Kings, Fanduels, Caesars and GM's of the world, right, is by saying that like, they are much better equipped to detect this and then either incentivized or required to report it when they do in suspicious activity. Right. And so first of all, you know they are not doing bookmaking in the traditional robust way because you have these sharp bookmakers, and you have bookmakers. I'll mention Draft Kings, which is a book markets regarded as being at least when I was spending the NBA a couple years ago. Now, all that's sharp.

00:30:27
Speaker 1: Right.

00:30:27
Speaker 2: They're a retail sports book, and their business model is customer discrimination and differentiation, where if you're a VIP at a place like Draft Kings, you know, at a friend who literally get cases of his favorite Cabernet mail to his house, and like you know and like front row seats for New York Rangers games and and things like that, right, and you know, at some level of access you get private jets to the Super Bowl or whatever, right, and they can make infinity dollars basically, whereas I am limited by most of the sports books. And I'm not I'm not that good. I mean I've won a little bit of money at sports betting, right, but like not a pro. I'm just trying to trying to be good. Nobody should be taking one hundred thousand dollars worth of action on Terry Rogier under rebounds or whatever. Right. The only reason someone would bet that is because they have inside knowledge, or maybe maybe if they have a very particular model. Right, But like you don't want to. You don't want some super sharp mi I T kid with a model to exploit this obscure part of your menu, right, And you don't want people inside information betting, but they figure that, Okay, well we know who our good and bad customers are, and we don't want to fuck with our with our vps as they're so called, right, they can do what they want, and yeah, I mean now then they might get a tip, but like so they're not. It's not a robust form of bookmaking, right, It's a form of book maanking that relies on on customer identification and like so, like that's part of why I'm less sympathetic, and because like when the gambling companies, you know, in general, when you pass legislation, then you kind of pass the skeleton of the legislation, and then the lobbyists and the indus, if you interest do their work to interpret that legislation in ways that like is shockingly favorable to those vested interests. Right. You do have some states Massachusetts now and New York has looked into like, okay, should really be able to let some people, but literally ten dollars on a game a million dollars in the same game, probably not right. But like, if you're drafting regulations, like I think the average sports better doesn't realize that if you are if they think you're good, they will limit you. If they think you're good, they will not take meaningful amounts of money from you in terms of action. Right. By the way, when you look at the ads for sports betting, if you come back to the ads for daily fantasy sports, they were marketed as a game of skill. Right, you are. Daily fantasy sports is where you draft a team, and you draft a team a real player that you compete against other people, and the house takes a cut or a rake like poker or something. Right, they have no interest in particular and who wins that outcome, And they'd say it's a game of skill. The ads would like literally just say you are Joe Schmoe sitting in your office, drone job. Right, go to DraftKings or FanDuel. Right, you can win millions, have and sleep a Supermodels. It was like it was like not that subtle because you're smart and they're dumb. It was like very unsettled, appealing to the male ego. And now they don't do that, right, They don't want to advertize that as a game of skill because if they think they're skilled, then they won't let you bet very much. Right, And so like I mean that's you know, that whole thing is is is kind of bullshit. It's not a unique innovation, I guess of like American sports betting lines, but like, you know, British companies were notorious for doing this too, but like, but still it's moved a long way from the traditional form of bookmaking. And the other thing to people don't realize is like sports betting was for many years in Vegas what was called an amenity AMEI and it y right, you're in the middle of the deserts, you have lots of physical space. You know. Sometimes people want to be in a casino and actually you know, so if you're in a casino and you want to lose not that much money, right, actually, one of the better things to do might be to bet a thousand dollars on an NFL game. If you're bet naively that you know that that has a negative expected value of forty six bucks, right typical point spread, hold margins right for forty six bucks, you know, three and a half hours of entertainment watching the game in the sportsbook and like getting three drinks and sweating with your friends or whatever. Rate Like, it's actually not that bad, but it was kind of seen as an amenity, right, and there's kind of this fastikas some guys can beat the lines, right and like, but it's moved away from that model. And by the way, but it was one percent of one percent of revenues is from the sports book, right, it was almost a lost leader. And the notion that like you can have this market where like sports betting is huge and yet you limit sharp betters is is I don't know, it's kind of at best, at best unproven.

00:34:54
Speaker 1: Right, Yeah, No, I mean I think that one of the things that these indictments have shown us is that, you know, we need a more centralized, rigorous approach to how do we, you know, how do we regulate this, right, how do we what kinds of supports bets for which amount? Like can we standardize something that actually upholds the integrity of the games, that will avoid situations that you know, turn team sports into individual sports, that kind of change those incentive structures around It's it's a tough ask, right because, as you say, Nate, like, there are you know, various forces pulling you in various directions. But I think it's doable, and I think that, you know, it's something that people need to sit down and think about. But it's not like an easy band aid fix like oh, you know we need to just like limit all bets to X or or do thing. Why. I think it does require a nuanced understanding of sports betting, which frankly, I don't think a lot of legislators have. Like no, I.

00:35:52
Speaker 2: Wouldn't think so either, and you know, and frankly the media doesn't either. I mean the media has default toward like scoldiness about this, and like exactly if you don't have those legal sites, a lot of it goes underground. On one hundred percent, I mean that's absolutely thing, right. You know, I'm actually betting in the NFL this year. Believe me, Maria. I know how, and I have at some points in the past like made bets set in the grey market using crypto and things like that. I know how to do that. It's just not worth the trouble, right, you know, whereas if it's it's it's Draft Kings or FanDuel, right. I mean literally, even like the uspit in the NBA, I was like staying at the Wind. I guess it's for the Wind December poker tournament, right, And there's like here's an NBA bet. I'm want to bet eleven hundred dollars and as an expected value of like one percent, probably right, so the infected value is like twelve bucks, right? Do I want to go down to the fucking sports book window and like place this bet right and feel like a d gen? No, it's only worth twelve dollars. I'll stay in my room. And yeah, So there's like shit like that where like even that friction of like the ease of online betting. So, yeah, there are few categories, you know. One one has to do with like you have to limit the menu of bets, right, if you want to bread on Lebron James or Nikola Yoki, just gonna do fine.

00:36:58
Speaker 1: Right, But like that, Yeah, that sounds like low hanging fruit. I think that that's low hanging fruit. That that's something that could immediately be done. Right, Yes, the menus should be limited.

00:37:09
Speaker 2: I think you need some constraints on this, limiting your price discrimination. Right, I'd go radically, I guess I'm self interested. I'd go radically and say everywhere gets the same price. Right, you post sublimits, you know, if you want to say, okay, we can have a spread of two x or four X or five x or something. Okay, that's fine, right, but like it lets you lets you put irresponsible lines up that are subject to cheating or manipulation, right if you only take bets from people who you think are going to lose on them, right, It's like it's it's like one of these carnival games where where let's ease you to like, you know, throw the ball at the bullseye and get the free stuffed animal. But like it's actually pretty difficult, and number three is probably like, you know, creating more friction. If you had a twenty four hour winning carry between you deposits and money and when you bet, right, that would create meaningful friction if you required you say, okay, you know in the UK, don't its is still true? I guess it must still be true, right you don't. It's like a Ladbrokes shop, right, you're chippy and then you get your go to the betting window and whatever, right you know saying okay, you know you want to bet, you just have to go to a physical location and then add some additional protection. You can know your customer laws. You know, if somebody seems like they're got crative line or abusive, right, you can deny their action that kind of thing, right, and so like you know, so yeah you want I bet okay, And there's gonna be a little DraftKings office and then throughout New York and maybe it's a nice little barther if you want to watch your games, right, but you have to physically mean a location to bet. You know, I wouldn't go that far. I wouldn't advocate for all of this, but like, but you know, public opinions turning against this, right, people are for both getting that reasons. People are prudish, but like the industry I think has been short sighted. It was that it was a power grab and or a money grab, right, and now they're paying the price for that.

00:38:58
Speaker 1: Yeah. So I think that are three major recommendations, because I do agree with the framework. Is one limiting menu of bets, so basically actually taking a look at what makes sense, what doesn't make sense, what's kind of in the spirit of the game versus not to transparency and standardization. And three adding some friction in for for the ability to place bets so that people aren't kind of in the spiral where like you know, they they get into they get into situations that they can't then get out of. I think that these those are kind of three buckets that are probably really good places to start so that sports betting can regain its good reputation, because kind I had a good reputation right, but can can get can get public sentiment more on its side. I think that that that would be helpful. And I think that if those types of improvements come out of this scandal, that will be something. On that note night, I wish you the best of luck getting out of Mexico.

00:40:01
Speaker 2: I actually can't draft Kings on their runway. If I would have fucking gotten like plus behine, your flight will not take off tonight right now.

00:40:09
Speaker 1: That'd be great. That'd be great you had some inside information.

00:40:12
Speaker 2: Saying it real. I'll tell you that much.

00:40:15
Speaker 1: For Ria Well, I hope that you this is your last night at El Kaminoreal, or that last night was your last night, and that tonight you will safely be in your New York City apartment. Let us know what you think of the show. Reach out to us at Risky Business at pushkin dot fm. Risky Business is hosted by me Maria Kanakova.

00:40:42
Speaker 2: And by me Nate Silver. The show was a cool production of Pushing Industries and iHeartMedia. This episode was produced by Isaac Carter. Our associate producer is Sonya gerwit Lydia, Jean Kott and Daphne Chen are our editors, and our executive producer is Jacob Goldstein. Mixing by Sarah Bruger.

00:41:00
Speaker 1: If you like the show, please rate and review us so other people can find us too, But once again, only if you like us. We don't want those bad reviews out there. Thanks for too again