Speaker 1: Welcome back to a Numbers Game with Ryan Gerdusky. I
Speaker 1: want to thank you all for joining me again. Please
Speaker 1: like and subscribe to this podcast. It really means a lot,
Speaker 1: and if you give me a five star review, that's
Speaker 1: extra special. In the twenty nineteen movie Uncut Gems, Adam
Speaker 1: Sandler's character Howard Rattner exclaims, I made a risk, you gamble,
Speaker 1: and it's about to pay off for a lot of Americans.
Speaker 1: That's a lot of the last month has been when
Speaker 1: March Madness happened, it was about gambling, specifically online sports gambling,
Speaker 1: and that's what I want to talk about during this episode.
Speaker 1: According to the CBS News, three billion dollars in wages
Speaker 1: were placed in the last few weeks on the NCAA tournament.
Speaker 1: Online sports scambling has become a revolutionized industry in the
Speaker 1: last half decades since the Supreme Court declared that the
Speaker 1: Professional Amateur Sports Protection Act of nineteen ninety two, otherwise
Speaker 1: known as PASSPA, was unconstitutional. Signed by former President George HW. Bush,
Speaker 1: PASPA effectively outlawed sports gambling by corporations in most parts
Speaker 1: of the country, with the exceptions of four states Nevada, Delaware,
Speaker 1: Oregon and Massachusetts. Since the twenty eighteen decision by the
Speaker 1: Supreme Court, thirty United States have legalized sports gambling, which
Speaker 1: is Alabama, Alaska, California, Georgia, Hawaii, Idaho, Minnesota, Oklahoma, South Carolina, Texas,
Speaker 1: and Utah being the last holdouts of the sports gambling industry.
Speaker 1: With the market open and a majority of the country,
Speaker 1: thirty five different companies now operate sports gambling, like FanDuel
Speaker 1: Caesars Drafting. Those are the largest and their primary target
Speaker 1: are young men drawn to the industry. Well, how big
Speaker 1: is the industry? In twenty twenty four, more than one
Speaker 1: hundred and fifty billion dollars in bets were wager that's
Speaker 1: just in one year. That's larger than the GDP of Mississippi.
Speaker 1: Players are not only able to wager on games, but
Speaker 1: individual plays, leagues, individual players. This easy access to sports
Speaker 1: gambling on one's phone has led to a rise in
Speaker 1: gambling addiction, debt, and customers who are increasingly getting younger
Speaker 1: and younger when they start placing bets. A twenty twenty
Speaker 1: three survey from the NCAA found that fifty eight percent
Speaker 1: of eighteen to twenty two year olds placed at least
Speaker 1: one online sports bet. In the last decade, that number
Speaker 1: increased to seventy percent. For college kids living on campuses.
Speaker 1: Those young gamblers lose on average ten to three hundred
Speaker 1: dollars per day. If they did that every day, that
Speaker 1: means that sports gambling could be easily a larger part
Speaker 1: of their budget than their food, their rent, their social life.
Speaker 1: In three years since online sports gambling became legal in
Speaker 1: New Jersey, the number of people calling the state's gambling
Speaker 1: help hotline has tripled, with the largest demographic coming from
Speaker 1: Man between the ages of twenty five and thirty four.
Speaker 1: This is not you know, your average gambler. This is
Speaker 1: not somebody who in old man who would bring you
Speaker 1: to the race streets at the racetrack, my grandpa, the
Speaker 1: Usperman racetrack. But bring you know, bring some money from
Speaker 1: the social Security check to the racetrack and bet on
Speaker 1: the ponies, or go to the casino and hit some slots.
Speaker 1: These are young men who are increasingly becoming addicted to
Speaker 1: the lore that you can become wealthy just by betting
Speaker 1: from your phone. One gambling addiction counselor noted that her
Speaker 1: youngest client was a fifteen year old boy who spent
Speaker 1: nearly nine hundred thousand dollars on FanDuel using his parents'
Speaker 1: credit card and grandparents' Social Security checks while making bets
Speaker 1: at school. A lot of state governments are also making
Speaker 1: a lot of money, and they're hoping to make more
Speaker 1: using online sports gambling taxes. In twenty twenty, three states
Speaker 1: collected nearly one point eight billion dollars in tax revenue
Speaker 1: from sports gambling, but it's not evenly divided across all
Speaker 1: thirty nine states. New York raked in the most with
Speaker 1: eight hundred million dollars in a single year, while South
Speaker 1: Dakota only made one hundred thousand dollars. But all this
Speaker 1: money is really worth it for the states, bankruptcies have
Speaker 1: exploded that legalized online sports gambling. One study had that
Speaker 1: the number increased for twenty five to thirty percent in
Speaker 1: three to four years after the state legalized the industry.
Speaker 1: Young Men in low income areas are increasingly at risk,
Speaker 1: with a noted decline in their credit score of point
Speaker 1: five percent and debt collections up eight percent. The whole
Speaker 1: industry becomes even more sinister in nature when you realize
Speaker 1: that certain companies really just run monopolies in their respected states.
Speaker 1: Take the state of Florida. In twenty twenty one, Florida
Speaker 1: offered an exclusive sports gambling license to the Seminole Indian Tribe,
Speaker 1: and in return, the tribe had to agree to pay
Speaker 1: two point five billion dollars over the first five years,
Speaker 1: with revenue sharing continued until the agreement expires in twenty
Speaker 1: fifty one. After a prolonged court battle, they open up
Speaker 1: in November twenty twenty three and the tribe man operating
Speaker 1: deal with hard Rock Digital. Other companies like FanDuel and
Speaker 1: Sports can try to make their way into the industry
Speaker 1: in the state, but to no avail. Their only avenue
Speaker 1: is to work in partnership with hard Rock. In just
Speaker 1: the first forty five days after hard Rock has a
Speaker 1: monopoly in the state went live, addiction to hotline calls
Speaker 1: increased by one hundred and thirty eight percent. With convenience
Speaker 1: of mobile apps, individuals can place any time, anywhere, any place,
Speaker 1: and the companies know it because they monitor you. Is
Speaker 1: essentially a data company. They sit there and they know
Speaker 1: when you're most likely to bet, what advertisements make you
Speaker 1: want to bet more, and methods to keep you hooked
Speaker 1: using AI to make gambling more addictive and luring end
Speaker 1: users at younger ages with greater frequency, because essentially, these
Speaker 1: data companies are in the business of creating addicts. A
Speaker 1: study from the Southern Methodist University monitored seven hundred thousand
Speaker 1: online sports betters and found that less than five percent
Speaker 1: actually withdrew money from their betting apps, you know, anything,
Speaker 1: more than they deposit it. That five percent won more
Speaker 1: than one hundred million dollars, which was covered by the
Speaker 1: best place by eighty percent of betters. The bottom three
Speaker 1: percent of betters made up all the money for the
Speaker 1: profit they live off. Of the bottom three the people
Speaker 1: who are the most addicted, the most degenerative gamblers. They
Speaker 1: those industries prey on them to make money. That's how
Speaker 1: they sit there, and they actually draw, you know, profits
Speaker 1: from these things. And these are people who will go
Speaker 1: into debt. These are people who will steal from friends
Speaker 1: and families. If their addiction gets worth, they will sit
Speaker 1: there and mortgage their house and steal from their kids'
Speaker 1: college fund. This has all been happening over the last
Speaker 1: seven years. If you're one of these winners, people who
Speaker 1: do exceedly well online sports gambling companies are allowed to
Speaker 1: limit the amount of money you can gamble with. They
Speaker 1: limit their losses and your gains. And while many states
Speaker 1: force online sports betting companies to dissuade attics, most targeted
Speaker 1: advertisements and notifications directly encourage people to gamble frequently. I
Speaker 1: quoted the movie Uncut Gems the top of the show,
Speaker 1: and a film about a jeweler who is addictioned to
Speaker 1: gambling and the rush it gives him ultimately puts himself
Speaker 1: in a situation that costs his life. Millions of Americans
Speaker 1: are putting themselves in a financially precarry situation at a
Speaker 1: very very young age, and state governments are giving them
Speaker 1: the green light in the name of tax dollars. You're
Speaker 1: listening to It's a Numbers Game with Ryan Gerdosky. We'll
Speaker 1: be right back. My guest this week is Charles van Lehman.
Speaker 1: He is a fellow at the Manhattan Institute and overall
Speaker 1: a very smart guy. Charles, thank you for being here.
Speaker 2: Absolutely happy to be here, so, Charles.
Speaker 1: In September twenty four you wrote an article for The
Speaker 1: Atlantic saying that online sports gambling not only was bad,
Speaker 1: but probably should be abolished. How did you come to
Speaker 1: that opinion. That's a very different opinion.
Speaker 2: I know. Well, there are a couple of different answers there.
Speaker 2: One answer is that I am more gung co about
Speaker 2: prohibiting things than many other people are, and I can
Speaker 2: explain why. But the more approximate relevant answer is I
Speaker 2: looked at the social science on what has happened with
Speaker 2: online sports gambling since it was legalized essentially nationwide in
Speaker 2: twenty eighteen, and I concluded it's been basically all downside
Speaker 2: and very little upside. It's important to note for the
Speaker 2: benefit of the audience that you know, back in the
Speaker 2: dystopian age of twenty seventeen, sports gambling online sports gambling
Speaker 2: was essentially legal nationwide. There were like a couple of
Speaker 2: carveouts thanks to this law from the nineteen nineties called
Speaker 2: the Professional Amateur Sports Protection Act PASPA, which basically which
Speaker 2: prohibited sports gambling because at the time, members of Congress,
Speaker 2: all the major sports leagues, everybody sort of agreed sports
Speaker 2: gambling was going to corrupt the game, it was going
Speaker 2: to be a huge issue. Fast forward to twenty eighteen,
Speaker 2: NC double A and New Jersey are in a lawsuit.
Speaker 2: Although they basically are colluding at this point for whether
Speaker 2: or not this story yeah, yeah, whether or not laws
Speaker 2: constitutional Supreme Court says no, it's not. The door is
Speaker 2: open for sports gambling legalization. Over the ensuing six seven years,
Speaker 2: sports gambling is legalized. I think the figure is now
Speaker 2: forty out of fifty states have leader sports gambling. Yeah,
Speaker 2: thirty nine plus DC I always get them. Yeah, and
Speaker 2: Missouri there are There are ballot initiatives and legislative action
Speaker 2: all the time. I've been asked to comment on both
Speaker 2: Hawaii and Minnesota's efforts to legalize in recent weeks. So
Speaker 2: it's going to continue to move because of the way
Speaker 2: that sports gambling rolled out across different states at different times.
Speaker 2: You can empirically and I can get how this works,
Speaker 2: but you can get a really good idea of what
Speaker 2: the effects of sports scambling are. You can pretty effectively
Speaker 2: overcome the correlation causation problem and say with a strong
Speaker 2: certainty what happens when you legalize sports gambling. And so
Speaker 2: there are a couple of research papers that basically look
Speaker 2: at really big groups of people, really groups of consumers
Speaker 2: in states that haven't have not legalized sports gambling. Point
Speaker 2: active legalization and all of the effects are like pretty
Speaker 2: remarkably bad. You see large increases in de delinquency, large
Speaker 2: increases in risk of bankruptcy or bankruptcy rises twenty to
Speaker 2: thirty percent against a small baseline, but still. One of
Speaker 2: my favorite figures is that for every dollar that people
Speaker 2: spend on sports gambling, they end up forgoing two dollars
Speaker 2: in investment, so like two dollars that don't go into
Speaker 2: your Schwab account or whatever. And all of those harms
Speaker 2: concentrate among the most precarious households. So the households that
Speaker 2: have a history of bankruptcy, their bankruptcy risk goes up,
Speaker 2: have a history of overdrawing their account, the risk goes up,
Speaker 2: and particularly.
Speaker 1: Who are not typically good with money to begin with,
Speaker 1: become worse.
Speaker 2: Yes, yes, precisely. Again, you see this in particular among
Speaker 2: young men in poor counties. That's really where the effects
Speaker 2: ends of concentrating. And so you get this picture of like,
Speaker 2: do you know sports gamblers?
Speaker 1: My brother gambles on sports, but like I think like
Speaker 1: very little, but I don't follow any sports, so I
Speaker 1: don't know. I'm not I am the worst person to
Speaker 1: talk about sports on period, but like I kind of know,
Speaker 1: but I would never. I don't have any interest.
Speaker 2: I don't know.
Speaker 1: To me, going to a craps table is the only
Speaker 1: fun game because it's a communal game. Everything else is
Speaker 1: like antisocial in a certain way and just not as fun.
Speaker 2: If you ask around, you know somebody who knows somebody
Speaker 2: who's thousands of dollars tens of thousands of dollars in
Speaker 2: the hole on a sports scambling app right now, And
Speaker 2: that guy is probably young, almost certainly male, probably not
Speaker 2: particularly skilled, probably particularly highly educated, really cannot be afford
Speaker 2: to be that deep in debt. We're pretty sure that
Speaker 2: those people's lives have gotten a lot worse by virtue
Speaker 2: legal lations sports. Yeah.
Speaker 1: I saw this one interview with this one debt gambling counselor,
Speaker 1: and she said her youngest gambling client or a gambling
Speaker 1: adic client, was fifteen years old and had spent nine
Speaker 1: hundred thousand dollars basically taking his grandma's social Security and
Speaker 1: his parents' credit card their knowledge, and just like over
Speaker 1: the course of several years, nine hundred thousand dollars at
Speaker 1: fifteen years old.
Speaker 2: What is so?
Speaker 1: The the goal for states is they're constantly told more
Speaker 1: tax revenue, more tax revenue, what I've read is that
Speaker 1: there is a huge difference in what states are making
Speaker 1: a lot of money for tax revenue and what states
Speaker 1: are making. Me a little like South Dakota's making one
Speaker 1: hundred thousand dollars a year for tax revenue, New york'sick
Speaker 1: eight making eight hundred million dollars. Is the is it
Speaker 1: worth it to these states? Like, is the financial cost
Speaker 1: from the deprivation of social capital from the increase in bankruptcies?
Speaker 1: Is that worth one hundred thousand dollars in South Dakota?
Speaker 2: I mean, no, it's my answer. You know, I think
Speaker 2: the important thing there is that like that's going to
Speaker 2: be a function of demand. Taxation is like you know,
Speaker 2: how big is the market is it's just a percentage
Speaker 2: of the transaction, and so the more transactions, the more
Speaker 2: tax revenue. So yeah, I mean, like, if you add
Speaker 2: up all the sports gambling revenue in a given quarter,
Speaker 2: New York ends up being I forget what the exact
Speaker 2: fraction is, but it's somewhere between a quarter and a
Speaker 2: half of all of the revenue. But like, objectively speaking,
Speaker 2: even in New York, you're not getting that much money
Speaker 2: if you think about it as a fraction of total
Speaker 2: government outlays. It's consistently under one percent across states. I
Speaker 2: think Indiana, it's like one percent of all their revenue
Speaker 2: comes to sports scampling. You get less out of sports
Speaker 2: scambling then you get from alcohol taxes, tobacco taxes, from
Speaker 2: marijuana taxes, all those things.
Speaker 1: Now, scambling is not like the equivalent of like o
Speaker 1: zembic is to like the Netherlands or Denmark.
Speaker 2: Yeah, to Denmark. No, it's and this is like always true.
Speaker 2: Taxing sin is not a great way to generate revenue.
Speaker 2: Is a good rule of thumb, Like you just you
Speaker 2: don't get a lot of money out of it, partially
Speaker 2: because the goal of syn taxes is mostly to deter
Speaker 2: the behavior, not to generate revenue. Like ultimately, unfortunately, you
Speaker 2: get the most revenue out of taxing productive activities like
Speaker 2: generating income or being a business or owning a home.
Speaker 1: Yeah yeah, so how much does because what everything I've
Speaker 1: done research on AI seems to play a very important
Speaker 1: part of the online sports gambling industry because it is
Speaker 1: built to learn when you're most likely to make a bet,
Speaker 1: how to make you more addictive, what things appeal to you.
Speaker 1: Has I mean, AI is always has been around, obviously
Speaker 1: since twenty eighteen, but it's become much more advanced in
Speaker 1: the last seven years. How much has that played a
Speaker 1: part into the growing addiction.
Speaker 2: I mean tremendously. And I would talk more broadly about
Speaker 2: the category of machine learning, because you know some machine
Speaker 2: many AI things and machine learning things. This doesn't really
Speaker 2: matter for purposes of the conversation. But yeah, you know,
Speaker 2: when you interact with an app, whether it's a sports
Speaker 2: gambling app or a social media app, that app is
Speaker 2: collecting information about you, it's collecting information about everybody else
Speaker 2: who's using the app too, And then you apply machine
Speaker 2: learning algorithms to all of that data and you can
Speaker 2: start to recognize patterns in the space of gambling. And
Speaker 2: this is true before legalization. This is true in casinos
Speaker 2: for example. This is true of like slot machines. Gambling
Speaker 2: follows an eighty twenty law. Twenty percent of your users
Speaker 2: are in the generally eighty percent of your revenue. It's
Speaker 2: actually like probably more than that, like more concern to that.
Speaker 2: It's probably like three to five percent of your users
Speaker 2: are doing ninety percent of your revenue. By some estimates,
Speaker 2: I think it's five percent of fifty and ten percent
Speaker 2: is closer to ninety And so you can pick those
Speaker 2: guys out and then you can say, when does he gamble?
Speaker 2: Does he do it at night? Can I send him
Speaker 2: a prompt to reinforce him at night? What is the
Speaker 2: line that I can offer him to bet a little
Speaker 2: bit more? And you can do this all automatically. It's
Speaker 2: very straightforward from a machine learning perspective, because all it
Speaker 2: is is pattern recognition. But this gets, by the way,
Speaker 2: to a deeper point about like my argument for prohibition
Speaker 2: as opposed to sort of regulation, which is that capitalism
Speaker 2: is great. I like capitalism. Capitalism is about the efficient
Speaker 2: alignment of the interests of buyers and sellers. And when
Speaker 2: that the things that the buyer wants are good for him,
Speaker 2: that's great. When the thing that the buyer wants room
Speaker 2: are bad for him and he compulsively consumes them because
Speaker 2: he's addicted to them, that's not great. And in that
Speaker 2: situation you end up applying free market innovation to the
Speaker 2: problem of getting people to like ruin their lives. I've
Speaker 2: called this the iron law of liberalization. It's like when
Speaker 2: you liberalize goods, when you liberalize advice goods, the market
Speaker 2: applies its innovative capacity to it, and you end up
Speaker 2: with a much more potent, much more sellable product. Basically,
Speaker 2: whether it is marijuana, whether it is gambling, whether it
Speaker 2: is mushrooms, you see the same trend.
Speaker 1: So how much if banning is not possible because a
Speaker 1: lot of says don't want to ban it, they've just
Speaker 1: been legalizing it, how much can we trust the industry
Speaker 1: to regulate.
Speaker 2: Itself as a historical matter by analysis other industries, not
Speaker 2: at all. The industry will sort of come out. I mean,
Speaker 2: the industry's line is basically we want self opt out,
Speaker 2: and I'm like, that's great, but what is actually it
Speaker 2: means I can put my hand up and say, don't
Speaker 2: let me gamble anymore. It's like, so you know, I
Speaker 2: can put myself on a list, and it's like that's great,
Speaker 2: but actually not very helpful for somebody who's in active addiction,
Speaker 2: because like addiction is reinforcing. Like you know, my friend
Speaker 2: Keith Humphries is a Stanford addiction specialist, likes to say
Speaker 2: addiction is a chronic disease, but it's not a chronic
Speaker 2: disease like like you know, MS or whatever, because you
Speaker 2: in sometimes enjoy having it, that's why you're addicted to it.
Speaker 2: So people are not going to opt themselves out. And
Speaker 2: the reality is you look at vice industries, they are
Speaker 2: they have every rational interest in encouraging people to do
Speaker 2: bad things like I, you know, I think that's bad,
Speaker 2: but ultimately just sort of very predictable. This is true
Speaker 2: for big tobacco, This is true for the sales for pornography,
Speaker 2: for the seals in marijuana. Like the market interest, the
Speaker 2: market interest encourages the bad behavior because that's how you
Speaker 2: end up making a profit. And so you know, from
Speaker 2: a regulatory perspective, two things are true. One is I
Speaker 2: don't really think the industry is going to regulate itself.
Speaker 2: Two is that any efficacious regulation is going to be
Speaker 2: something that the industry fights tooth and nail, because you're
Speaker 2: going to end up sort of taking out that like
Speaker 2: ability to target the ten to twenty percent that makes
Speaker 2: up all of their profit.
Speaker 1: Right, And I read in sports gambling it's like the
Speaker 1: bottom three percent of losers pay some substantially higher amount
Speaker 1: of the entire industry, Like they depend on the most
Speaker 1: degenerative gamblers who are so deeply addictive, who like you know,
Speaker 1: cash their house out to sit there and gamble. It
Speaker 1: is they can't function as an industry without the deeply
Speaker 1: addictive right.
Speaker 2: You call those, you call those whales, And this is
Speaker 2: the again, this is the law across all addictive goods.
Speaker 2: Is that, like, you know, the way to think about
Speaker 2: it is, I don't know how often your brother bets,
Speaker 2: but let's say he bets on the game every Sunday.
Speaker 2: If you have a guy who's placing I don't know,
Speaker 2: ten bets a day, then he's doing seven hundred bets
Speaker 2: a week, which means that he is generating more revenue
Speaker 2: than your brother, brother, and six hundred and ninety eight
Speaker 2: other people who bet only once a week. That's how
Speaker 2: you end up with that, like preatodynamic, But if you
Speaker 2: can find the guy who bets ten times a day,
Speaker 2: he is worth way more effort than identifying the six
Speaker 2: hundred and ninety nine other people because he will give
Speaker 2: you exponentially more revenue. So like, yeah, it's it's just
Speaker 2: that's how the math ends up working out. Is that
Speaker 2: guy dominates. He dominates as a term in the equation.
Speaker 1: And there's nothing that they can like, they don't have
Speaker 1: to sit there and say, here's what I make a year,
Speaker 1: So I make one hundred thousand dollars a year or whatever,
Speaker 1: I can't possibly give you a million dollars. Like, there's
Speaker 1: nothing that this I mean this.
Speaker 2: This gets to the regulatory problem, right, because there are
Speaker 2: there are regulatory proposals that suggest things like deposit limits
Speaker 2: or having some third party confirmation that this person is
Speaker 2: able to put money down, or saying people can only
Speaker 2: put down a debit card, they can't put down a
Speaker 2: credit card. But like the industry will fight this tooth
Speaker 2: and nail because that's where all their money comes from, right,
Speaker 2: And the industry in many senses has a head start
Speaker 2: on all of this. You may remember the big sports
Speaker 2: books Draft Draft King's FanDuel existed prior to twenty eighteen.
Speaker 2: They were doing this sort of like gray area, like
Speaker 2: fantasy sports. You could, you know, build of fancy sports. Like.
Speaker 2: The entire reason for that was to establish an infrastructure
Speaker 2: so that that once sports gambling became legal, they were
Speaker 2: in a position to dominate the marketplace.
Speaker 1: And they have essential monopolies in certain states. Yeah, every
Speaker 1: single not every and not everyone has a license in
Speaker 1: every single state because of it. Earlier in the podcast,
Speaker 1: why is this so pervasive among young men.
Speaker 2: That's a great question, and I think there are lots
Speaker 2: of different levels on which one could answer it, and
Speaker 2: you can think about it very abstractly, as you know.
Speaker 2: One answer that I like is it's just that, you know,
Speaker 2: there is this sense of hustle culture among young men
Speaker 2: that like, the way to make it is to get
Speaker 2: rich quick, and gambling offers a way to get rich quick.
Speaker 2: But at a deeper level, it's just because young men
Speaker 2: are stupid, Like and we've been young men. I've been
Speaker 2: there exactly, I know exactly what it's like. Young Men
Speaker 2: are highly impulsive, they're prone to showing off. They like
Speaker 2: they they have a much higher risk tolerance than they're
Speaker 2: sex same age peers or their same sex higher age peers.
Speaker 2: Like you did stupid stuff when you were a young.
Speaker 1: Man from two or seventeen twenty two. I was probably
Speaker 1: clinically insane. They probably could have locked me up because
Speaker 1: absolutely absolutely right.
Speaker 2: And can you imagine if somebody been like, here's a phone,
Speaker 2: you can bet thousands and thousands of dollars, and hey,
Speaker 2: you could make it big, like terrible idea.
Speaker 1: Yeah, and that I had like one hundred dollars credit
Speaker 1: Lindo when I was like saying eighteen years old, I.
Speaker 2: Think about this a lot. If you look at if
Speaker 2: you look at trends in uh fireworks associated deaths every year,
Speaker 2: there's like big spikes on exactly the days that you
Speaker 2: would expect. It's July fourth, one hundred firework deaths. But like,
Speaker 2: if you look into the data, it's all young man,
Speaker 2: it's just like dudes doing stupid stuff with fireworks and
Speaker 2: let me launch.
Speaker 1: One off my ass or like or whatever.
Speaker 2: Exactly. Yeah, and if you could monetize that stupidity, like
Speaker 2: you'd make a lot of money. And in some senses,
Speaker 2: sports gambling is monetizing that stupidity.
Speaker 1: What how would ban work?
Speaker 2: Like?
Speaker 1: How is it just pull the licensing from it? Or
Speaker 1: I mean it's because it's not legal for a nationwide
Speaker 1: sports gambling. It's only legal in states. So would a
Speaker 1: state just pull the licensing? How would that work if
Speaker 1: they wanted to ban it?
Speaker 2: Yeah? So, and I want to back it up a
Speaker 2: little bit to talk about the logic because I think again,
Speaker 2: just to be very clear, between the early nineteen nineties
Speaker 2: and twenty eighteen, this was the status quote you could
Speaker 2: not legally specifically you could not legally run a sports
Speaker 2: gambling concern. States and private companies could not operate a
Speaker 2: sports gambling business for profit or for state revenue. You
Speaker 2: and I could have made a bet that would have
Speaker 2: been completely legal. That would have been fine.
Speaker 1: It's like we could have done the Super Bowl.
Speaker 2: Yes, exactly. Yeah. So the issue is that commercial interests
Speaker 2: or state interests cannot participate in that exchange. They can't
Speaker 2: try to profit off of that exchange. That's a really
Speaker 2: easy thing to prohibit because particularly large companies have a
Speaker 2: very strong and incentive to follow the law because otherwise
Speaker 2: they get hosed. It's really bad for your profit if
Speaker 2: you don't follow the law. The federal government will come after.
Speaker 1: You write that down.
Speaker 2: Yeah, oka recommend sorongly recommend following law. No, but so
Speaker 2: like so, like, all you have to do at a
Speaker 2: state level is just say this is not worth it.
Speaker 2: You have to win the political battle, which is really hard.
Speaker 2: But then all you do is you say we're going
Speaker 2: to march the number of licenses down to zero over
Speaker 2: the next five years, and we're going to be a law,
Speaker 2: and then it's done. Like you can have cross state
Speaker 2: you know, some cross state issues like people will go,
Speaker 2: I touch to somebody who would like stand in the
Speaker 2: corner of his apartment in New York so he could
Speaker 2: gamble in New Jersey. People will use VPNs, but you'll
Speaker 2: substantially reduce the level of usage. And we know this
Speaker 2: because that's what it was like in twenty seventeen. And
Speaker 2: also theoretically do things at the federal level. Part of
Speaker 2: the issue with the pass as it was overturned is
Speaker 2: that is the specific state carve outs. I think there's
Speaker 2: an open question of if you could have a nationwide,
Speaker 2: across the board ban on sports gambling, because there is
Speaker 2: you know, there is some nexus to interstate commerce basically
Speaker 2: anytime you use the Internet. So like the FEDS probably
Speaker 2: have the capacity to ban it writ large, but there's
Speaker 2: an open question there.
Speaker 1: Well, thank you so much for being on this podcast.
Speaker 1: You are so smart on this and many other topics.
Speaker 1: How can people read more of your stuff? Where could
Speaker 1: they go? How can they find you?
Speaker 2: Absolutely? I'm over on X Formally on Twitter, I'm at
Speaker 2: Charles F. Lehmann L e hm An you can also
Speaker 2: find me. I'm on substack. I'm at the Causal c
Speaker 2: A U S A L Fallacy, which nobody can ever find.
Speaker 2: It's really self defeating. I can explain it. It's like
Speaker 2: a wonky reference. And then I'm also I'm at City Journal,
Speaker 2: which is the flagship publication of the Manhattanants Too, where
Speaker 2: we publish lots of good things every week citydask journal
Speaker 2: dot org.
Speaker 1: Most of your stuff. It's really really good City Journal.
Speaker 1: So thank you so much being on this podcast.
Speaker 2: I really appreciate it absolutely thanks having me on.
Speaker 1: You're listening to It's The Numbers Game with Ryan Gardowski.
Speaker 1: We'll be right back after this message. Now is the
Speaker 1: time for the Ask Me Anything segment of the show,
Speaker 1: where you get to ask me any question quite literally
Speaker 1: about anything. If you want to be part of the topic,
Speaker 1: please email me Ryan at Numbers Game podcast dot com.
Speaker 1: That's Ryan at Numbers Game podcast dot com. It's a
Speaker 1: plural numbers and maybe I'll be talking about your question
Speaker 1: next week. This question came from a listener named Julie.
Speaker 1: She said, Ryan, do you miss DNN.
Speaker 2: No?
Speaker 1: I miss when I watched clips online because I don't
Speaker 1: really watch it on TV. When I watch it online
Speaker 1: and I see someone making an ass nine statement in
Speaker 1: common and you want to scream the television and I
Speaker 1: wish I was there to sit there and debate them.
Speaker 1: That's really the only part I miss. I miss the
Speaker 1: makeup and hair people. They were really nice. But I
Speaker 1: don't miss being on cable News. You know, I never
Speaker 1: worked for them. It wasn't like I lost the paycheck.
Speaker 1: You do it for free. Is that they're kind of
Speaker 1: promote yourself and your ideas, and I thought I made
Speaker 1: pretty smart ones. But whatever I mean. Actually, it's so funny.
Speaker 1: I saw ed Martin the other day and he said
Speaker 1: he's also been from Scena, and he said, we need
Speaker 1: to start a club that we can all get together
Speaker 1: with and hang out about it. But I don't miss
Speaker 1: cable News. I don't miss seeing him, particularly because I
Speaker 1: don't think that you get all that much enjoyment out
Speaker 1: of just screaming at another person during the course of
Speaker 1: an hour long show or even fifteen minutes. It was
Speaker 1: great while last and then yeah, that's that anyway. Thank
Speaker 1: you so much for listening this week. I hope you
Speaker 1: listen back later on this week for the second episode,
Speaker 1: where it will be wonderful. I think we're gonna have
Speaker 1: our guests and culter to talk about judges, So please
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Speaker 1: or wherever you get your podcasts. See you later this week.