WEBVTT - Men's Haircuts: SATS, FLUT, APO 0:00:03.160 --> 0:00:08.800 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:11.160 --> 0:00:14.360 Hello and welcome to The Money Stuff Podcast, your weekly 0:00:14.400 --> 0:00:19.080 podcast where we talk about stuff related to money. I'm 0:00:19.079 --> 0:00:21.079 Matt Levin and I write the Money Stuff column for 0:00:21.079 --> 0:00:21.919 Bloomberg Opinion. 0:00:22.239 --> 0:00:24.799 And I'm Katie Greifeld, a reporter for Bloomberg News and 0:00:24.840 --> 0:00:26.480 an anchor for Bloomberg Television. 0:00:27.320 --> 0:00:28.880 Katie, what are we talking about today? 0:00:29.240 --> 0:00:33.000 We're going to talk about Direct TV buying Dish. We're 0:00:33.040 --> 0:00:36.680 going to talk about fan duel and gambling addiction, and 0:00:36.720 --> 0:00:46.000 we're also going to talk about Apollo. Hey, Matt, have 0:00:46.120 --> 0:00:47.720 you ever gotten a really bad haircut? 0:00:48.080 --> 0:00:50.519 I've almost exclusively gotten really bad haircuts. 0:00:50.520 --> 0:00:52.239 I feel like I reached you cut that out. 0:00:52.360 --> 0:00:55.160 I've recently moved on to getting better haircuts, but for 0:00:55.280 --> 0:00:56.600 much of my life I got bad. 0:00:56.640 --> 0:00:58.920 Your last few haircuts, I've said, you've got a haircut. 0:00:58.960 --> 0:00:59.520 It looks nice. 0:00:59.560 --> 0:01:01.080 Thank you. That's the highest compliment. 0:01:01.160 --> 0:01:04.319 It's really easy to tell with men because you shorter hair. Anyway, 0:01:04.400 --> 0:01:09.399 moving so long. So direct TV paying one dollar for 0:01:09.480 --> 0:01:13.480 Dish and nine point seventy five billion dollars of debt. 0:01:13.920 --> 0:01:16.120 Or less than that. Yeah, Well, go on, tell me 0:01:16.160 --> 0:01:20.280 why they're buying Dish Ray slightly negative or meaningfully negative 0:01:20.319 --> 0:01:21.600 amount of money, or they're trying to. 0:01:21.800 --> 0:01:23.200 They are trying, They're trying to. 0:01:23.440 --> 0:01:26.720 So Dish is a company sort of that is an entity, 0:01:26.760 --> 0:01:30.520 but it is owned by Echo Star, Charlie Ergan's satellite conglomerate, 0:01:30.920 --> 0:01:34.440 and so EchoStar wants to sell it to DirecTV. DirecTV 0:01:34.480 --> 0:01:36.960 wants to buy it, but the value of the company 0:01:37.040 --> 0:01:39.640 is apparently somewhat less than its debt. So it has 0:01:39.680 --> 0:01:42.679 like nine point seventy five billion dollars of bonds outstanding, 0:01:43.200 --> 0:01:46.360 and the direct TV doesn't want to pay all those 0:01:46.360 --> 0:01:49.080 bonds back, so it wants to buy it for one dollar, 0:01:49.560 --> 0:01:52.280 you know, a check for one dollar to do Echo 0:01:52.320 --> 0:01:56.040 Star and also for taking on the debt but taking 0:01:56.040 --> 0:01:58.440 on less than all of the debt. And basically to 0:01:58.480 --> 0:02:00.560 get the deal done, the bondholders have to agree to 0:02:00.680 --> 0:02:03.160 a bad haircut, an unpleasant haircut. 0:02:03.440 --> 0:02:06.960 Yeah, so we're talking about one point six billion dollars 0:02:07.000 --> 0:02:08.400 worth of haircutting going on. 0:02:08.600 --> 0:02:10.600 Yeah, so like you know, bond holder dets agree, Like 0:02:10.600 --> 0:02:12.359 they can just insist on getting their money back, but 0:02:12.400 --> 0:02:15.320 if they agree to take one point six billion dollars less, 0:02:15.520 --> 0:02:17.919 so like a total of like eight point two billion dollars, 0:02:18.440 --> 0:02:21.679 then the deal will go through. And if they say no, 0:02:22.200 --> 0:02:25.600 then then technically the deal doesn't have to go through. 0:02:25.639 --> 0:02:28.480 But like everyone understands that this is just the opening 0:02:28.560 --> 0:02:31.360 of negotiations, and so what is happening is that the 0:02:31.400 --> 0:02:34.160 bondholders have said no. And the way it works is 0:02:34.160 --> 0:02:36.800 you kind of get a vote, so, like you know, 0:02:36.840 --> 0:02:38.519 basically you need to get like two thirds of each 0:02:38.720 --> 0:02:42.120 series of bonds to agree, and so some bond holders 0:02:42.160 --> 0:02:45.040 have said that they have accumulated a blocking position, which 0:02:45.080 --> 0:02:47.600 means basically they have enough bonds to prevent the deal 0:02:47.600 --> 0:02:50.399 from going through, and they don't not want the deal 0:02:50.440 --> 0:02:53.040 to go through. This will be a better company that 0:02:53.160 --> 0:02:55.280 is more likely to pay off its debts if it 0:02:55.280 --> 0:02:58.120 gets more money in, and what they want is just 0:02:58.240 --> 0:02:59.079 get less of a haircut. 0:02:59.120 --> 0:02:59.200 Right. 0:02:59.200 --> 0:03:01.560 There's a different series of with different maturities that were 0:03:01.560 --> 0:03:04.520 trading at different market prices, and like the longest dated 0:03:04.520 --> 0:03:06.480 it was trading in like the fifties cents on the 0:03:06.520 --> 0:03:09.840 dollar area, and they are offered to pay it off 0:03:09.880 --> 0:03:13.200 at sixty cents on the dollar, and the vond holders 0:03:13.200 --> 0:03:15.200 were like more than sixty cents on the dollar. So 0:03:15.560 --> 0:03:17.480 that's sort of the state of plays. They've said no, 0:03:17.720 --> 0:03:19.440 but it's like an opening and negotiations. 0:03:19.919 --> 0:03:22.720 They would like a slightly less worse haircut, something that 0:03:22.760 --> 0:03:23.919 doesn't look as bad. 0:03:24.360 --> 0:03:26.880 I'm resisting the temptation to just spend the whole time 0:03:26.919 --> 0:03:30.680 talking about my own history of quests for getting haircuts. 0:03:30.680 --> 0:03:33.440 You know, I cut hair. Yeah, I cut men's hair. 0:03:34.160 --> 0:03:35.600 I cut Oh, that's right, I did know that. 0:03:35.920 --> 0:03:39.960 Yeah, I cut my husband's. Your Instagram if you're cutting 0:03:39.960 --> 0:03:43.640 your husband's, my dad, my brother, and my nephew. My 0:03:43.720 --> 0:03:45.760 nephew has gotten like three haircuts in his life, and 0:03:45.800 --> 0:03:46.680 I've done all of them. 0:03:46.800 --> 0:03:50.240 This is gonna be like the money stuff live event. Yeah. 0:03:50.280 --> 0:03:53.360 Well, actually I love cutting hair. I'm always looking for 0:03:53.400 --> 0:03:57.760 opportunities anyway, So yeah, Bloomberg News. That, of course is 0:03:57.800 --> 0:04:02.080 according to Bloomberg reporting about that locking position. Bloomberg also 0:04:02.120 --> 0:04:05.360 expanded on that in the Brink newsletter, going through the 0:04:05.480 --> 0:04:09.600 various contentions that this group of creditors have. First, they 0:04:09.600 --> 0:04:12.040 contend that they were being asked to take losses as 0:04:12.080 --> 0:04:15.440 high as forty percent of face value. That obviously doesn't 0:04:15.560 --> 0:04:19.440 sound great, While Echo Star owner Charlie Ergan comes out 0:04:19.480 --> 0:04:21.280 relatively unscathed in all of this. 0:04:22.279 --> 0:04:24.360 Yeah, I don't know the full history of it, but 0:04:24.400 --> 0:04:26.839 like obviously you know they're selling it for zero dollars 0:04:26.839 --> 0:04:30.919 of equity value, right, So like it's respecting seniority in 0:04:30.960 --> 0:04:33.560 the sense that the equity is getting nothing, and like 0:04:33.600 --> 0:04:37.520 there's apparently so little value here that in addition to 0:04:37.560 --> 0:04:39.360 the equity hitting nothing, the bond holders have to take 0:04:39.400 --> 0:04:42.640 a haircut in order to sort of sell the asset, right, 0:04:43.000 --> 0:04:44.719 And the fact that the bonds are trading it, you know, 0:04:44.800 --> 0:04:47.040 fifty something sounds on the dollars. Is that you know, 0:04:47.279 --> 0:04:50.479 people did not think there was a ton of equity 0:04:50.560 --> 0:04:53.120 value here before. This deal, isn't nun So Yeah, like 0:04:53.160 --> 0:04:55.120 this is a deal where you look at like the 0:04:55.160 --> 0:04:57.039 trading prices of the bonds and you're like, oh, if 0:04:57.080 --> 0:05:00.920 we can get this asset for the value implied by 0:05:00.920 --> 0:05:03.800 these trading prices and also paying a dollar to the equity, 0:05:03.920 --> 0:05:06.000 then it's a good deal. Right. And then you're like, oh, 0:05:06.040 --> 0:05:07.960 pay a little premium to the values applied by the 0:05:07.960 --> 0:05:11.280 trading prices, and like that's you know, that's like normal MNA, 0:05:11.440 --> 0:05:13.760 except that here, you know, the thing is underwater, and 0:05:13.800 --> 0:05:16.440 so instead of paying off the shareholders. You're paying off 0:05:16.480 --> 0:05:19.480 the bond holders, but you know you're not paying them 0:05:19.520 --> 0:05:21.600 that much of a premium to the trading prices, and 0:05:22.120 --> 0:05:24.480 unlike shareholders, they have a contractual right to demand their 0:05:24.480 --> 0:05:26.640 money back. So it's a it's a fight. 0:05:26.920 --> 0:05:29.599 Well to that point. One of the other contentions is 0:05:29.600 --> 0:05:32.040 that some of them argue, and I'm reading directly from 0:05:32.040 --> 0:05:34.360 the Brink newsletter, some of them argue that the sale 0:05:34.440 --> 0:05:37.320 direct TV for one dollar confirms that the company was 0:05:37.400 --> 0:05:40.920 already insolvent when it completed a contentious deal in January 0:05:40.960 --> 0:05:43.479 to strip them of their collateral. If the company wasn't 0:05:43.480 --> 0:05:45.640 solvent at the time, that transaction could be avoided and 0:05:45.680 --> 0:05:47.120 the whole plan could be called off. 0:05:47.480 --> 0:05:50.520 Yes, but you have like your legal rights, but you 0:05:50.600 --> 0:05:54.440 also have like you know, like if you win those arguments, 0:05:54.480 --> 0:05:57.880 like what the company is into bankruptcy, we won, Like yeah, 0:05:58.000 --> 0:06:01.240 you like there is going to be some intro credit 0:06:01.320 --> 0:06:03.320 or fighting about like you know, who gets the collateral 0:06:03.400 --> 0:06:05.560 or whatever. But like I think in general, you would 0:06:05.680 --> 0:06:09.359 rather have the company be solvent and get paid a 0:06:09.400 --> 0:06:11.760 premium to the market value of the bonds than have 0:06:11.839 --> 0:06:14.520 the company not be solvent and sort of take your chances, 0:06:14.920 --> 0:06:16.320 but you want to get paid a premium to the 0:06:16.360 --> 0:06:18.160 market value of the bonds, and like this premium was 0:06:18.200 --> 0:06:19.960 a little it was a little slim. 0:06:20.040 --> 0:06:23.679 It's interesting that this might be what kills the deal 0:06:23.839 --> 0:06:26.240 because I remember when this was the whole deal. I know, 0:06:26.400 --> 0:06:29.240 but people were talking about regulatory concerns, blah blah blah. 0:06:29.279 --> 0:06:31.239 Wasn't going to get blocked because you remember the history 0:06:31.240 --> 0:06:34.839 of these two companies, DirecTV and Dish. They've been flirting 0:06:34.880 --> 0:06:38.919 with merging for like two decades, and that regulators sued 0:06:39.000 --> 0:06:41.520 in two thousand and two to block a previous attempt 0:06:41.560 --> 0:06:44.960 to combine. Now they're coming back together. It's sort of 0:06:45.200 --> 0:06:48.440 like j Lo and ben Affleck and we know how 0:06:48.480 --> 0:06:50.280 that ended. They recently filed. 0:06:50.000 --> 0:06:52.800 For Direction exactly. Yeah, followed that closely. Ye, I don't know. 0:06:52.839 --> 0:06:54.360 The world has changed in two thousand and two, and 0:06:54.520 --> 0:06:58.640 like the idea of that Dish DirecTV are monopolists in 0:06:58.720 --> 0:07:02.160 the provision of television is a lot less compelling than 0:07:02.160 --> 0:07:04.279 it was twenty years ago, right, I mean, like, who 0:07:04.279 --> 0:07:08.480 has shir DirecTV likes? It's just yeah, streaming has overtaken them, 0:07:08.520 --> 0:07:11.800 and so it is now like these two somewhat troubled 0:07:11.800 --> 0:07:12.960 players are trying to merge. 0:07:13.040 --> 0:07:14.960 Well, that's the thing, Like, what are we fighting over. 0:07:15.160 --> 0:07:19.800 There's some great Bloomberg Intelligence data that shows that together 0:07:19.960 --> 0:07:22.640 Dish and DirecTV have lost sixty three percent of their 0:07:22.640 --> 0:07:26.920 satellite customers since twenty sixteen. Uh, that's according to the companies. 0:07:26.960 --> 0:07:29.480 And then Bloomberg Intelligence says that nearly thirty percent of 0:07:29.520 --> 0:07:32.240 that loss of their user base or six million subscribers, 0:07:32.440 --> 0:07:35.360 has been since the start of twenty twenty two. So, 0:07:35.720 --> 0:07:38.840 I mean it's ugly, Like, this is a tough, tough business, 0:07:38.840 --> 0:07:41.840 and you're right, things have obviously changed dramatically in the 0:07:41.880 --> 0:07:43.280 past twenty two years. 0:07:43.640 --> 0:07:46.160 Right, it's a tough business. And I mean trading for 0:07:46.280 --> 0:07:48.560 lower than the value of the done is maybe something 0:07:48.560 --> 0:07:49.000 to be done. 0:07:49.160 --> 0:07:49.400 Yeah. 0:07:49.520 --> 0:07:51.320 The other thing that's interesting is like, you know, we 0:07:51.400 --> 0:07:54.160 say like direct TV is buying Dish, but like kind 0:07:54.200 --> 0:07:56.760 of what's happening here is TPG is buying both of them, right, 0:07:56.800 --> 0:08:00.720 Like DirecTV is like a AT and T obsidiary that 0:08:00.800 --> 0:08:03.080 like AT and T saw the writing on the wall 0:08:03.120 --> 0:08:07.080 and sold the part of it to TPG, the private 0:08:07.080 --> 0:08:09.280 equity firm, And now as part of this deal, TPG 0:08:09.400 --> 0:08:12.160 is buying the rest of it, and also putting in 0:08:12.200 --> 0:08:15.120 cash directly to finance Dish like before the deal closes, 0:08:15.160 --> 0:08:18.560 and also buying Dish. Right, So this is like going 0:08:18.600 --> 0:08:21.800 from being a big part of two public companies to being, 0:08:22.000 --> 0:08:25.480 you know, a private equity roll up that you know, 0:08:25.640 --> 0:08:28.440 it sort of sounds like that classic private equity playbook 0:08:28.440 --> 0:08:31.360 of like a declining business and like, you know, sort 0:08:31.400 --> 0:08:33.040 of extracting as much money as they can for as 0:08:33.040 --> 0:08:33.680 long as they can. 0:08:34.240 --> 0:08:36.400 Well, I was kind of wondering about the creditor dynamics here, 0:08:36.400 --> 0:08:38.319 and you wrote a bit about this. I was wondering 0:08:38.320 --> 0:08:40.640 if this is like a beautiful moment of like the 0:08:40.679 --> 0:08:43.960 creditors banding together to stop themselves from being screwed. But 0:08:44.000 --> 0:08:46.240 it seems like you're saying that things will get ugly 0:08:46.520 --> 0:08:47.280 between creditors. 0:08:47.360 --> 0:08:51.000 No, they're they're banding together. It's nice. It's like they're 0:08:51.920 --> 0:08:53.360 but like you can't just be like, oh, we want 0:08:53.400 --> 0:08:55.400 a hundred cents on the dog, because like there's some 0:08:55.600 --> 0:08:57.760 risk there. Right. The other thing that I wrote is 0:08:57.800 --> 0:09:00.959 that Charlie Erican clearly has some ability to to put 0:09:00.960 --> 0:09:04.200 it on past creditors, you know. But it is interesting 0:09:04.240 --> 0:09:07.240 to me that this is a private equity roll up. 0:09:07.520 --> 0:09:10.440 What I wrote was that you could have a model 0:09:10.440 --> 0:09:13.599 that is, like important skill set of private equity is 0:09:13.640 --> 0:09:16.760 extracting value from creditors, right like they're repeat players, are 0:09:16.800 --> 0:09:19.840 doing liability management transactions. And if you get good at that, 0:09:20.160 --> 0:09:24.120 then like you can make a troubled company worth more 0:09:24.160 --> 0:09:26.839 than anyone else could because you can, you know, make 0:09:26.920 --> 0:09:29.960 the creditors take back less money. And you know, if 0:09:30.000 --> 0:09:31.600 you own a troubled company, you might be like, well, 0:09:31.600 --> 0:09:33.120 I got to sell this to private equity because they're 0:09:33.120 --> 0:09:35.320 the only people who can kind of extract some value 0:09:35.360 --> 0:09:38.360 from it. Although here, you know, the equity owner got 0:09:38.400 --> 0:09:41.160 one dollar, so it's not that much value for him. 0:09:41.320 --> 0:09:44.960 Watch this space unless you have anything else like that. 0:09:45.000 --> 0:09:47.320 You end every segment with watch space. 0:10:01.760 --> 0:10:06.160 Let's talk about FanDuel and gambling addiction. I really enjoyed 0:10:06.520 --> 0:10:09.480 listening to this or reading the robot from the robot 0:10:09.559 --> 0:10:10.440 told me all about this. 0:10:10.880 --> 0:10:13.880 So there's this guy, I mean Patel. He worked for 0:10:13.880 --> 0:10:16.240 the Jacksonville Jaguars, which is a football team. 0:10:16.360 --> 0:10:18.280 Yeah you might know, uh I heard of. 0:10:18.240 --> 0:10:22.839 Him, and he stole twenty two million dollars from the 0:10:22.920 --> 0:10:26.240 Jaguars to do a bunch of things. He was arrested 0:10:26.280 --> 0:10:28.680 and died. He's in prison right now. He pleaded guilty. 0:10:28.760 --> 0:10:30.800 He did a bunch of things with the twenty two 0:10:30.800 --> 0:10:33.760 million dollars, and the prosecutors of course listed them all. 0:10:33.800 --> 0:10:36.520 He like bought some fancy watches, he like paid for 0:10:37.080 --> 0:10:40.640 trips on private chats with his friends, normal stuff. He 0:10:40.679 --> 0:10:43.240 put some of the money towards a retainer with a 0:10:43.280 --> 0:10:46.160 criminal defense layer, which is an amazing thing to do 0:10:46.520 --> 0:10:48.840 with money that you've stolen. Right, It's like, I know 0:10:48.880 --> 0:10:51.440 I'm gonna get caught. I'm going to hire my criminal 0:10:51.480 --> 0:10:53.800 defense layer in advance so that when I get caught, 0:10:53.800 --> 0:10:55.360 at least they'll have a you know, a well paid 0:10:55.400 --> 0:10:56.240 criminal defense layer. 0:10:56.320 --> 0:10:56.640 Yeah. 0:10:56.800 --> 0:10:59.480 Just amazing, like real indication of his state of mind. 0:10:59.679 --> 0:11:01.360 He was, I'm not like, oh great, I'm commnting the 0:11:01.400 --> 0:11:03.240 perfect crime. And he was like, oh my god, I 0:11:03.280 --> 0:11:04.959 am stealing all this money and. 0:11:04.880 --> 0:11:06.640 I'm going to our own time here. 0:11:06.800 --> 0:11:08.400 So why did he steal all this money even though 0:11:08.400 --> 0:11:09.880 he knew it was a bad idea because he was 0:11:09.880 --> 0:11:11.840 a gambling at it. Because most of the money that 0:11:11.880 --> 0:11:14.000 he stole went not to his lawyers or to watch 0:11:14.080 --> 0:11:16.760 his but to FanDuel I read an article saying that 0:11:16.800 --> 0:11:19.040 he was known as the biggest loser ever on Fandel, 0:11:19.080 --> 0:11:22.480 like he lost the most money and so that was 0:11:22.520 --> 0:11:24.320 bad and he went to prison. And this week the 0:11:24.360 --> 0:11:27.840 news is that he is suing Fandel for letting him 0:11:27.880 --> 0:11:31.920 do that. And I have like a lot of sympathy 0:11:31.960 --> 0:11:33.920 to him. I have no way of handicapping like how 0:11:33.960 --> 0:11:36.520 this lawsuit will go. I think there's like a real 0:11:37.080 --> 0:11:40.160 common reaction of like, come on, man, you stole this money, 0:11:40.280 --> 0:11:43.160 you voluntarily bet it on FanDuel, and now you're suing 0:11:43.160 --> 0:11:45.360 FanDuel for letting you. But I kind of think he's 0:11:45.360 --> 0:11:46.000 got a point. 0:11:46.160 --> 0:11:47.960 What is he suing for? Does he want his stolen 0:11:47.960 --> 0:11:48.480 money back? 0:11:48.640 --> 0:11:51.440 He wants money? Does he want his stolen money back? 0:11:51.920 --> 0:11:55.679 He wants money for like fraud, damages and right and 0:11:55.840 --> 0:11:58.280 like his emotional distress he wants He's suing for more 0:11:58.320 --> 0:12:00.439 than the twenty two million dollars. Yeah, I think the 0:12:00.520 --> 0:12:02.760 number in the lawsuit is like two hundred and fifty millions, 0:12:02.800 --> 0:12:04.520 But like, you know, he's not going to get like 0:12:05.040 --> 0:12:07.240 I think he'd be happy with some money. But yeah, 0:12:07.280 --> 0:12:09.240 I mean there's a bunch of theories, but basically they're 0:12:09.280 --> 0:12:13.440 like you exploited my gambling addiction. And even though you 0:12:13.520 --> 0:12:17.400 had policies to not take money from addicted gamblers, you 0:12:17.480 --> 0:12:19.800 went around those policies. So there's things like you know, 0:12:19.840 --> 0:12:21.439 you had like a vip host, right, Like. 0:12:21.440 --> 0:12:24.280 That was the craziest part to me, the vip host 0:12:24.360 --> 0:12:26.920 that he was texting with. Oh yeah, one hundred texts 0:12:26.960 --> 0:12:27.240 a day. 0:12:27.400 --> 0:12:30.360 Yeah, any casino business, right, Like if you are a whale, 0:12:30.400 --> 0:12:32.280 if you're like gambling a lot of money, they will 0:12:33.120 --> 0:12:34.959 do nice things for you, like he got like tickets 0:12:35.040 --> 0:12:37.240 this morning events and things. But they also have like 0:12:37.280 --> 0:12:40.200 a customer service representative whose job is to make you 0:12:40.240 --> 0:12:42.120 feel special so that you gamble more with them. 0:12:42.360 --> 0:12:45.080 Just so many texts, Like even the height of my 0:12:45.160 --> 0:12:47.360 texting days in like high school, I don't think I 0:12:47.440 --> 0:12:49.280 was exchanging that many text messages. 0:12:49.600 --> 0:12:51.680 Well, I think that a lot of his texts were. 0:12:51.480 --> 0:12:52.920 Like gambling orders. 0:12:52.960 --> 0:12:55.360 At least give me more credit on fanduels so I 0:12:55.360 --> 0:12:56.040 can bet more. 0:12:56.520 --> 0:12:57.200 Just so much. 0:12:57.480 --> 0:12:59.439 Yeah, but like also like the texts were like they 0:12:59.480 --> 0:13:02.120 moved it from the guy's like work account to like 0:13:02.120 --> 0:13:04.560 his personal phone for like the reasons that you know, 0:13:04.600 --> 0:13:06.400 I talk about a lot when the sec goes after. 0:13:06.960 --> 0:13:09.560 You know, it's like easier to avoid compliance when you're 0:13:09.600 --> 0:13:12.080 texting from your personal phone, and like they were doing 0:13:12.160 --> 0:13:14.640 dummy texts, like they're making sure to text from the 0:13:14.640 --> 0:13:17.080 guy's work account like a few times a day, so 0:13:17.120 --> 0:13:19.280 that compliance wasn't like why did you stop texting with 0:13:19.320 --> 0:13:21.480 this guy? Because if compliant saw that, they would know 0:13:21.559 --> 0:13:23.840 he was texting somewhere else. But anyway, so like he 0:13:23.960 --> 0:13:26.000 had this vip host, and the vip host was like 0:13:26.120 --> 0:13:28.120 getting around all of you know, first of all, he 0:13:28.160 --> 0:13:30.199 was doing it from his personal phone, but secondly, he 0:13:30.280 --> 0:13:33.400 was allegedly getting around limitations on how much the credit 0:13:33.440 --> 0:13:36.160 the guy could get. And there's other claims like he 0:13:36.320 --> 0:13:39.160 was doing a lot of gambling with just his Jaguars 0:13:39.400 --> 0:13:44.520 corporate credit card. And fan Duel is sort of regulated 0:13:44.559 --> 0:13:48.000 like a financial stituition. It has anti money laundering requirements, 0:13:48.880 --> 0:13:52.400 and those requirements, you know, they're sort of geared towards 0:13:52.720 --> 0:13:55.960 you should not be taking stolen money. And because he 0:13:56.080 --> 0:13:58.720 was gambling with stolen money, he is now arguing you 0:13:58.760 --> 0:14:01.240 should have known and you probably did know that I 0:14:01.280 --> 0:14:03.280 was gambling with stolen money because I was, for instance, 0:14:03.360 --> 0:14:06.640 using my corporate card to make bets and you should 0:14:06.640 --> 0:14:08.400 have stopped me and I should get the money back 0:14:08.400 --> 0:14:11.480 because you didn't do the anti money laundering and know 0:14:11.559 --> 0:14:13.800 your customer checks. I think it's like a really interesting 0:14:13.920 --> 0:14:19.560 theory that like traditionally, when a bank fails to do 0:14:19.640 --> 0:14:22.480 it's money laundering checks, it will get in trouble with 0:14:22.680 --> 0:14:25.920 the government if it allows a terrorist or a drug 0:14:25.960 --> 0:14:29.040 trafficker to use the payment system. You never hear about 0:14:29.040 --> 0:14:31.240 like the drug trafficker saying, well, you should have to 0:14:31.280 --> 0:14:34.000 give me the money back because you didn't do your 0:14:34.120 --> 0:14:37.400 KYC checks. But here it's like I was doing crimes 0:14:37.440 --> 0:14:39.720 and you didn't check, so I should get the money back. Yeah, 0:14:39.760 --> 0:14:40.360 it's a good theory. 0:14:40.440 --> 0:14:43.040 Okay, so he stole the money from the Jaguars, but 0:14:43.120 --> 0:14:44.880 he was using his Jaguars corporate card. 0:14:45.120 --> 0:14:47.960 That was the theft, Like he would just play plays 0:14:47.960 --> 0:14:49.000 bets with his corporate card. 0:14:49.080 --> 0:14:51.280 I feel like that in and of itself should. 0:14:50.960 --> 0:14:54.120 Be a no no, Like that's what he's saying. 0:14:54.240 --> 0:14:55.840 No, I know, but like the fact that it's a 0:14:55.880 --> 0:14:58.280 sports organization, you know, like it's a. 0:14:58.240 --> 0:15:01.880 Supports right, I believe from it being stolen, I agree 0:15:01.880 --> 0:15:02.480 with that too. 0:15:02.600 --> 0:15:04.720 But like, oh my god, why are we getting millions 0:15:04.760 --> 0:15:07.080 of dollars from a sports place. 0:15:07.160 --> 0:15:09.040 Yeah, yeah, you're right, You're right, that's also bad. 0:15:09.240 --> 0:15:10.040 That's bananas. 0:15:10.160 --> 0:15:10.720 I agree with you. 0:15:10.880 --> 0:15:14.160 Yeah, I do. Wonder so as you write about, of 0:15:14.160 --> 0:15:17.040 course this is good business for FanDuel. 0:15:17.160 --> 0:15:19.720 I mean, the biggest ever loser on Fendel is you know, yeah, 0:15:19.840 --> 0:15:21.800 like twenty million dollars to Fendel. 0:15:21.920 --> 0:15:24.720 But like, how many of him are there? I'm wondering. 0:15:24.760 --> 0:15:28.080 I wonder how many cases like this this man there are, 0:15:28.400 --> 0:15:30.440 maybe to lesser extent. 0:15:30.120 --> 0:15:33.360 But I think it's a really it's a really dicey business, 0:15:33.440 --> 0:15:36.880 right because like there are clearly people who are billionaires 0:15:36.960 --> 0:15:40.000 who like a gamble, who will lose a million dollars 0:15:40.400 --> 0:15:42.200 in a week and be like, yeah, that was fun 0:15:42.440 --> 0:15:44.520 and it's fine, And like those are the best customers, right, Like, 0:15:44.520 --> 0:15:46.040 those are the customers who can lose a lot of 0:15:46.120 --> 0:15:48.080 money and not feel it are great. There's not that 0:15:48.160 --> 0:15:50.720 many of them. Then they're the customers who lose a 0:15:50.720 --> 0:15:52.720 lot of money and can't really afford to lose a 0:15:52.720 --> 0:15:55.440 lot of money. And like, you know, all these sports 0:15:55.480 --> 0:15:59.800 books have policies about safe gambling, and you know, they're 0:16:00.200 --> 0:16:02.560 regulated business, and they don't want to look like they 0:16:02.600 --> 0:16:07.560 are exploiting addicted gamblers, but clearly they make money by 0:16:07.560 --> 0:16:09.720 people losing money, and the more money people lose, the 0:16:09.720 --> 0:16:13.000 more money they make. And not all of those people 0:16:13.040 --> 0:16:15.200 can afford to lose the money that they lose. And 0:16:15.240 --> 0:16:17.960 I've written about there's a subset of sports gamblers who 0:16:17.960 --> 0:16:23.239 are advantage gamblers, who win right, who can identify exploitable 0:16:23.360 --> 0:16:25.760 bets and make money at the expense of sports books, 0:16:26.200 --> 0:16:30.440 and those people their problem is that sportsbooks don't like 0:16:30.480 --> 0:16:32.720 them and won't let them bet very much. And so 0:16:33.640 --> 0:16:36.160 a lot of the business of being a professional sports 0:16:36.200 --> 0:16:40.000 gambler is not knowing who will win, but it's knowing 0:16:40.040 --> 0:16:42.760 how to bet a lot of money at a sports book. 0:16:43.080 --> 0:16:45.320 And there are stories about how people do it, and 0:16:45.320 --> 0:16:46.720 one thing they do is they try to look like 0:16:46.760 --> 0:16:49.520 addicted gamblers because that's what the sportsbook wants. So there's 0:16:49.560 --> 0:16:52.080 a story of like a guy who has a bot 0:16:52.160 --> 0:16:55.400 log into his sportsbook account every night between two and 0:16:55.440 --> 0:17:01.080 four am, because that just looks desperate. If you look desperate, 0:17:01.080 --> 0:17:02.960 they're like, oh, this guy's an addict, so we'll give 0:17:03.040 --> 0:17:05.840 him more credit. And like he seems to think that 0:17:05.840 --> 0:17:08.399 that works, right, so there's like this real tension where 0:17:09.520 --> 0:17:12.680 these companies really do not want to look like they're 0:17:12.720 --> 0:17:15.479 exploiting addicted gamblers, but like that is where the money is. 0:17:15.880 --> 0:17:17.960 Reading this and thinking about it kind of made me 0:17:18.000 --> 0:17:21.880 think about, you know, the conversations around robin Hood when 0:17:21.880 --> 0:17:24.600 the memestock era was really in full swing. Of course, 0:17:24.680 --> 0:17:27.800 like yeah, like what is the responsibility of like Robinhood 0:17:27.800 --> 0:17:30.920 to make sure people aren't trading more than they can 0:17:30.960 --> 0:17:33.760 afford to lose? And there, of course are tragic stories 0:17:33.760 --> 0:17:34.200 about that. 0:17:34.760 --> 0:17:37.120 Yeah, and robin Hood will tell you that they are, 0:17:37.200 --> 0:17:38.440 and I think there's a lot of truth to this, 0:17:38.680 --> 0:17:42.400 that they are sort of a gateway drug to sensible 0:17:42.440 --> 0:17:44.960 four O and K investing, Right, Like, you come to 0:17:45.040 --> 0:17:47.520 Robinhood because it's fun, and then like it's not being 0:17:47.600 --> 0:17:49.560 that fun, and like I'll just put it in like 0:17:49.640 --> 0:17:50.399 an SMP. 0:17:50.359 --> 0:17:53.080 Index fund you like graduate up, you just like get. 0:17:52.960 --> 0:17:55.119 Bored of like day trading GameStop and you put it 0:17:55.240 --> 0:17:57.439 money into an SMP fun That seems plausible to me. 0:17:58.119 --> 0:18:02.159 You're like, man, why does this stock keep beating me? 0:18:02.440 --> 0:18:06.239 Right? So, like I think there's some plausibility of that. 0:18:06.760 --> 0:18:10.000 At the same time, like you look at how robin 0:18:10.000 --> 0:18:12.560 Hood makes money. They make a lot of money on options, right, Yeah, 0:18:12.640 --> 0:18:14.960 like a lot of money on options. It's hard to 0:18:15.080 --> 0:18:18.480 argue that like a lot of retail traders are responsibly 0:18:18.560 --> 0:18:21.800 saving for retirement by day trading options. But that's where 0:18:21.840 --> 0:18:24.879 the money is for these firms. I will say I 0:18:24.920 --> 0:18:30.199