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Speaker 1: Pushkin. Hello, Hello, Revisionist History listeners. Malcolm here, I'm stopping

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Speaker 1: by near the end of my book tour because I

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Speaker 1: have a special guest in the house, Michael Lewis. You

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Speaker 1: may know him as the author of Moneyball, The Big Short,

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Speaker 1: Liar's Poker, and most recently Going Infinite, which just came

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Speaker 1: out in paperback, by the way, or you may know

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Speaker 1: him by his alter identity as a Pushkin SuperHost. Michael's

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Speaker 1: show Against the Rules is now in the middle of

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Speaker 1: a fantastic new season. It's all about the insane rise

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Speaker 1: and the consequences of sports betting in the US. You're

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Speaker 1: going to get a chance to hear one of the

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Speaker 1: latest episodes in just a moment, But first I thought

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Speaker 1: we would chat with the man himself. Michael Lewis. Welcome

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Speaker 1: to Revisionist History.

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Speaker 2: It's been too long. Yes, I haven't seen you in ages.

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Speaker 1: I know, I know we need to write that wrong.

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Speaker 1: So you've done this show about uh, sports betting, and

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Speaker 1: this comes after what your first one was about referees

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Speaker 1: and then coaching right experts.

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Speaker 3: We sort of set them all into the sports arena

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Speaker 3: and this is yeah, you know, we frame this as

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Speaker 3: fans and it's sort of like the fracking of the

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Speaker 3: fan how the sports leagues have decided to squeeze ever

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Speaker 3: more juice out of the fan base. And and and

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Speaker 3: you know, six years ago, the Supreme Court UH repealed

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Speaker 3: a federal ban on sports gambling. And at that time,

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Speaker 3: the NFL, the NBA, Major League Baseball, the NC double A,

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Speaker 3: We're all saying sports betting is evil. You know that,

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Speaker 3: it's just like it will it will destroy the integery

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Speaker 3: of sports, et cetera, et cetera. And there's long be

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Speaker 3: this taboo in the sports world about gambling. I mean,

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Speaker 3: not even gambling on your own sport. If you've caught

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Speaker 3: sports gambling, people have been tossed out of sports and

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Speaker 3: they flipped on a dime. And and essentially when into

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Speaker 3: business with the sports gambling industry, and particularly fan duel

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Speaker 3: and DraftKings to the two sort of big companies at

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Speaker 3: the center of this world. And there's this kind of

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Speaker 3: sports gambling industrial complex that has arisen in the last

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Speaker 3: few years. And it's really interesting. It's like, so past

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Speaker 3: the past seasons, I've loved doing the podcast. You are

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Speaker 3: responsible for me doing the podcast, So I mean, you

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Speaker 3: kind of talked me into this, and I love that.

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Speaker 3: I love the way it works kind of different muscles,

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Speaker 3: and when you're writing these scripts, it's a different thing

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Speaker 3: than writing the books, and I like it for all

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Speaker 3: kinds of reasons. But up to up till now, we've

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Speaker 3: taken themes. This season is whatever, seven episodes, and it's

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Speaker 3: it's it's variations on a theme, but it isn't one story.

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Speaker 2: And in this case, this could be a book.

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Speaker 3: It's like almost plotted like a book, and it's it's

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Speaker 3: about this vast social experiment that's going on that's largely

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Speaker 3: invisible because the consequences are sort of you know, you

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Speaker 3: don't see it the way you see on an opioid

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Speaker 3: addiction or alcohol addiction. You're seeing this thing that historically

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Speaker 3: regarded as a vice, understood to be kind of risky behavior,

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Speaker 3: being foisted upon the American people, especially young American males,

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Speaker 3: in a way that would have.

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Speaker 2: Been unthinkable a decade ago.

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Speaker 3: And so like how this is happening, how the industry works,

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Speaker 3: with the economics of the industry, are where this is

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Speaker 3: going and the effects it's having on We're talking to

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Speaker 3: everybody from athletes to high school students who are creating

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Speaker 3: sports gambling rings in their high school and like, ultimately,

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Speaker 3: how to defend yourself because the industry's coming for you

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Speaker 3: or your children.

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Speaker 2: It's sort of.

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Speaker 3: Finally calibrated to exploit all of your mental weaknesses, finally

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Speaker 3: calibrated to get you do the stupidest things you could

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Speaker 3: possibly do.

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Speaker 2: In a casino.

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Speaker 1: I'm just curious about how you settled on this particular topic.

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Speaker 1: When did you when was sports gambling? So w did

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Speaker 1: you start buzzing around your head?

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Speaker 3: Well? Completely honest, it was buzzing around my head because

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Speaker 3: you can't avoid it. Right, even in California, sports gain

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Speaker 3: is still illegal. It's legal in thirty nine states. California's

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Speaker 3: not one of them. Soon will be one of them probably.

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Speaker 3: But even in spite of that, living in California, four

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Speaker 3: years ago, I started getting bombarded with ads by from

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Speaker 3: DraftKings and Fando telling me to bet on sports and

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Speaker 3: they'll commentary around sports.

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Speaker 2: It completely changed. So it caught my attention then.

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Speaker 3: But it was our brilliant producers who came and said,

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Speaker 3: you know, what do you think about this as a subject,

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Speaker 3: and instily went yes, yes, like yes that it just

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Speaker 3: hasn't quite been done sometimes the best stories are things

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Speaker 3: that no one ever thought about.

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Speaker 2: Some of the best stories is just like what's under

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Speaker 2: your nose that no one's really noticed and sight hiding

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Speaker 2: in plain sight.

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Speaker 3: The more we dug into it, the more shocking it was.

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Speaker 3: Just how predatory it is, how the as a business.

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Speaker 3: FanDuel and DraftKings, the two companies at the center of

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Speaker 3: the of the industry. They're they're framed in the public

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Speaker 3: mind it's always just fun, it's gaming or whatever. It's

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Speaker 3: maybe like a casino. It's not at all like a casino.

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Speaker 3: These are businesses that really haven't ever existed before. It's

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Speaker 3: casinos with unbelievable amounts of data about the gamblers, an

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Speaker 3: incredible ability to nudge the gamblers into ever and ever.

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Speaker 2: Stupid things, and it's in your pocket. It was a

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Speaker 2: combination of that that.

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Speaker 3: Kind of dragged me into it, and it was also

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Speaker 3: just like the whole sports gambling is as an activity,

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Speaker 3: It's more interesting to me than casino gambling or even blackjack.

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Speaker 3: We spent the time with sports gamblers, pro the very

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Speaker 3: best sports gamblers who beat the house, and they're doing

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Speaker 3: stuff very like what the Oakland A's front office did

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Speaker 3: back in the late nineties and early two thousands where

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Speaker 3: they were they're doing an fresh analysis of this sports

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Speaker 3: to glean fresh insights that the market, you know, is

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Speaker 3: sort of oblivious to, so that they get an edge.

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Speaker 3: And that's interesting to me. It's like, at the same time,

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Speaker 3: the corporate side of it is kind of dark and gross,

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Speaker 3: the gambling side of it is kind of fun and

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Speaker 3: interesting for the people who know what they're doing.

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Speaker 1: I've been struck by how much the sports gambling has

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Speaker 1: has infected our world podcasting. I mean, sports podcasts have

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Speaker 1: turned into sports gambling podcasts.

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Speaker 2: You got it.

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Speaker 1: I mean I listened. I spent many, many hours of

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Speaker 1: my life listening to Bill Simmons. But it's like all

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Speaker 1: he mentions FanDuel in every second paragraph.

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Speaker 3: They've rained so much money on media that there's just

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Speaker 3: not much blowback. There's a huge financial disincentive to doing

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Speaker 3: the story. Like first question your business people ask me

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Speaker 3: is can we take fan Duel and DraftKings money and

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Speaker 3: very much not in your spirit? I said no, Now, I.

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Speaker 4: Know you need very much not in spirit because you

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Speaker 4: were so because you were so good at plowing right

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Speaker 4: through the ordinary ethical objections in getting that and getting

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Speaker 4: to the cash.

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Speaker 2: It's so true.

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Speaker 1: It's so true, isn't true? You know we got mouse

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Speaker 1: safe to hear at Pushkin you do.

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Speaker 3: You're a responsible parent and you're generating the income for

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Speaker 3: the family. But I'm kind of off to I'm just

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Speaker 3: I'm winging that off to the side of your operation.

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Speaker 3: And I just said, no, it's pretty clear that we've

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Speaker 3: got to be completely free of the taint of their money.

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Speaker 3: These two companies in the last five years have spent

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Speaker 3: something like two billion dollars each on marketing, and a

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Speaker 3: lot it ends up in the pockets of sports work.

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Speaker 1: Yes, they're billion two billion. Yes, that's like General Motors level.

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Speaker 3: They We had someone who I think is the trust

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Speaker 3: is Ors tell us that they're the biggest advertisers in America.

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Speaker 2: They're bigger than the beer They're bigger than the car companies.

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Speaker 3: And that isn't actually surprising anybody who watches sports.

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Speaker 2: It's like every other ad is.

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Speaker 3: An afrodamblin and and and beyond beyond that. Like the announcers,

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Speaker 3: not just Bill Simmons, the announcers during the games are

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Speaker 3: framing all their commentary around their bets, and their bets

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Speaker 3: that they make are are encouraging or sort of suggesting

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Speaker 3: to the audience they might make. Two are are precisely

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Speaker 3: the stupidest bets you can make, and the bets that

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Speaker 3: maximize the profits of the companies, like it's it's it's

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Speaker 3: long shot bets, it's parlay bets. Uh yes, and what

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Speaker 3: it's taking advantage of We haven't quite got to this

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Speaker 3: the last.

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Speaker 2: I don't want to burn the season on your podcast.

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Speaker 3: But the human mind makes all kinds of mistake, that's

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Speaker 3: when it's placed in conditions of uncertainty. And one routine

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Speaker 3: mistake it makes is that when it's given long odds,

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Speaker 3: it starts to cease to make distinctions. So if someone

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Speaker 3: offers you forty to one odds on some parlay bet

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Speaker 3: or twenty to one odds, you think, wow, I get

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Speaker 3: twenty dollars for everyone I put up, and you don't

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Speaker 3: stop and to realize that actually the true odds or

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Speaker 3: something like one hundred to one.

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Speaker 1: You mean, because you're betting on a series of long

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Speaker 1: shots and you have to multiply out, yes, the odds.

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Speaker 2: Well don't get right.

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Speaker 3: Yes, people don't do exponentials very well, and the mind

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Speaker 3: is sloppy when when you're starting to present people with

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Speaker 3: long shot bets.

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Speaker 2: That's why people play the lottery.

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Speaker 3: They've been kind of grooming the American gambler to move

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Speaker 3: away from oh, just betting on the taking the chiefs

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Speaker 3: and giving up the points to these bets where the

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Speaker 3: house take is multiples of what a casino takes for

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Speaker 3: its for casino games. As a result, the two companies

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Speaker 3: that they're both listed companies, well DraftKings has listed DraftKings

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Speaker 3: FanDuel is owned by what's holy companies.

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Speaker 2: Called flutter.

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Speaker 3: All of Wall Street basically got them wrong the minute

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Speaker 3: they ran up as companies. The stocks ran up in

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Speaker 3: the wake of the legalization of sports gaming, and everybody

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Speaker 3: came up and said, oh, they're inflated short them, and

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Speaker 3: they crashed temporarily. It's like the Land of twenty twenty

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Speaker 3: one because everyone's sort of looking at them as standard

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Speaker 3: casino businesses, and they knew what the take was for

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Speaker 3: standard casinos, and they could kind of guess with the

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Speaker 3: handle was going to be, what the betting volume was

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Speaker 3: going to be, and they did the casino math and

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Speaker 3: they said, this doesn't justify the stock price. In fact,

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Speaker 3: the take is multiples of what casinos and is growing

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Speaker 3: the margins.

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Speaker 2: And a way to think about it is it's sort

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Speaker 2: of like.

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Speaker 3: Exploiting their ability to get people to do dumber and

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Speaker 3: dumber things. And I think I think it's going to happen.

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Speaker 3: Our podcast is going to be a part of this.

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Speaker 3: The way to address this is to make it clear

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Speaker 3: that anybody who is a VIP of Fan Duel or

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Speaker 3: DraftKings or one of these fourths gaming apps, or anybody

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Speaker 3: who even kind of does it a lot, is like

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Speaker 3: someone who's who's almost certainly making dumb bets because they

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Speaker 3: are on the other side of this. The gaming apps

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Speaker 3: are really good at figuring out who's a smart better

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Speaker 3: and kicking them out. If you know what you're doing,

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Speaker 3: if you're the equivalent of the card counter, if you

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Speaker 3: actually figured out something about football that nobody has realized before,

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Speaker 3: and you've got a systematic edge, very very quickly, they

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Speaker 3: figure it out and they get rid of you.

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Speaker 1: So in a way they could do that. I never

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Speaker 1: understood this. You know a lot, if I walk into

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Speaker 1: a store, they can't kick me out. You know, there's

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Speaker 1: isn't there a whole kind.

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Speaker 3: Of you would think you would think their analogy that

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Speaker 3: they want to draw it is it's like the card

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Speaker 3: counter coming into the casino. We can throw out that

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Speaker 3: we don't We don't have to service the card counter

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Speaker 3: at the blackjack table.

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Speaker 2: I don't want to ruin the whole show.

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Speaker 3: But our producer took an enormous pile of cash with

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Speaker 3: smart betting ideas and it took her moments to get

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Speaker 3: chucked out. A poor lidiageing cot has been banned by

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Speaker 3: every sports betting So yeah, because and the way, it's

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Speaker 3: a very simple way how they identify that you are smart.

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Speaker 3: If the line moves in your favor after you've made

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Speaker 3: the bet systematically you knew something is basically were saying

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Speaker 3: the odds, the odds will drift to the true odds,

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Speaker 3: and if you were ahead.

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Speaker 2: Of the market, they don't want you.

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Speaker 3: And so, but the part of parint is that And

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Speaker 3: I said this to an audience of money managers not

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Speaker 3: that long ago. They're asking me like, do you have

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Speaker 3: any tips to how to identify a good money manager?

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Speaker 3: And I said, well, there's a new one now available.

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Speaker 3: Before you let someone manage your money, you had to

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Speaker 3: ask them if they if they have ac council fando

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Speaker 3: and DraftKings and their sports betters, and like what's their

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Speaker 3: relationship with those enterprises And if they say.

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Speaker 2: Man, I'm like a VIP or I do it all

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Speaker 2: the time, or I.

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Speaker 3: Don't give them your money to invest, like they are

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Speaker 3: identifying people who should not be professional investors.

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Speaker 1: Michael, can you describe the the tell me a little

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Speaker 1: bit about the episode we're about to hear it.

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Speaker 2: So this is the episode where we're the main character

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Speaker 2: is Rufus Peabody, who is one of America's great sports betters.

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Speaker 1: And by the way, did you make up that name?

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Speaker 2: No? No, I don't.

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Speaker 1: It's like that is like if I had to imagine

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Speaker 1: the name that Michael Lewis would make up for his

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Speaker 1: lead character, it would be Rufus Peabody.

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Speaker 3: I told Rufus Peabody when I met him that if

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Speaker 3: my name was Rufus Peabody and Michael Lewis, I'd be

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Speaker 3: worth three times when I'm worth that.

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Speaker 2: It's are you kidding me? Yeah, it would be totally.

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Speaker 3: It's wasted on sports better it should it should be

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Speaker 3: it should be an author. Rufus was in he's still

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Speaker 3: young Yale class of two thousand and nine or whatever.

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Speaker 3: He is the leading kind of smart edge of gambling.

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Speaker 3: But he was present before legalization. He was present in

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Speaker 3: the markets back when Vegas was the market. We traveled

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Speaker 3: with him to the point where his bets are no

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Speaker 3: longer accepted. What interested me about him and his mentor

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Speaker 3: is also a big character in the in the episode

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Speaker 3: Roxy Roxboro a legend in the old Vegas sport.

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Speaker 2: I know, I know, I know. And what your love

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Speaker 2: about Roxy is? He's Canadian? He's can Michael.

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Speaker 1: Did we know we have two Improbably we now have

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Speaker 1: a parlay of improbably perfect names.

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Speaker 3: You're gonna love listening to them. They're wonderful, they have

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Speaker 3: a lot to say. They're very smart people. I just thought,

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Speaker 3: what is the most interesting point of view on this market?

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Speaker 3: And it was, obviously it was the point of view

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Speaker 3: of the sharp the edge player, the person who's beaten

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Speaker 3: the market. It's like, who's the most interesting person to

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Speaker 3: talk to about a casino? Either the person actually running

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Speaker 3: the casino or is the card counter, or the person

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Speaker 3: who's figured out how the slots are rigged, or who's

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Speaker 3: seen that the roulette wheel is slightly off. It's someone

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Speaker 3: who is looking at the market from a superior kind

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Speaker 3: of vantage point. So it's walking us into this new

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Speaker 3: market through the eyes of an edge player.

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Speaker 1: You have the one thing that has distinguished you throughout

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Speaker 1: your career is I feel like no one has his

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Speaker 1: finger closer to the pulse than you. You've done it repeatedly,

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Speaker 1: and it sounds like you've done it again.

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Speaker 2: It's a gas of a season.

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Speaker 1: Michael Lewis is host of Against the Rules right here

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Speaker 1: at Pushkin. Here's his latest episode, A Hard Way to

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Speaker 1: Make an Easy Living. Give it a listen and head

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Speaker 1: over to Against the Rules and subscribe to hear more.

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Speaker 1: Thank you, Michael, Thank you, Malcolm.

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Speaker 5: Oh yay, oh yay, oh yay.

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Speaker 3: May twenty eighteen, the United States Supreme Court strikes down

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Speaker 3: the federal law that has effectively banned sports gambling in

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Speaker 3: nearly every state. What happens next happens faster than anyone imagined.

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Speaker 3: It happens in so many places at once that it's

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Speaker 3: basically impossible to follow it.

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Speaker 2: All in real time.

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Speaker 6: I ended up picking Mississippi and Kansas as the two

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Speaker 6: states that I really decided to focus on and merely

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Speaker 6: was just there becoming a part of the furniture. As

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Speaker 6: the lobbyists were working their magic.

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Speaker 3: That's Eric Lipton, New York Times reporter, who with his

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Speaker 3: colleague Ken Vogel, just sat and watched as lobbyists created

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Speaker 3: the conditions for a new industry to emerge overnight sports.

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Speaker 6: Gambling and buttonholing various legislators, getting them to introduce language

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Speaker 6: that they wanted into the gambling bills and changing the

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Speaker 6: tax rates, getting provisions included that would allow them to

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Speaker 6: entice betters with free bets that they wouldn't have to

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Speaker 6: pay taxes on.

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Speaker 3: Derek knows that state capitals where the action is. He

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Speaker 3: started his career covering state governments for local papers. When

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Speaker 3: he returns to his old beat, he sees right away

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Speaker 3: how much lonelier state capitals are because his old job,

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Speaker 3: state House reporter, now barely exists.

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Speaker 6: There were times when I was in the state capitol

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Speaker 6: where I was pretty much the only reporter there while

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Speaker 6: they were debating sports betting, and I would stay until

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Speaker 6: they wrapped up two in the morning, as the session

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Speaker 6: was closing and they were trying to get the bill

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Speaker 6: passed and there were no other reporters present.

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Speaker 3: It's like, if you do something at the federal level,

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Speaker 3: there'res going to be a lot of people watching, still

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Speaker 3: a lot of reporters who will cover national politics. But

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Speaker 3: if you push things down to the states, you're more

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Speaker 3: likely to just operate in the shadows.

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Speaker 2: Yeah, and I think the lobbyists know that.

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Speaker 6: And it's actually a lot easier to get things done

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Speaker 6: in state capitals. You can build a national strategy through

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Speaker 6: a collection of states.

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Speaker 3: Eric and his colleague at the Times wrote about Kansas

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Speaker 3: back in twenty twenty two, but he could have written

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Speaker 3: the same piece almost anywhere. In the United States. Thirty

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Speaker 3: eight states plus Washington, d c. Were rushed to legalize

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Speaker 3: sports betting and rolling over for the new sports bookies

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Speaker 3: who were pushing to minimize just how much of a

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Speaker 3: cut the states took.

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Speaker 2: They cut the tax rate almost in a half.

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Speaker 6: They gave them the ability to give out free bets

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Speaker 6: as a promotion to sign people up and not have

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Speaker 6: to pay taxes on that. So essentially the state becomes

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Speaker 6: a lost leader promoter of getting people into gambling by

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Speaker 6: giving them tax free promotions.

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Speaker 3: And without a whole lot of pushback from anyone.

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Speaker 6: Oftentimes the legislators weren't even aware that they were passing

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Speaker 6: these things, or they were it was sent it was

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Speaker 6: given to them at the last minute, just before they

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Speaker 6: were asked to vote on it, and they weren't even

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Speaker 6: fully informed as to what they were voting on.

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Speaker 3: Overnight, the States have gone from the bookies cop to

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Speaker 3: the bookies' partner. So of all the pro sports leagues,

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Speaker 3: the NFL, the NBA, and Major League Baseball, the entire

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Speaker 3: sports industrial complex now has a stake in the revenues

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Speaker 3: that flow into sports gambling companies like DraftKings and Fan Duel.

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Speaker 3: There's now a vast new machine with one clear purpose

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Speaker 3: to maximize those revenues by maximizing the number of bets

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Speaker 3: that Americans make on sports. A sports sequinox is coming

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Speaker 3: for sports one one contest that's free to the FANDUS

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Speaker 3: sports econts frequently comtes. It's as if when prohibition ended,

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Speaker 3: there were these two massive liquor companies sitting there with

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Speaker 3: databases on individual Americans and their tastes for alcohol, and

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Speaker 3: the government ordered them to go wave a glass of

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Speaker 3: whiskey under the nose of every alcoholic to persuade as

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Speaker 3: many as possible to start drinking again. Of course, there

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Speaker 3: are some restraints, some rules. No state has allowed small

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Speaker 3: children to gamble on sports. Eight have declined to allow

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Speaker 3: people to gamble on their phones, and the taxes that

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Speaker 3: the new industry pays varies a lot from state to state.

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Speaker 3: New York takes fifty one percent of all sportsbook revenues.

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Speaker 3: Indiana takes only nine and a half percent. In twenty seventeen,

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Speaker 3: the year before the Supreme Court struck down a federal

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Speaker 3: log inst sports betting, legal sports bookies in the United

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Speaker 3: States generated roughly three hundred million dollars in revenues. In

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Speaker 3: twenty twenty three, they took in eleven billion. In twenty seventeen,

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Speaker 3: Americans made roughly five billion dollars in legal sports bets.

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Speaker 3: Last year, they laid down more than one hundred and

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Speaker 3: twenty billion. The numbers are crazy, the consequences are even

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Speaker 3: more so, and will be exploring them for the rest

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Speaker 3: of the season. Take your shot at more than two

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Speaker 3: hundred and seventy thousand dollars in payouts. That's a lot

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Speaker 3: of money. I'm Michael Lewis, and this is Against the Rules,

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Speaker 3: a show where we look at specific roles in American

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Speaker 3: life and how they're changing.

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Speaker 2: The fans.

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Speaker 3: Roles changing because a powerful new machine has sprung up

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Speaker 3: to encourage the fan to gamble on sports. Sports gambling

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Speaker 3: has never been just a simple and straightforward marketplace. It's

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Speaker 3: more like a jungle, and DraftKings and fandueler are like

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Speaker 3: this invasive species that's been dropped into it by accident.

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Speaker 3: They've disrupted the food chain and overrun the habitat because

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Speaker 3: they feed so efficiently on fan emotion, and fan emotion

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Speaker 3: is the jungle's greatest food source. But they're also vulnerable

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Speaker 3: to a creature that feeds on them. Let's recall for

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Speaker 3: a minute what sports gambling once was in America by

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Speaker 3: listening to just a snippet of a press conference held

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Speaker 3: back in nineteen sixty one by then Attorney General Robert F.

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Speaker 2: Kennedy.

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Speaker 5: The report has been since the passage of the legislation,

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Speaker 5: and that's big time gambling by the big time operators

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Speaker 5: has been materially decreased since the passage of the legislation.

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Speaker 3: Kennedy celebrating a new law called the Federal Wire Act.

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Speaker 3: The point of the law was to cut the legs

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Speaker 3: from under the mafia by shutting down it's sports gambling operations.

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Speaker 3: By giving the federal government the power to arrest and

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Speaker 3: prosecute anyone who booked a sports bet over any phone

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Speaker 3: or telegraph wire that crossed state lines.

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Speaker 5: And in fact, the head of the Royal Mounted Police

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Speaker 5: in Canada said in the speech last week that Canada

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Speaker 5: will now have to pass legislation and take new steps

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Speaker 5: because many of the big time gangsters and ulums of

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Speaker 5: the United States are now moving to Canada because of

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Speaker 5: the drive that has been made against them here in

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Speaker 5: this country.

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Speaker 3: When you think of Canada, this isn't the first thing

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Speaker 3: that pops into your head, happy refuge for big time

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Speaker 3: gangsters and sports gamblers. But I don't know a different era.

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Speaker 7: I always had an interest in sports. My father coached

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Speaker 7: me in swimming and coached me in tennis. But my

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Speaker 7: world changed when I found out you could gamble on it.

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Speaker 7: I became no longer a fan, and I became interested

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Speaker 7: in gambling.

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Speaker 3: That's Michael Roxborough. Everyone just calls him Roxy now. He

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Speaker 3: grew up in the nineteen fifties in Canada in a nice,

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Speaker 3: upper middle class family. He's now zooming with me from

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Speaker 3: a home in rural Thailand with the ac blasting in

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00:23:39,036 --> 00:23:42,596
Speaker 3: the background and a straw fedora on his head, and

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Speaker 3: the emotional feel of a man in a witness protection program,

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Speaker 3: a placeless man. But he really did grow up in Canada.

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Speaker 3: When Roxy was a kid, there was a sports gambling market.

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Speaker 3: It was smaller and more constrained than it is now,

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Speaker 3: but very real, and its center was the pool halls

437
00:23:59,276 --> 00:24:01,036
Speaker 3: of Vancouver, British Columbia.

438
00:24:01,916 --> 00:24:04,676
Speaker 7: If you envision in the movie The Hustler, if you

439
00:24:04,716 --> 00:24:07,756
Speaker 7: take a look at the pool rooms of that day.

440
00:24:07,796 --> 00:24:10,116
Speaker 2: Those were the poolroom. Those were the pool rooms of

441
00:24:10,156 --> 00:24:10,596
Speaker 2: my day.

442
00:24:12,796 --> 00:24:14,356
Speaker 8: It was just full.

443
00:24:14,156 --> 00:24:22,796
Speaker 9: Of wannabes, desperadoes, hustlers, drug dealers, bookmakers, everybody that was

444
00:24:23,956 --> 00:24:25,476
Speaker 9: operating outside the law.

445
00:24:25,876 --> 00:24:28,676
Speaker 3: When you got the bug. What's your parents think about it?

446
00:24:29,436 --> 00:24:34,036
Speaker 7: Not too happy. My father was a Harvard MBA and

447
00:24:34,156 --> 00:24:38,396
Speaker 7: my mother was a high school valedictorian, and I think

448
00:24:38,396 --> 00:24:39,956
Speaker 7: they had higher aspirations.

449
00:24:41,116 --> 00:24:43,516
Speaker 3: Roxy's dad wanted him to go to Dartmouth and he

450
00:24:43,596 --> 00:24:46,596
Speaker 3: got in, but he went to American University in DC

451
00:24:47,236 --> 00:24:49,236
Speaker 3: because he sensed the action was better there.

452
00:24:50,076 --> 00:24:55,036
Speaker 7: I ran a blackjack game in the American University dorm

453
00:24:55,196 --> 00:24:58,116
Speaker 7: at night, and that's what's the source of most of

454
00:24:58,156 --> 00:25:01,516
Speaker 7: my profits. But then I got kicked out for what

455
00:25:02,676 --> 00:25:04,076
Speaker 7: for running that blackjack game.

456
00:25:05,476 --> 00:25:08,436
Speaker 3: Roxy never did finish college. Instead, he went back to Canada,

457
00:25:09,116 --> 00:25:12,396
Speaker 3: caled in and out of boring jobs, but never stopped gambling.

458
00:25:13,076 --> 00:25:15,476
Speaker 3: And then he finally caught a big break by reading

459
00:25:15,476 --> 00:25:15,876
Speaker 3: a book.

460
00:25:16,716 --> 00:25:19,716
Speaker 7: I was in a Reno airport flying back to Vancouver

461
00:25:21,036 --> 00:25:24,436
Speaker 7: and I picked up a copy of Ed Thorpe's Beat

462
00:25:24,476 --> 00:25:24,996
Speaker 7: the Dealer.

463
00:25:25,836 --> 00:25:27,956
Speaker 3: Beat the Dealer was the first book to show how

464
00:25:27,956 --> 00:25:31,316
Speaker 3: a gambler inside a casino could have a systematic edge

465
00:25:31,916 --> 00:25:35,756
Speaker 3: by counting cards in blackjack. The other casino games, like

466
00:25:35,796 --> 00:25:38,716
Speaker 3: slots and roulette, were more or less perfectly rigged against

467
00:25:38,716 --> 00:25:41,636
Speaker 3: the gambler. Anyone who played them for long enough was

468
00:25:41,676 --> 00:25:46,116
Speaker 3: sure to lose. Blackjack was an exception. Played blackjack for

469
00:25:46,156 --> 00:25:48,876
Speaker 3: long enough, at least the way Ed Thorpe taught people

470
00:25:48,916 --> 00:25:52,596
Speaker 3: to play, and you were sure to win Betthorpe published

471
00:25:52,636 --> 00:25:55,756
Speaker 3: his book in nineteen sixty six. A few years later

472
00:25:55,876 --> 00:25:58,236
Speaker 3: Roxy read it and it gave him the idea that

473
00:25:58,356 --> 00:25:59,876
Speaker 3: changed his life.

474
00:25:59,956 --> 00:26:02,716
Speaker 7: I decided that if I'm going to look at sports betting,

475
00:26:02,756 --> 00:26:06,556
Speaker 7: I need to look at it statistically driven, data driven,

476
00:26:07,596 --> 00:26:11,556
Speaker 7: not by not visual or instinct or just watching a

477
00:26:11,556 --> 00:26:12,276
Speaker 7: lot of games.

478
00:26:13,356 --> 00:26:16,516
Speaker 3: Outcomes in sports were obviously far less regular and predictable

479
00:26:16,556 --> 00:26:20,356
Speaker 3: than outcomes inside slot machines or even at blackjack tables.

480
00:26:21,476 --> 00:26:23,596
Speaker 3: But that didn't mean you couldn't learn stuff about sports

481
00:26:23,596 --> 00:26:26,956
Speaker 3: that would allow you to make better predictions. Not perfect predictions,

482
00:26:26,996 --> 00:26:29,476
Speaker 3: but better predictions than everyone else betting on games. In

483
00:26:29,516 --> 00:26:34,916
Speaker 3: the nineteen seventies, Roxy had baseball in mind. The guys

484
00:26:34,956 --> 00:26:38,796
Speaker 3: who booked baseball legally in Nevada and illegally everywhere else.

485
00:26:39,316 --> 00:26:41,276
Speaker 3: Ofrford Gambler is the chance to bet on not just

486
00:26:41,276 --> 00:26:43,916
Speaker 3: who would win the game, but how many runs both

487
00:26:43,956 --> 00:26:48,196
Speaker 3: teams would score. Roxy had an insight that seems obvious now.

488
00:26:48,956 --> 00:26:51,676
Speaker 3: The number of runs scored in any baseball game dependent

489
00:26:51,716 --> 00:26:54,316
Speaker 3: on factors like the weather at game time and the

490
00:26:54,356 --> 00:26:58,036
Speaker 3: size of the fields. San Diego's was a good example.

491
00:26:58,916 --> 00:27:00,636
Speaker 7: You just could not hit the ball out of there,

492
00:27:01,196 --> 00:27:03,996
Speaker 7: And then the Padres went and spent like an outrageous

493
00:27:04,036 --> 00:27:06,436
Speaker 7: contract to sign a guy like Oscar Gamble. All he

494
00:27:06,516 --> 00:27:08,956
Speaker 7: had is hit fly balls, and that park was a

495
00:27:09,156 --> 00:27:11,156
Speaker 7: place where flyballs went to die.

496
00:27:11,516 --> 00:27:13,116
Speaker 8: So you soon found out that.

497
00:27:13,236 --> 00:27:16,556
Speaker 7: General managers really didn't know anything about their own ballparks either.

498
00:27:17,836 --> 00:27:20,196
Speaker 3: The idea that the people who run sports teams don't

499
00:27:20,196 --> 00:27:22,756
Speaker 3: know what they're doing has probably never been a new idea.

500
00:27:23,476 --> 00:27:26,596
Speaker 3: Fans have always thought that they know better. What was

501
00:27:26,676 --> 00:27:29,076
Speaker 3: new is that someone in the stands was actually figuring

502
00:27:29,116 --> 00:27:32,476
Speaker 3: something out the effects of the wind and the humidity

503
00:27:32,636 --> 00:27:35,116
Speaker 3: and the barometric pressure on a ball that was flying

504
00:27:35,116 --> 00:27:35,676
Speaker 3: through the air.

505
00:27:36,636 --> 00:27:39,956
Speaker 7: We started to start getting weather reports from all the cities,

506
00:27:40,036 --> 00:27:43,276
Speaker 7: the parts out in which ones helped scoring or hindered scoring.

507
00:27:43,836 --> 00:27:45,876
Speaker 3: And dimensions right, I mean just the length of the

508
00:27:45,956 --> 00:27:47,076
Speaker 3: left field fence.

509
00:27:47,516 --> 00:27:50,876
Speaker 7: Dimensions were important, and we found out a couple of

510
00:27:50,916 --> 00:27:55,756
Speaker 7: the ballpark dimensional drawings were wrong. They had the north

511
00:27:55,836 --> 00:27:59,796
Speaker 7: pole raw well pointed north because we went out and

512
00:27:59,796 --> 00:28:00,716
Speaker 7: did them ourselves.

513
00:28:03,076 --> 00:28:06,036
Speaker 3: Roxy moves to Vegas full time in nineteen seventy five

514
00:28:06,436 --> 00:28:09,956
Speaker 3: to bet on sports, and just by taking into account

515
00:28:09,996 --> 00:28:12,756
Speaker 3: the weather and the size of ballparks, he's able to

516
00:28:12,796 --> 00:28:15,676
Speaker 3: make a killing while trying to avoid the people who

517
00:28:15,756 --> 00:28:19,076
Speaker 3: know a thing or two about actual killing. For the

518
00:28:19,116 --> 00:28:21,996
Speaker 3: Nevada legal bookmakers detectively run by the mob.

519
00:28:22,916 --> 00:28:27,236
Speaker 7: They'd have they had a hand in till about right well,

520
00:28:27,236 --> 00:28:27,756
Speaker 7: age seven.

521
00:28:28,436 --> 00:28:31,916
Speaker 2: Yeah, I just wonder in that environment was it dangerous

522
00:28:31,956 --> 00:28:34,156
Speaker 2: to win too much now?

523
00:28:34,716 --> 00:28:37,556
Speaker 7: Because actually what they would do is they could find

524
00:28:37,596 --> 00:28:40,156
Speaker 7: somebody else who could take your bet and they can.

525
00:28:40,156 --> 00:28:42,556
Speaker 2: Move it for more money someplace else in the country.

526
00:28:45,916 --> 00:28:48,956
Speaker 3: The old sports gambling market inside the United States was shady,

527
00:28:49,316 --> 00:28:52,156
Speaker 3: but it had its unwritten rules, and one was that

528
00:28:52,196 --> 00:28:55,076
Speaker 3: they always took your bets if you bet a lot.

529
00:28:55,356 --> 00:28:59,476
Speaker 3: They eventually moved the lines. These betting lines were all

530
00:28:59,476 --> 00:29:02,116
Speaker 3: set in Vegas for a very long stretch. They were

531
00:29:02,116 --> 00:29:07,156
Speaker 3: actually set in a single Vegas casino, the Stardust. The

532
00:29:07,196 --> 00:29:09,836
Speaker 3: bookie at the Stardust set the odds and everyone else

533
00:29:09,876 --> 00:29:13,996
Speaker 3: just followed his lead. There was a bank of payphones

534
00:29:14,036 --> 00:29:16,036
Speaker 3: outside the Stardos that were said to be the most

535
00:29:16,036 --> 00:29:18,956
Speaker 3: profitable in the country for the phone company because sports

536
00:29:18,996 --> 00:29:21,276
Speaker 3: gamblers used them to relay the odds to the illegal

537
00:29:21,316 --> 00:29:23,236
Speaker 3: bookies and betters across the country.

538
00:29:24,076 --> 00:29:27,956
Speaker 7: Communications back then was just with a phone call. That

539
00:29:28,396 --> 00:29:30,116
Speaker 7: was the only communicationshit were.

540
00:29:32,236 --> 00:29:35,316
Speaker 3: In the late nineteen seventies, the Nevada Gaming Control Board

541
00:29:35,316 --> 00:29:38,196
Speaker 3: tossed the mob out of Vegas and out of sports gambling,

542
00:29:38,796 --> 00:29:42,356
Speaker 3: and pretty soon ROXY became old news. By the early

543
00:29:42,436 --> 00:29:44,836
Speaker 3: nineteen eighties, everyone knew that the weather and the size

544
00:29:44,836 --> 00:29:48,476
Speaker 3: of ballparks had big effects on baseball scores, and ROXY

545
00:29:48,556 --> 00:29:52,636
Speaker 3: never found another systematic edge, and his life became a

546
00:29:52,636 --> 00:29:56,116
Speaker 3: bit of a mess. He'd been arrested for violating rfk's

547
00:29:56,156 --> 00:29:59,436
Speaker 3: Wire Act, he'd taken crazy risks as an illegal book maker,

548
00:29:59,636 --> 00:30:03,276
Speaker 3: and he'd run through two marriages. Is a gambling business

549
00:30:03,316 --> 00:30:06,716
Speaker 3: hard outter relationships, chargon why.

550
00:30:07,516 --> 00:30:12,116
Speaker 7: It just sort of takes over your mood and your personality.

551
00:30:13,356 --> 00:30:15,396
Speaker 7: I don't know anybody who's ever been in gambling thought

552
00:30:15,436 --> 00:30:17,116
Speaker 7: they were a better person for it.

553
00:30:17,116 --> 00:30:19,276
Speaker 3: It's interesting because when you think about why a person

554
00:30:19,316 --> 00:30:21,436
Speaker 3: would drift into gambling in the first place, it would

555
00:30:21,436 --> 00:30:22,996
Speaker 3: be because you think it might be an easy way

556
00:30:22,996 --> 00:30:25,876
Speaker 3: to make money, Yes, and it ends up being a harder

557
00:30:25,876 --> 00:30:26,676
Speaker 3: way to make money.

558
00:30:27,876 --> 00:30:29,516
Speaker 8: It does what did they say?

559
00:30:29,556 --> 00:30:31,956
Speaker 7: It's a hard way to make an easy living.

560
00:30:33,756 --> 00:30:37,236
Speaker 3: People said that Roxy now knew it. So in nineteen

561
00:30:37,276 --> 00:30:41,036
Speaker 3: eighty two, he quits gambling. He creates a company called

562
00:30:41,156 --> 00:30:46,036
Speaker 3: Las Vegas Sports Consultants. This new company will effectively replace

563
00:30:46,116 --> 00:30:48,996
Speaker 3: the Stardust Casino in setting the odds for all major

564
00:30:49,036 --> 00:30:53,836
Speaker 3: sports contests. Roxy's just better at it, and pretty soon

565
00:30:53,876 --> 00:30:57,596
Speaker 3: he's selling his odds to all the sports bookies, including

566
00:30:57,636 --> 00:31:01,876
Speaker 3: the Stardust. This makes sense to everybody in Las Vegas

567
00:31:02,436 --> 00:31:04,596
Speaker 3: hiring Roxy to set the odds in sports is like

568
00:31:04,676 --> 00:31:08,316
Speaker 3: hiring the first card counter to guard the blackjack tables.

569
00:31:09,116 --> 00:31:10,356
Speaker 7: So I said, you know, I'm going to try this

570
00:31:10,436 --> 00:31:12,756
Speaker 7: for a couple of years, but I'm not sure if

571
00:31:12,756 --> 00:31:16,996
Speaker 7: it's going to work, because it wasn't given that every

572
00:31:17,116 --> 00:31:19,436
Speaker 7: hotel was going to have a sportsbook. Was there rather

573
00:31:19,396 --> 00:31:23,076
Speaker 7: a limited business. But that was one of my better

574
00:31:23,156 --> 00:31:25,716
Speaker 7: decisions because it turned out to be a massive business.

575
00:31:26,876 --> 00:31:29,996
Speaker 3: Sports gambling isn't exactly a financial market, but it rhymes

576
00:31:30,036 --> 00:31:33,476
Speaker 3: with financial markets. What happens on Wall Street, somehow eventually

577
00:31:33,516 --> 00:31:36,596
Speaker 3: also happens in sports gambling. And Wall Street's about to

578
00:31:36,676 --> 00:31:40,636
Speaker 3: undergo dramatic change. First computers and then the Internet will

579
00:31:40,636 --> 00:31:43,316
Speaker 3: allow the markets to become a lot more complicated, and

580
00:31:43,356 --> 00:31:47,076
Speaker 3: the BET's a lot more complex. The world's about to

581
00:31:47,076 --> 00:31:49,516
Speaker 3: speed up, and a new kind of person with a

582
00:31:49,516 --> 00:31:53,156
Speaker 3: different kind of education is going to enter it. Old

583
00:31:53,156 --> 00:31:55,676
Speaker 3: school traders with high school degrees and lots of body

584
00:31:55,676 --> 00:31:58,396
Speaker 3: hair and names like Vinnie and Donnie are about to

585
00:31:58,396 --> 00:32:02,476
Speaker 3: be replaced by hairless PhDs from MIT with computer models

586
00:32:02,876 --> 00:32:05,076
Speaker 3: who as kids thought they grow up to be professors,

587
00:32:05,196 --> 00:32:09,116
Speaker 3: not traders. On Wall Street in the late nineteen eighties,

588
00:32:09,596 --> 00:32:12,956
Speaker 3: smart old school guys served as a kind of bridge

589
00:32:13,116 --> 00:32:18,436
Speaker 3: between the two cultures in sports gambling. Roxy was that bridge,

590
00:32:18,756 --> 00:32:20,596
Speaker 3: but it took a while for anyone to cross it.

591
00:32:37,036 --> 00:32:41,076
Speaker 2: We're here to see Rufus pebo. We're in the right place.

592
00:32:43,876 --> 00:32:46,636
Speaker 3: We're still in Vegas, but far from the strip.

593
00:32:48,436 --> 00:32:49,116
Speaker 8: We're not gona the law.

594
00:32:49,116 --> 00:32:50,596
Speaker 2: We're just gonna make a bunch of sports bets. He

595
00:32:50,636 --> 00:32:54,956
Speaker 2: runs into League of Gambre option. I never even knew

596
00:32:55,036 --> 00:32:56,396
Speaker 2: that you want any action.

597
00:33:02,276 --> 00:33:05,156
Speaker 3: The real action is no longer on the strip. The

598
00:33:05,276 --> 00:33:10,276
Speaker 3: real action is basically invisible. But here on the seventeenth floor,

599
00:33:10,796 --> 00:33:14,596
Speaker 3: with a sweeping view of the distant casinos, Rufus Peabody

600
00:33:14,716 --> 00:33:15,516
Speaker 3: lives and works.

601
00:33:16,076 --> 00:33:17,596
Speaker 2: Rufus We're here.

602
00:33:18,276 --> 00:33:18,676
Speaker 5: We're here.

603
00:33:19,156 --> 00:33:21,956
Speaker 3: Rufus Peabody is who crossed Roxy's bridge.

604
00:33:22,676 --> 00:33:25,236
Speaker 8: I never was a better as a kid. I didn't

605
00:33:25,276 --> 00:33:26,476
Speaker 8: know anything about sports betting.

606
00:33:26,516 --> 00:33:29,036
Speaker 3: You need to feel a little twinge of desire.

607
00:33:29,796 --> 00:33:30,036
Speaker 2: None.

608
00:33:30,396 --> 00:33:33,076
Speaker 8: Most people that got their start, they started losing and

609
00:33:33,156 --> 00:33:35,436
Speaker 8: they learned how to win. But I was never better.

610
00:33:35,476 --> 00:33:38,556
Speaker 8: I never grew up betting like besides NCAA tournament pools,

611
00:33:38,596 --> 00:33:41,156
Speaker 8: I was always good at those, but for me, it

612
00:33:41,236 --> 00:33:45,036
Speaker 8: was a game, and I'm not. I'm a risk taker,

613
00:33:45,116 --> 00:33:46,396
Speaker 8: but I'm not a gambler by nature.

614
00:33:47,276 --> 00:33:51,396
Speaker 3: Rufus grew up outside of Washington, DC, always loved sports,

615
00:33:51,596 --> 00:33:53,796
Speaker 3: thought he might like to be a sports journalist. He

616
00:33:53,876 --> 00:33:56,756
Speaker 3: still reminds me a bit of a journalist. He's a watcher,

617
00:33:57,476 --> 00:34:00,716
Speaker 3: a person whose eyes move more than his mouth. But

618
00:34:00,836 --> 00:34:02,756
Speaker 3: even when he was a kid, his mind took him

619
00:34:02,756 --> 00:34:04,596
Speaker 3: places that journalism usually doesn't.

620
00:34:05,076 --> 00:34:07,396
Speaker 8: So so it was this team one eighty two to

621
00:34:07,476 --> 00:34:10,636
Speaker 8: sixty four, but why did they win? Basically, I kind

622
00:34:10,636 --> 00:34:12,716
Speaker 8: of wanted to report on the why it happened rather

623
00:34:12,796 --> 00:34:15,556
Speaker 8: than just this guy got eighteen points and twelve rebounds

624
00:34:15,636 --> 00:34:18,796
Speaker 8: and this team one right. I kind of wanted the

625
00:34:19,436 --> 00:34:20,116
Speaker 8: story of why.

626
00:34:20,636 --> 00:34:22,476
Speaker 2: He wanted explanation. I want explanations.

627
00:34:23,636 --> 00:34:26,516
Speaker 3: In two thousand and four, Rufus graduated from high school

628
00:34:26,756 --> 00:34:29,756
Speaker 3: and went to Yale. He was still obsessed with figuring

629
00:34:29,836 --> 00:34:34,476
Speaker 3: out why. He studied statistics and built models that predicted

630
00:34:34,516 --> 00:34:37,476
Speaker 3: the performance of athletes and the outcomes of sporting events,

631
00:34:38,196 --> 00:34:40,676
Speaker 3: not because he wanted to gamble on them, just because

632
00:34:40,676 --> 00:34:43,236
Speaker 3: it was cool to figure out stuff that even people

633
00:34:43,236 --> 00:34:46,916
Speaker 3: who run sports teams don't know. He wanders around Yale

634
00:34:46,956 --> 00:34:48,316
Speaker 3: looking for someone to teach him more.

635
00:34:49,196 --> 00:34:52,876
Speaker 10: Rufus wants to do a thesis on, if I remember correctly,

636
00:34:53,676 --> 00:34:56,716
Speaker 10: behavioral biases and the baseball betting market.

637
00:34:57,516 --> 00:35:00,516
Speaker 3: He's who rufe has found. His name is Cade Massey.

638
00:35:01,476 --> 00:35:05,436
Speaker 3: He's a professor of organizational behavior. Was it interesting?

639
00:35:06,116 --> 00:35:09,476
Speaker 10: Oh yeah, absolutely, I mean what's not interesting about trying

640
00:35:09,516 --> 00:35:12,756
Speaker 10: to find psychological mistakes that people make with like, you know,

641
00:35:13,236 --> 00:35:16,516
Speaker 10: hundreds of thousands of observations of real money being bet

642
00:35:16,796 --> 00:35:19,716
Speaker 10: and he found mistakes. I mean, he was finding profitable

643
00:35:19,756 --> 00:35:20,996
Speaker 10: strategies right off the bet.

644
00:35:22,036 --> 00:35:25,876
Speaker 3: Rufus just kept asking questions about the behavior of sports gamblers.

645
00:35:26,516 --> 00:35:29,996
Speaker 3: He still wasn't placing bets himself. He was just working

646
00:35:30,036 --> 00:35:32,596
Speaker 3: with this professor to build a model to predict college

647
00:35:32,636 --> 00:35:35,956
Speaker 3: football scores. They pitched it to the Wall Street Journal,

648
00:35:35,956 --> 00:35:38,476
Speaker 3: and the journal agreed to publish their college football picks

649
00:35:38,556 --> 00:35:41,036
Speaker 3: of the week. It was just how they would bet,

650
00:35:41,236 --> 00:35:42,956
Speaker 3: were they to bet on college football.

651
00:35:44,556 --> 00:35:47,156
Speaker 10: And he would then post our picks of the week.

652
00:35:47,196 --> 00:35:48,876
Speaker 10: We were just posting them because we were working with

653
00:35:48,916 --> 00:35:51,396
Speaker 10: the Wall Street Journal, So post him on Tuesday or Wednesday,

654
00:35:51,636 --> 00:35:54,276
Speaker 10: and then he would watch as the prices started moving

655
00:35:54,356 --> 00:35:54,916
Speaker 10: on his screen.

656
00:35:55,036 --> 00:35:57,996
Speaker 3: Oh my god, which is to say, the sports gambling

657
00:35:58,036 --> 00:36:02,156
Speaker 3: market would see their picks and move in response because

658
00:36:02,196 --> 00:36:04,356
Speaker 3: the market figured out that their picks were that good.

659
00:36:05,036 --> 00:36:08,036
Speaker 10: Within a year or so, we quit posting college picks

660
00:36:08,076 --> 00:36:09,996
Speaker 10: because it was getting too much in the way of

661
00:36:10,076 --> 00:36:10,756
Speaker 10: what he was trying to.

662
00:36:10,756 --> 00:36:14,156
Speaker 3: Do, because he wanted to bet it himself, because he

663
00:36:14,236 --> 00:36:15,996
Speaker 3: wanted to bet it, and if they're so good you

664
00:36:15,996 --> 00:36:19,276
Speaker 3: would bet them, you wouldn't sell them, right. I mean,

665
00:36:19,316 --> 00:36:21,396
Speaker 3: it was bound to eventually occur to Rufus that if

666
00:36:21,396 --> 00:36:24,196
Speaker 3: he could predict the scores of college football games, then

667
00:36:24,236 --> 00:36:27,596
Speaker 3: he should just bet on them himself. But it's funny

668
00:36:27,636 --> 00:36:31,236
Speaker 3: how he got there. In his head, Roxy Roxboro had

669
00:36:31,276 --> 00:36:34,356
Speaker 3: started as a gambler who then set out to find

670
00:36:34,476 --> 00:36:38,356
Speaker 3: some kind of edge to bet. Rufus Peabody started by

671
00:36:38,396 --> 00:36:42,716
Speaker 3: finding these edges and kind of stumbled into gambling and

672
00:36:42,836 --> 00:36:48,116
Speaker 3: then found Roxy. During Rufus's junior year at Yale, he

673
00:36:48,236 --> 00:36:51,916
Speaker 3: read an article in ESPN about Roxy's sports analytics company,

674
00:36:52,516 --> 00:36:56,916
Speaker 3: Las Vegas Sports Consultants. Roxy's company wasn't used to getting

675
00:36:56,956 --> 00:37:00,276
Speaker 3: resumes from Yale juniors, but they gave him a summary

676
00:37:00,316 --> 00:37:04,116
Speaker 3: internship anyway and showed him their world from their offices

677
00:37:04,236 --> 00:37:05,916
Speaker 3: right next to the Las Vegas Airport.

678
00:37:07,196 --> 00:37:09,716
Speaker 8: They would bet on what plane was most likely to

679
00:37:09,876 --> 00:37:11,636
Speaker 8: land next right, And this is like sort of pre

680
00:37:11,796 --> 00:37:14,196
Speaker 8: internet days or pre like being able to see flight

681
00:37:14,236 --> 00:37:17,116
Speaker 8: plans and stuff like that, and so it was like, okay,

682
00:37:17,116 --> 00:37:20,076
Speaker 8: American Airlines is like six to one, like you know,

683
00:37:20,556 --> 00:37:25,276
Speaker 8: Southwest is two to one whatever. What people didn't realize though,

684
00:37:25,356 --> 00:37:28,876
Speaker 8: was Roxy actually had a contact in the control tower,

685
00:37:29,796 --> 00:37:34,036
Speaker 8: and so Roxy won. He made money off of these bets,

686
00:37:35,556 --> 00:37:39,316
Speaker 8: but he didn't make enough to draw suspicion. That was

687
00:37:39,396 --> 00:37:42,876
Speaker 8: the key. But he would occasionally hit the japan Air

688
00:37:42,916 --> 00:37:44,676
Speaker 8: at three hundred to one, right or whatever.

689
00:37:49,436 --> 00:37:52,836
Speaker 3: Roxy screw would bet on everything. Rufus wasn't like that.

690
00:37:54,116 --> 00:37:55,716
Speaker 3: He didn't even think of what he wanted to do

691
00:37:55,916 --> 00:37:59,716
Speaker 3: as gambling, but he did want to understand this other world,

692
00:38:00,516 --> 00:38:02,756
Speaker 3: this world where people bet on anything that moved.

693
00:38:04,156 --> 00:38:07,396
Speaker 8: They shared the building with American Wagering, so with LeRoy's,

694
00:38:07,396 --> 00:38:13,076
Speaker 8: which was a sort of third party sportsbook operator. Le

695
00:38:13,196 --> 00:38:16,316
Speaker 8: Ros didn't have a casino, but they were in casinos

696
00:38:16,436 --> 00:38:19,956
Speaker 8: like Hooters or Terrible Herbst.

697
00:38:20,356 --> 00:38:21,996
Speaker 2: Right, Hooters has a casino.

698
00:38:22,436 --> 00:38:25,476
Speaker 8: Yeah, Hooters casino. It's on the strip. It's right, tropic

699
00:38:25,516 --> 00:38:28,716
Speaker 8: cannot basically right. Yeah, so I met, I meet this

700
00:38:29,036 --> 00:38:32,036
Speaker 8: the head trader there, right, and I have all these questions.

701
00:38:32,476 --> 00:38:35,636
Speaker 8: A book maker can make more money. Let's say, if

702
00:38:35,676 --> 00:38:37,596
Speaker 8: they know the public's bias, they can make more money

703
00:38:37,876 --> 00:38:40,196
Speaker 8: setting a line somewhere between the true price and the

704
00:38:40,276 --> 00:38:42,596
Speaker 8: price the public thinks that's the way to maximize.

705
00:38:46,076 --> 00:38:48,116
Speaker 3: There's no reason you should understand what rufe has just

706
00:38:48,196 --> 00:38:50,676
Speaker 3: said there, but let me try to explain it, because

707
00:38:50,676 --> 00:38:52,556
Speaker 3: it tells you a bit about how this old school

708
00:38:52,636 --> 00:38:56,836
Speaker 3: sports gambling world works. The line is just the odds

709
00:38:57,116 --> 00:39:00,476
Speaker 3: or the points spread. The true price is what the

710
00:39:00,556 --> 00:39:04,396
Speaker 3: odds would be if you somehow knew every possible relevant

711
00:39:04,436 --> 00:39:08,476
Speaker 3: bit of information about some upcoming game. Of course, no

712
00:39:08,556 --> 00:39:11,916
Speaker 3: one ever knew everything, so there is in reality, never

713
00:39:12,036 --> 00:39:15,876
Speaker 3: a perfect true price, just some number that the smartest

714
00:39:15,916 --> 00:39:19,636
Speaker 3: and best informed better is agree on. Say they agreed

715
00:39:19,676 --> 00:39:22,756
Speaker 3: that the Packers should be eight point favorites over the Cowboys,

716
00:39:23,956 --> 00:39:26,956
Speaker 3: but most of the gamblers are Cowboys fans, and the

717
00:39:27,036 --> 00:39:30,396
Speaker 3: Cowboys fans think the Cowboys are only three point underdogs.

718
00:39:31,396 --> 00:39:33,676
Speaker 3: Rufus was asking the bookie if he thought he could

719
00:39:33,876 --> 00:39:36,796
Speaker 3: entice the public to make more stupid bets if he

720
00:39:36,876 --> 00:39:39,316
Speaker 3: set the line not at the true price of eight points,

721
00:39:39,516 --> 00:39:43,436
Speaker 3: but it's say five points, because Cowboys fans will think

722
00:39:43,476 --> 00:39:46,316
Speaker 3: the cowboys are better than they actually are and bet

723
00:39:46,436 --> 00:39:46,916
Speaker 3: even more.

724
00:39:48,196 --> 00:39:50,236
Speaker 8: I said, theoretically, you can make more money setting a

725
00:39:50,316 --> 00:39:53,156
Speaker 8: line somewhere between the true price and where the public

726
00:39:53,196 --> 00:39:57,796
Speaker 8: thinks the price is. And he says, theory, theory and theory.

727
00:39:57,956 --> 00:40:07,116
Speaker 8: Dick don't fit in an asshole. And this guy, yeah,

728
00:40:07,276 --> 00:40:12,076
Speaker 8: he was probably three hundred pounds five to eight, smoking

729
00:40:12,116 --> 00:40:14,196
Speaker 8: a cigar in a dark room, looking at a bunch

730
00:40:14,236 --> 00:40:15,236
Speaker 8: of numbers on a screen.

731
00:40:15,676 --> 00:40:19,076
Speaker 3: In just a flash, there, you've changed our podcast rating.

732
00:40:19,476 --> 00:40:19,756
Speaker 8: Sorry.

733
00:40:30,356 --> 00:40:33,916
Speaker 3: Rufus Peabody recently of Yale is no one's idea of

734
00:40:33,996 --> 00:40:37,636
Speaker 3: a hustler. He's too sweet natured and even tempered, and

735
00:40:37,756 --> 00:40:39,876
Speaker 3: way too open to telling other people about the stuff

736
00:40:39,916 --> 00:40:43,396
Speaker 3: he's learned. He finishes up at Yale and moves back

737
00:40:43,436 --> 00:40:46,716
Speaker 3: to Vegas to work full time at Las Vegas Sports Consultants.

738
00:40:48,196 --> 00:40:51,356
Speaker 3: But now Rufus thinks he might have an edge, and

739
00:40:51,476 --> 00:40:54,716
Speaker 3: people in and around Roxy's firm think that maybe he's right.

740
00:40:55,796 --> 00:40:58,036
Speaker 8: The Super Bowl was my first big break. Super Bowl

741
00:40:58,036 --> 00:41:01,196
Speaker 8: two thousand and nine. Okay, I had made a friend

742
00:41:01,316 --> 00:41:05,676
Speaker 8: with a professional sports better guy that bet baseball, and

743
00:41:07,076 --> 00:41:10,116
Speaker 8: he loaned me ten thousand dollars to bet. I had

744
00:41:10,196 --> 00:41:13,596
Speaker 8: my own ten to twelve thousand dollars. My boss, Kenny,

745
00:41:14,596 --> 00:41:19,636
Speaker 8: unbeknownst to everybody else, invested forty thousand dollars in me

746
00:41:19,796 --> 00:41:21,476
Speaker 8: and gave me a twenty percent free roll.

747
00:41:21,396 --> 00:41:25,236
Speaker 3: On it, meaning that if it wins, you take twenty

748
00:41:25,236 --> 00:41:28,196
Speaker 3: percent of rance, but you've suffered another losses correct.

749
00:41:29,316 --> 00:41:32,836
Speaker 8: And so I ended up with close to sixty thousand

750
00:41:32,876 --> 00:41:35,036
Speaker 8: dollars bet on the Super Bowl, and so I basically

751
00:41:35,116 --> 00:41:38,476
Speaker 8: was pretty leveraged. Yeah, and I remember being like, this

752
00:41:38,796 --> 00:41:41,516
Speaker 8: game doesn't work out, you know, I gave it a shot.

753
00:41:41,556 --> 00:41:43,516
Speaker 2: All right, And what is causing you to have such

754
00:41:43,596 --> 00:41:44,916
Speaker 2: conviction about a game?

755
00:41:45,276 --> 00:41:45,396
Speaker 11: Oh?

756
00:41:45,476 --> 00:41:45,756
Speaker 2: Nothing.

757
00:41:46,076 --> 00:41:48,476
Speaker 8: It wasn't conviction about the game. It was betting the props.

758
00:41:49,476 --> 00:41:54,036
Speaker 3: The props short for proposition bets not on the whole game,

759
00:41:54,156 --> 00:41:57,516
Speaker 3: but pieces of the game. But the standard story, which

760
00:41:57,596 --> 00:42:00,236
Speaker 3: is almost certainly not true, was that the prop bet

761
00:42:00,356 --> 00:42:03,156
Speaker 3: was invented for the nineteen eighty six Super Bowl between

762
00:42:03,156 --> 00:42:06,556
Speaker 3: the Chicago Bears and the New England Patriots. The Bears

763
00:42:06,596 --> 00:42:08,956
Speaker 3: were such heavy favorites that Vegas had trouble jitting up

764
00:42:08,956 --> 00:42:12,476
Speaker 3: in in the game, so a Vegas bookie created a

765
00:42:12,596 --> 00:42:16,836
Speaker 3: side bet the odds that a Bear's defensive tackle named

766
00:42:16,916 --> 00:42:21,196
Speaker 3: William the Refrigerator Perry would score a touchdown. It was

767
00:42:21,236 --> 00:42:23,756
Speaker 3: a long shot bet, and the betting public loved it,

768
00:42:24,156 --> 00:42:27,356
Speaker 3: and Vegas bookies lost a fortune when the fridge did

769
00:42:27,436 --> 00:42:31,436
Speaker 3: indeed score. But back to Rufus and forward to the

770
00:42:31,476 --> 00:42:35,276
Speaker 3: Super Bowl of two thousand and nine, the Pittsburgh Steelers

771
00:42:35,356 --> 00:42:39,196
Speaker 3: played the Arizona Cardinals. Rufus wasn't betting the whole game,

772
00:42:39,236 --> 00:42:42,236
Speaker 3: but pieces of the game. His pro Football model spits

773
00:42:42,276 --> 00:42:45,116
Speaker 3: out odds for all this weird stuff that Vegas bookies

774
00:42:45,156 --> 00:42:48,676
Speaker 3: are now offering bets on the odds that Steeler's running

775
00:42:48,716 --> 00:42:52,356
Speaker 3: back Gary Russell will score the game's first touchdown. For example,

776
00:42:53,436 --> 00:42:57,476
Speaker 3: Rufus has vast troves of data to mine. He can

777
00:42:57,596 --> 00:43:00,796
Speaker 3: do stuff with it that Roxy would never imagine. He

778
00:43:00,876 --> 00:43:02,756
Speaker 3: could do stuff that even the people who run the

779
00:43:02,796 --> 00:43:07,116
Speaker 3: Pittsburgh Steelers would never imagine doing. I mean, even Gary

780
00:43:07,236 --> 00:43:10,316
Speaker 3: Russell likely has no idea that you can calculate the

781
00:43:10,396 --> 00:43:13,396
Speaker 3: odds that he will score the game's first touchdown. But

782
00:43:13,556 --> 00:43:17,116
Speaker 3: Rufus can his model puts those odds much higher than

783
00:43:17,156 --> 00:43:20,956
Speaker 3: the bookies' odds, so in Rufus's mind, it's a great bet.

784
00:43:21,676 --> 00:43:25,036
Speaker 3: He makes dozens of similar bets BET's where his model

785
00:43:25,076 --> 00:43:27,316
Speaker 3: tells him that the bookies are giving him better odds

786
00:43:27,396 --> 00:43:27,916
Speaker 3: than they should.

787
00:43:29,076 --> 00:43:36,436
Speaker 8: I still remember going. It was like Hara's Caesar's the Rio.

788
00:43:37,276 --> 00:43:39,676
Speaker 8: I ended up getting down like two hundred dollars at

789
00:43:39,716 --> 00:43:42,956
Speaker 8: a time, like five thousand dollars. Positions on a few

790
00:43:42,996 --> 00:43:47,396
Speaker 8: things like that were really good, and so I was

791
00:43:47,516 --> 00:43:51,476
Speaker 8: diversified within the game. Within the game, I wasn't betting

792
00:43:51,516 --> 00:43:52,756
Speaker 8: on the outcome of the game, but I was still

793
00:43:52,916 --> 00:43:54,876
Speaker 8: I still to this day, have never watched that game.

794
00:43:55,116 --> 00:43:57,836
Speaker 2: I was too nervous. How did you experience the game

795
00:43:57,876 --> 00:43:58,676
Speaker 2: if you didn't watch it.

796
00:43:59,956 --> 00:44:02,396
Speaker 8: I went to this little par three course that's open

797
00:44:02,436 --> 00:44:06,116
Speaker 8: at night, right south of the airport, and I played

798
00:44:07,236 --> 00:44:11,076
Speaker 8: the part three course twice until I felt like the

799
00:44:11,156 --> 00:44:14,116
Speaker 8: game would definitely be over. And then I went grocery shopping.

800
00:44:15,116 --> 00:44:17,636
Speaker 8: And I didn't have a smart this is pretty smartphone.

801
00:44:18,036 --> 00:44:19,916
Speaker 8: I went grocery shopping, and then I went home and

802
00:44:19,956 --> 00:44:20,796
Speaker 8: cooked myself dinner.

803
00:44:21,036 --> 00:44:21,236
Speaker 3: Huh.

804
00:44:21,956 --> 00:44:24,436
Speaker 8: And then and only then did I open my computer

805
00:44:25,196 --> 00:44:27,316
Speaker 8: and check and see how the game went, and were

806
00:44:27,316 --> 00:44:29,396
Speaker 8: you just going through your prop bets seeing what happened.

807
00:44:29,676 --> 00:44:31,196
Speaker 8: First I went to the boss score and I saw

808
00:44:31,676 --> 00:44:34,236
Speaker 8: the first score was Gary Russell one yard touchdown run.

809
00:44:35,356 --> 00:44:39,036
Speaker 8: I was like, ah right, And it turned out out

810
00:44:39,076 --> 00:44:42,276
Speaker 8: of like fifty six thousand dollars bet like, I profited

811
00:44:42,356 --> 00:44:43,636
Speaker 8: like twenty three thousand on it.

812
00:44:45,236 --> 00:44:48,356
Speaker 3: Rufus figures out how much he's won. Then he physically

813
00:44:48,476 --> 00:44:51,516
Speaker 3: retraces his steps to the many casinos that had taken

814
00:44:51,556 --> 00:44:55,436
Speaker 3: his many bets, still driving an old Honda Civic. You

815
00:44:55,516 --> 00:44:57,716
Speaker 3: aren't all these little tickets you have to write, You

816
00:44:57,756 --> 00:45:00,396
Speaker 3: go cash each one individually. So you had you must

817
00:45:00,396 --> 00:45:01,556
Speaker 3: have had one hundred tickets?

818
00:45:01,756 --> 00:45:02,676
Speaker 8: Oh yeah, probably.

819
00:45:03,716 --> 00:45:08,476
Speaker 3: He just drives around Las Vegas and the money piles up, and.

820
00:45:08,516 --> 00:45:11,076
Speaker 8: I remember having like thirty thousand dollars on the front

821
00:45:11,116 --> 00:45:13,796
Speaker 8: seat and being like, oh my god, so much money

822
00:45:14,556 --> 00:45:15,676
Speaker 8: in cash in cash.

823
00:45:20,516 --> 00:45:23,276
Speaker 3: After that, lots of people in Vegas wanted to lend

824
00:45:23,316 --> 00:45:26,876
Speaker 3: money to Rufus and take a cut of his bets. Rufus,

825
00:45:26,916 --> 00:45:28,996
Speaker 3: for his part, was still sitting in his office in

826
00:45:29,116 --> 00:45:33,036
Speaker 3: Las Vegas Sports Consultants, but pretty soon he was directing

827
00:45:33,076 --> 00:45:35,516
Speaker 3: an army of people to lay bets in sports books

828
00:45:35,556 --> 00:45:39,396
Speaker 3: across the city, sports books that got their odds from

829
00:45:39,516 --> 00:45:43,636
Speaker 3: Las Vegas sports consultants. Rufus was in effect betting against

830
00:45:43,676 --> 00:45:48,156
Speaker 3: the lines created by Roxy's firm. Roxy himself had moved

831
00:45:48,196 --> 00:45:50,716
Speaker 3: on at this point, but he watched what Rufus was

832
00:45:50,796 --> 00:45:52,396
Speaker 3: doing and he admired it.

833
00:45:53,396 --> 00:45:55,476
Speaker 7: He came to Bouquet once. Then I met him, even

834
00:45:55,556 --> 00:45:59,036
Speaker 7: after one lunch. I said, this guy's thinking at a

835
00:45:59,116 --> 00:46:03,556
Speaker 7: higher level than other people. And I learned a lot

836
00:46:03,596 --> 00:46:07,036
Speaker 7: for a moment, not because he was divulging his secrets,

837
00:46:07,436 --> 00:46:09,236
Speaker 7: but he was just thinking at a higher level.

838
00:46:10,116 --> 00:46:14,116
Speaker 3: To get his edge. Roxy had used weather reports, Rufus

839
00:46:14,236 --> 00:46:16,676
Speaker 3: was using the spin rates on pitcher's curveballs.

840
00:46:17,156 --> 00:46:20,956
Speaker 8: I try to drill things down to their root, cause

841
00:46:21,196 --> 00:46:24,196
Speaker 8: it's kind of what you do when you write books.

842
00:46:24,236 --> 00:46:26,876
Speaker 8: You try to figure out the person, what makes them tick,

843
00:46:27,316 --> 00:46:29,756
Speaker 8: what's the story. I try to figure out why things

844
00:46:29,836 --> 00:46:32,396
Speaker 8: happen in a baseball game or a golf tournament, what

845
00:46:32,556 --> 00:46:35,676
Speaker 8: makes the player good. It's not just their score, Like,

846
00:46:35,716 --> 00:46:38,196
Speaker 8: what are the things that are driving their score? Which

847
00:46:38,236 --> 00:46:41,996
Speaker 8: of those are repeatable, which aren't? And right now you

848
00:46:42,116 --> 00:46:45,116
Speaker 8: have all this computer vision that type of data available

849
00:46:45,196 --> 00:46:46,796
Speaker 8: now and with a lot of these sports. I mean,

850
00:46:47,036 --> 00:46:49,796
Speaker 8: we're now talking about bat speed, measuring bat speed and

851
00:46:49,916 --> 00:46:52,436
Speaker 8: looking at like aging curves for bat speed.

852
00:46:53,276 --> 00:46:55,716
Speaker 3: The whole point of Rufus is that he never lets

853
00:46:55,756 --> 00:46:59,316
Speaker 3: emotion interfere with his process. But that doesn't mean he

854
00:46:59,356 --> 00:47:00,316
Speaker 3: doesn't feel emotion.

855
00:47:00,916 --> 00:47:01,356
Speaker 2: He does.

856
00:47:02,156 --> 00:47:03,516
Speaker 3: He feels it for his process.

857
00:47:04,556 --> 00:47:08,196
Speaker 8: We're using bat speed to then predict exit velocity, and

858
00:47:08,236 --> 00:47:11,236
Speaker 8: we're using exit ville to then predict, like weaited on

859
00:47:11,316 --> 00:47:14,436
Speaker 8: base average and basically whether a ball will be hit

860
00:47:14,556 --> 00:47:16,236
Speaker 8: or not, and what kind of damage it'll be if

861
00:47:16,276 --> 00:47:20,036
Speaker 8: it is, and then you know, use that to predict wins.

862
00:47:20,116 --> 00:47:20,876
Speaker 2: And how did it work?

863
00:47:21,636 --> 00:47:22,156
Speaker 8: How did it work?

864
00:47:22,196 --> 00:47:22,516
Speaker 2: It works?

865
00:47:22,596 --> 00:47:25,796
Speaker 8: Well, we made one hundred and twenty five thousand in

866
00:47:25,836 --> 00:47:28,036
Speaker 8: the first month. I don't know what our volume was overall,

867
00:47:28,636 --> 00:47:33,156
Speaker 8: and I got twenty percent of it, which was great

868
00:47:33,196 --> 00:47:35,316
Speaker 8: because my yearly salary was twenty five thousand.

869
00:47:36,556 --> 00:47:39,156
Speaker 3: Rufus had become the card counter at the blackjack table,

870
00:47:39,636 --> 00:47:42,956
Speaker 3: only it was richer than that. He was generating new

871
00:47:43,076 --> 00:47:47,276
Speaker 3: insight about why things happened in sports. A blackjack dealer

872
00:47:47,396 --> 00:47:50,356
Speaker 3: knows where the card counter gets his edge. The sports book.

873
00:47:50,356 --> 00:47:53,916
Speaker 3: He couldn't really tell where Rufus was getting his which

874
00:47:53,996 --> 00:47:56,716
Speaker 3: made Rufus and what he was doing even more unsettling.

875
00:47:57,676 --> 00:48:00,716
Speaker 3: And did the M at any point say we're not

876
00:48:00,836 --> 00:48:03,596
Speaker 3: taking your bets. The M Casino was one of Rufus's

877
00:48:03,636 --> 00:48:04,676
Speaker 3: favorite sports books.

878
00:48:05,236 --> 00:48:07,596
Speaker 8: Now they had their whole thing was we're going to

879
00:48:07,636 --> 00:48:11,116
Speaker 8: take all comers. We want to be we want a

880
00:48:11,196 --> 00:48:13,036
Speaker 8: lot of volume. We think we're better than people.

881
00:48:14,116 --> 00:48:17,756
Speaker 3: Then comes the Supreme Court decision of twenty eighteen, twenty

882
00:48:17,796 --> 00:48:21,556
Speaker 3: three states soon legalized sports gambling. Rufus now has the

883
00:48:21,756 --> 00:48:24,916
Speaker 3: M Casino and a lot of others right in his pocket.

884
00:48:25,636 --> 00:48:29,036
Speaker 12: Van Duel and the PGA Tour have teams up. Now

885
00:48:29,156 --> 00:48:31,396
Speaker 12: you can get more action out of every stop on

886
00:48:31,476 --> 00:48:32,476
Speaker 12: the tour, and.

887
00:48:32,596 --> 00:48:35,436
Speaker 3: Rufus of course stands to make a killing. The bigger

888
00:48:35,476 --> 00:48:37,956
Speaker 3: the markets, the more he can bet, bet.

889
00:48:37,796 --> 00:48:40,996
Speaker 12: The PGA Tour and make every moment more with Fan

890
00:48:41,116 --> 00:48:42,076
Speaker 12: Duel sports book.

891
00:48:43,796 --> 00:48:46,116
Speaker 3: But as it turns out, that's not how it's going

892
00:48:46,196 --> 00:48:49,036
Speaker 3: to go down. This ecosystem is going to change in

893
00:48:49,156 --> 00:48:52,676
Speaker 3: ways Rufus didn't predict, and he began to sense it

894
00:48:53,156 --> 00:48:54,556
Speaker 3: in late twenty twenty.

895
00:48:55,516 --> 00:48:59,276
Speaker 8: So I would drive up to New Hampshire to bet

896
00:48:59,356 --> 00:49:03,436
Speaker 8: at these kiosks initially, and then once there was mobile betting,

897
00:49:04,356 --> 00:49:06,516
Speaker 8: I had an account on DraftKings.

898
00:49:07,756 --> 00:49:11,276
Speaker 3: Rufus had a girlfriend in Masses. Massachusetts hadn't yet legalized

899
00:49:11,276 --> 00:49:14,036
Speaker 3: sports betting, so he needed to cross state lines to

900
00:49:14,156 --> 00:49:16,676
Speaker 3: use the betting app on his phone. The drive took

901
00:49:16,716 --> 00:49:19,356
Speaker 3: him like forty five minutes, but it was actually easier

902
00:49:19,396 --> 00:49:21,836
Speaker 3: than running all over Vegas trying to get cash down.

903
00:49:23,076 --> 00:49:25,036
Speaker 3: He and his process were built for this new type

904
00:49:25,036 --> 00:49:28,916
Speaker 3: of casino. He could bet on golf basically all day long,

905
00:49:29,716 --> 00:49:31,396
Speaker 3: until one day he couldn't.

906
00:49:32,476 --> 00:49:35,716
Speaker 8: One week, I lost thirty thousand dollars. I got a

907
00:49:35,756 --> 00:49:37,836
Speaker 8: phone call to tell me that they were cutting my

908
00:49:37,916 --> 00:49:38,676
Speaker 8: limits on golf.

909
00:49:39,316 --> 00:49:42,996
Speaker 3: He'd lost thirty thousand dollars, and DraftKings stopped taking his

910
00:49:43,116 --> 00:49:46,356
Speaker 3: big bets. By the way, we've reached out to DraftKings,

911
00:49:46,396 --> 00:49:49,516
Speaker 3: and so far they have declined to talk with us. Anyway,

912
00:49:49,716 --> 00:49:52,116
Speaker 3: it was clear to Rufus back in twenty twenty that

913
00:49:52,276 --> 00:49:55,236
Speaker 3: this was definitely no longer his old sports gambling.

914
00:49:54,916 --> 00:49:58,836
Speaker 8: World because I had bet enough it spurred them to

915
00:49:58,916 --> 00:50:00,996
Speaker 8: actually go in and look at the stuff I'd been

916
00:50:01,036 --> 00:50:04,716
Speaker 8: betting and how I'd been doing. Books are not limiting

917
00:50:04,836 --> 00:50:08,156
Speaker 8: people just because they win. They're limiting them because they

918
00:50:08,236 --> 00:50:08,916
Speaker 8: think they're going to win.

919
00:50:09,196 --> 00:50:09,556
Speaker 2: Future.

920
00:50:10,596 --> 00:50:13,156
Speaker 3: Rufus used data to predict what athletes were going to do.

921
00:50:14,436 --> 00:50:17,396
Speaker 3: DraftKings was using data to predict what Rufus would do.

922
00:50:18,316 --> 00:50:20,596
Speaker 3: When they looked at the data, they saw that after

923
00:50:20,716 --> 00:50:23,956
Speaker 3: Rufus placed his bets, the odds nearly always moved in

924
00:50:24,036 --> 00:50:27,036
Speaker 3: his favor. These were the bets of someone who knew

925
00:50:27,076 --> 00:50:30,316
Speaker 3: things before the market knew them, and the new bookies

926
00:50:30,356 --> 00:50:33,236
Speaker 3: were not like the old bookies. They only wanted to

927
00:50:33,316 --> 00:50:36,676
Speaker 3: take certain kind of bets, Bets that were more like

928
00:50:36,756 --> 00:50:38,716
Speaker 3: the bet you make when you press the buttons on

929
00:50:38,756 --> 00:50:42,356
Speaker 3: a slot machine, Bets that if you made them often enough,

930
00:50:42,556 --> 00:50:45,276
Speaker 3: you were sure to lose, the sort of bets a

931
00:50:45,356 --> 00:50:49,636
Speaker 3: fan would make, the sort of bets Rufus Peabody never made.

932
00:50:50,716 --> 00:50:52,796
Speaker 8: Refusing a bet wasn't a thing. It never was a

933
00:50:52,876 --> 00:50:56,276
Speaker 8: thing here, huh. Like you if you got kicked out

934
00:50:56,316 --> 00:50:58,316
Speaker 8: of a casino or if you couldn't get there, it

935
00:50:58,436 --> 00:51:02,156
Speaker 8: was because you did something wrong, like you violated the

936
00:51:02,596 --> 00:51:04,516
Speaker 8: sacred bookmaker better covenant.

937
00:51:05,476 --> 00:51:07,396
Speaker 3: Being smarter than the market didn't used to get you

938
00:51:07,556 --> 00:51:13,516
Speaker 3: kicked out of the market. But the market's changed. Sports

939
00:51:13,556 --> 00:51:15,636
Speaker 3: gambling is still a hard way to make an easy living,

940
00:51:16,796 --> 00:51:20,276
Speaker 3: but now it feels even less fair. Now it feels

941
00:51:20,316 --> 00:51:21,876
Speaker 3: like someone should step in and help.

942
00:51:21,956 --> 00:51:24,036
Speaker 2: Rufus okay cool.

943
00:51:24,196 --> 00:51:29,516
Speaker 11: So I downloaded FanDuel, DraftKings, Fliff Fanatics, Caesar's Bet, MGM,

944
00:51:29,796 --> 00:51:32,756
Speaker 11: and PayPal. So now everyone has all of my information

945
00:51:33,076 --> 00:51:34,236
Speaker 11: and my social security number.

946
00:51:34,516 --> 00:51:35,756
Speaker 8: Oh, your social security number.

947
00:51:35,836 --> 00:51:36,516
Speaker 11: They all asked for it.

948
00:51:36,596 --> 00:51:41,316
Speaker 3: Guess these new sports gambling apps, they all ask for it,

949
00:51:42,076 --> 00:51:43,836
Speaker 3: and so we're going to give it to them in

950
00:51:43,996 --> 00:51:55,116
Speaker 3: our next episode. Against the Rules is written and hosted

951
00:51:55,156 --> 00:51:57,716
Speaker 3: by me Michael Lewis and produced by Lydia gene Kott,

952
00:51:57,796 --> 00:52:01,956
Speaker 3: Catherine Gerardeau, and Ariela Markowitz. Our editor is Julia Barton.

953
00:52:02,316 --> 00:52:05,596
Speaker 3: Our engineer is Jake Gorski. Our music was composed by

954
00:52:05,676 --> 00:52:10,116
Speaker 3: Matthias Bossi and John Evans of stell Wagon Sepinett. Our

955
00:52:10,156 --> 00:52:13,836
Speaker 3: fact checker is Lauren Vespoli. Against the Rules is a

956
00:52:13,876 --> 00:52:18,876
Speaker 3: production of Pushkin Industries. To find more Pushkin podcasts, listen

957
00:52:18,916 --> 00:52:23,036
Speaker 3: on the iHeartRadio app, Apple Podcasts, or wherever you listen

958
00:52:23,076 --> 00:52:25,836
Speaker 3: to podcasts, and if you'd like to listen to ad

959
00:52:25,996 --> 00:52:29,636
Speaker 3: Free and learn about other exclusive offerings don't forget to

960
00:52:29,716 --> 00:52:33,476
Speaker 3: sign up for a Pushkin Plus subscription at pushkin dot fm,

961
00:52:33,836 --> 00:52:36,716
Speaker 3: slash Plus, or on our Apple Show page.