WEBVTT - Episode 7: Little Big Short 0:00:15.356 --> 0:00:24.036 Pushkin, I want to do one hundred bucks on yes 0:00:24.156 --> 0:00:25.876 for the A's Yankees score. 0:00:25.676 --> 0:00:28.156 In the first inning, and I want to do one 0:00:28.196 --> 0:00:32.036 hundred bucks on a parlay. That's obviously me many months 0:00:32.076 --> 0:00:37.076 ago at a newish casino in Vegas called Circa, placing 0:00:37.116 --> 0:00:40.476 my very first two sports bets. I bet that yes, 0:00:40.916 --> 0:00:42.876 someone would score in the first inning of the A's 0:00:42.996 --> 0:00:46.396 Yankees game, and I placed a parlay bet on the 0:00:46.396 --> 0:00:49.076 seventy six ers the A's and the Denver Nuggets. Thank 0:00:49.076 --> 0:00:52.636 you very much. I'd only just started to figure out 0:00:52.636 --> 0:00:56.196 sports gambling. I downloaded Fan Duel and DraftKings on my 0:00:56.236 --> 0:00:59.476 phone at home in California, but they wouldn't accept my bets. 0:01:00.196 --> 0:01:03.156 That's how I discovered that sports betting was illegal in California, 0:01:03.636 --> 0:01:07.036 which in and itself was weird. For years, I'd been 0:01:07.036 --> 0:01:10.036 bombarded with ads on my home television trying to get 0:01:10.076 --> 0:01:13.076 me to make some sports bet with fan Duel and DraftKings, 0:01:13.676 --> 0:01:15.996 but the moment I tried to do anything, they told 0:01:16.036 --> 0:01:18.556 me it was against the law. Anyway, I just flown 0:01:18.596 --> 0:01:21.196 to Vegas because if you want to gamble, where else 0:01:21.196 --> 0:01:23.996 are you gonna go? I'm a calm better I'm not 0:01:23.996 --> 0:01:26.236 gonna cheer. I got ice wear in my veins, and 0:01:26.996 --> 0:01:30.396 I just care about my process right, and my process 0:01:30.476 --> 0:01:33.556 is good. It's pulling my bets out of my ass. 0:01:33.956 --> 0:01:34.876 That's my process. 0:01:36.876 --> 0:01:40.196 As always. I'm with LJ, my producer, who at that 0:01:40.316 --> 0:01:42.836 moment was still as innocent about the world of gambling 0:01:42.876 --> 0:01:46.556 as I was. It'll be months before she transforms herself 0:01:46.556 --> 0:01:50.196 into a mule for professional sports gamblers and quickly gets 0:01:50.236 --> 0:01:54.276 her bets rejected from all sorts of sports books. We're 0:01:54.316 --> 0:01:56.956 just standing in this sunken theater staring at twenty different 0:01:56.996 --> 0:02:01.236 sports being played on enormous screens. Outside. Circa had built 0:02:01.316 --> 0:02:06.516 huge swimming pools beneath another gigantic screen. Out there. You 0:02:06.556 --> 0:02:09.916 can float and drink and watch your money vanish. If 0:02:09.956 --> 0:02:11.876 you were sitting there with us inside the Circus Sports 0:02:11.916 --> 0:02:15.516 book and you knew nothing about sports gambling, you might 0:02:15.556 --> 0:02:17.276 think that you were right smack in the middle of 0:02:17.316 --> 0:02:21.876 the sports gambling industry. And obviously I knew nothing but 0:02:21.956 --> 0:02:24.156 my bet that someone would score in the first inning 0:02:24.156 --> 0:02:26.636 of the age Yankees game. So we're one swing away 0:02:26.636 --> 0:02:29.876 from going to collect it was still looking pretty good. 0:02:31.756 --> 0:02:34.676 Oh oh, don't do this, Oh my god. 0:02:34.716 --> 0:02:39.316 It happened. Oh no, I lost. 0:02:39.956 --> 0:02:40.876 How did this happen? 0:02:41.756 --> 0:02:42.756 How did this happen? 0:02:43.716 --> 0:02:44.556 How did this happen? 0:02:45.076 --> 0:02:46.276 You jaxed me. 0:02:47.076 --> 0:02:49.396 You came here and you jaxed me. I was supposed 0:02:49.436 --> 0:02:53.316 to win and you came your presence, isn't it. 0:02:53.316 --> 0:02:53.716 It's like. 0:02:55.436 --> 0:02:57.516 On the other hand, on the other hand, there's several 0:02:57.556 --> 0:03:00.956 lining here. John's point out, my parlay is looking better 0:03:02.356 --> 0:03:06.196 in Vegas. Hope dies hard. Three different games in two 0:03:06.236 --> 0:03:08.756 different sports needed to break my way for my parlay 0:03:08.796 --> 0:03:12.596 to win, in which case my one hundred dollars would 0:03:12.636 --> 0:03:16.436 turn into over twelve hundred. 0:03:16.876 --> 0:03:18.436 Yeah, we're in to parlay. That would be a big deal. 0:03:29.036 --> 0:03:32.636 I'm Michael Lewis, and this is against the rules, and 0:03:32.676 --> 0:03:35.116 you're gonna have to forgive me my ignorance for a minute, 0:03:35.356 --> 0:03:38.756 because I was just getting started. I didn't know that 0:03:38.836 --> 0:03:41.436 a parlay was the dumbest sports bet you could make, 0:03:42.236 --> 0:03:43.876 nor did I know that if you want to see 0:03:43.876 --> 0:03:46.836 the future of sports gambling in America, the last place 0:03:46.916 --> 0:03:50.236 to be was a Vegas casino. That Vegas was a 0:03:50.276 --> 0:03:53.316 sort of PG thirteen, and all the adult stuff was 0:03:53.316 --> 0:03:57.716 in other states. And I had no idea why California 0:03:57.716 --> 0:04:00.356 of all places, was banning an activity that was now 0:04:00.396 --> 0:04:03.156 legal in most other states. But I was about to 0:04:03.196 --> 0:04:18.676 find out. Way back in two thousand and eight, during 0:04:18.676 --> 0:04:22.316 the Global financial crisis, I remember thinking how weird it 0:04:22.516 --> 0:04:25.436 was that it played out so differently from country to country. 0:04:26.516 --> 0:04:29.036 In the years leading up to the event, every developed 0:04:29.076 --> 0:04:32.956 country was subjected to the same temptation. Everyone was basically 0:04:33.076 --> 0:04:35.636 left alone in a room with a giant pile of money. 0:04:36.516 --> 0:04:39.076 But what people wanted to do with that money differed 0:04:39.076 --> 0:04:42.356 from country to country. The Irish wanted to create an 0:04:42.356 --> 0:04:46.836 insane commercial real estate boom. Iceland's three hundred thousand citizens 0:04:47.076 --> 0:04:50.036 wanted to have three of the world's biggest banks. The 0:04:50.076 --> 0:04:53.036 Greeks turned their state into a pinata for its citizens 0:04:53.076 --> 0:04:55.636 to whack at. It was like you could go from 0:04:55.636 --> 0:04:58.956 place to place and see how these cultures differed by 0:04:58.996 --> 0:05:04.556 their financial kinks. One country's yuck was another's yum. You 0:05:04.556 --> 0:05:06.276 can see the same sort of thing right now in 0:05:06.316 --> 0:05:11.196 the United States with sports gambling. Since twenty eighteen, when 0:05:11.196 --> 0:05:14.236 the Supreme Court ruled that states could legalize sports gambling, 0:05:14.756 --> 0:05:19.516 every state has struggled with this new temptation. Actually, most 0:05:19.516 --> 0:05:23.196 haven't struggled very much, But as I'm recording this, eleven 0:05:23.276 --> 0:05:28.356 states are still holding out against legalization. My own state, California, 0:05:28.796 --> 0:05:34.676 but also Texas, Idaho, Utah, Minnesota, Alabama, Georgia, Oklahoma, Alaska, 0:05:34.756 --> 0:05:39.556 South Carolina, and Hawaii. These sports gambling holdouts are each 0:05:39.636 --> 0:05:42.876 kind of cool in their own way. No two are 0:05:42.916 --> 0:05:48.796 exactly alike, but many share a similar reservation, a moral reservation. 0:05:49.796 --> 0:05:54.076 Our focus was on addictive behaviors of moral issues in general, 0:05:54.116 --> 0:05:58.996 but particularly addictive behavior's alcohol, tobacco, gambling, marijuana, those kinds 0:05:58.996 --> 0:05:59.436 of things. 0:06:00.276 --> 0:06:04.796 That's Reverend Joe Godfrey, a lobbyist for Alabama's many Southern 0:06:04.836 --> 0:06:08.436 Baptist churches and a leading opponent of sports gambling in 0:06:08.476 --> 0:06:12.276 southern state. What does the Bible have to say about 0:06:12.316 --> 0:06:13.476 gambling specifically? 0:06:14.276 --> 0:06:16.316 First of all, gambling is a part of the get 0:06:16.396 --> 0:06:20.916 rich or get something for nothing mentality, a get rich 0:06:21.076 --> 0:06:24.476 quick syndrome that characterizes our culture today. But one of 0:06:24.516 --> 0:06:27.556 the Ten Commandments says in Exodus twenty verses three and 0:06:27.756 --> 0:06:29.996 three and five, but in verse three particularly you shall 0:06:30.036 --> 0:06:32.636 not you shall have no other gods before me. 0:06:33.876 --> 0:06:35.676 When you're looking for something to tell you what you 0:06:35.796 --> 0:06:38.516 can't do, there's, of course no book is useful as 0:06:38.556 --> 0:06:41.596 the Bible, but even I was a little surprised by 0:06:41.596 --> 0:06:44.116 how many ways the Bible tells you not to gamble, 0:06:44.716 --> 0:06:46.236 and so I've had to leave out most of the 0:06:46.276 --> 0:06:49.156 reverend speech on the subject. But he ended with this 0:06:50.036 --> 0:06:50.956 the fourth principle. 0:06:50.996 --> 0:06:54.876 Gambling is a form of covetousness and greed. But the 0:06:54.916 --> 0:06:57.516 Bible says in Exodus twenty, verse seventeen, you shall not 0:06:57.556 --> 0:07:00.796 covet your neighbor's house. You shall not covet your neighbor's wife, 0:07:00.916 --> 0:07:03.316 or his male servant, or his female servant, or his ox, 0:07:03.396 --> 0:07:05.716 or his donkey, or anything that is your neighbors. That's 0:07:05.796 --> 0:07:09.956 almost half of the ten commandments that address the issues 0:07:09.996 --> 0:07:11.116 related to gambling. 0:07:12.676 --> 0:07:14.756 I sort of think that you should just feel what 0:07:14.796 --> 0:07:18.276 you feel for your neighbors donkey. But enough people in 0:07:18.316 --> 0:07:21.556 Alabama believe what Reverend Joe Godfrey believes. That he won 0:07:21.636 --> 0:07:25.996 his first skirmish with fan Duel and DraftKings, the lobbyist 0:07:26.036 --> 0:07:28.916 for DraftKings got so irritated that he named his fantasy 0:07:28.996 --> 0:07:33.796 sports team doctor Joe Gottfrey. The Southern Baptist fought and 0:07:33.836 --> 0:07:36.876 won battles not just in Alabama, but also in Georgia 0:07:36.956 --> 0:07:41.196 and South Carolina. In Utah, the Mormon Church has prevented 0:07:41.236 --> 0:07:44.516 sports gambling on religious grounds. But to me, the Mormons 0:07:44.516 --> 0:07:47.756 feel different. The Mormon Church just runs the show in 0:07:47.876 --> 0:07:50.236 Utah and no one really argues much about whether they 0:07:50.236 --> 0:07:52.796 should drink Coca cola or have thirty nine children, and 0:07:52.836 --> 0:07:55.916 somehow that all works for them. The Mormons, of course, 0:07:55.916 --> 0:07:58.676 would love to convert you, when when that fails, they 0:07:58.716 --> 0:08:01.196 sort of leave you alone and maybe even speed you 0:08:01.276 --> 0:08:05.996 along your journey to hell. For decades, Mormons basically ran 0:08:06.116 --> 0:08:09.756 the money into Vegas casinos, and that was fine as 0:08:09.756 --> 0:08:14.396 long as they did in themselves gamble. Southern Baptists aren't 0:08:14.476 --> 0:08:18.236 like that. They're surrounded by people who don't share their views, 0:08:18.956 --> 0:08:22.636 and they want to stop everyone from gambling. That's a 0:08:22.676 --> 0:08:27.316 way bigger lift. Do you have any sense of where 0:08:27.316 --> 0:08:30.116 this is headed if you had to bet where Alabama 0:08:30.276 --> 0:08:32.236 law is going to be ten or fifteen years in 0:08:32.236 --> 0:08:32.676 the future. 0:08:33.636 --> 0:08:37.316 First of all, the gambling forces never stop. They come 0:08:37.356 --> 0:08:40.396 back every year. And what happens is a lot of 0:08:40.516 --> 0:08:43.596 Christians and churches begin to get weary of the battle. 0:08:43.876 --> 0:08:45.636 And that's another thing I have to remind that the 0:08:45.676 --> 0:08:48.116 Bible tells us do not grow weary in doing what 0:08:48.276 --> 0:08:51.516 is good and doing what is right. But the fact 0:08:51.556 --> 0:08:55.076 is that churches get tired of the fight. Gambling crowd 0:08:55.716 --> 0:08:56.476 never gets tired. 0:08:57.716 --> 0:09:01.756 The sound you hear in that voice, that's resignation. He 0:09:01.876 --> 0:09:04.596 knows he's going to lose. The Wall Street analysts I 0:09:04.636 --> 0:09:07.636 talk to who follow the industry think Alabama will legalize 0:09:07.676 --> 0:09:11.716 sports gambling in the next year or two. Anyway, the 0:09:11.716 --> 0:09:14.756 Southern Baptists aren't the main story here because the main 0:09:14.836 --> 0:09:18.796 story is no longer really about morality. It's about money. 0:09:19.916 --> 0:09:22.916 More than one hundred million Americans are still being denied 0:09:22.996 --> 0:09:26.796 legal access to the new sports gambling apps. The vast 0:09:26.836 --> 0:09:30.636 majority live in states without any obvious moral reservations to gambling. 0:09:31.956 --> 0:09:37.356 What they have instead are actual reservations blasting ads like this. 0:09:37.996 --> 0:09:42.836 Discover your perfect combination at Batana Resort Casino where you 0:09:42.916 --> 0:09:55.076 can rock and roll. 0:09:55.116 --> 0:09:58.716 There's a very long story about how casino gambling came 0:09:58.756 --> 0:10:03.076 to Indian reservations. It's too good to totally ignore, but 0:10:03.156 --> 0:10:04.916 let me just give you the short version of it. 0:10:05.596 --> 0:10:08.116 If you had all these different little Bengal halls, so 0:10:08.356 --> 0:10:12.156 tribes were sort of able to offer that without any 0:10:12.516 --> 0:10:15.596 outside regulation, or if it was illegal in the state, 0:10:15.836 --> 0:10:16.996 tribes could still offer it. 0:10:18.276 --> 0:10:20.916 That's Steve Ruddick, who writes a newsletter on the sports 0:10:20.956 --> 0:10:23.916 gambling industry, and he says no one paid the tribes 0:10:23.996 --> 0:10:27.116 much attention at first, but in the early nineteen eighties, 0:10:27.396 --> 0:10:32.196 the reservation's bingo games became bingo machines, and the bingo 0:10:32.276 --> 0:10:36.036 machines were basically slot machines. O kis, do you have 0:10:36.076 --> 0:10:39.476 any idea what tribe first put the slot machine in 0:10:39.516 --> 0:10:40.196 the bingo hall. 0:10:41.036 --> 0:10:42.916 I'm going to draw a blank onto the tribe. But 0:10:42.956 --> 0:10:45.396 it was in Minnesota, and it was like bingo machines 0:10:45.436 --> 0:10:48.436 in someone's garage on the reservation. This stided to get 0:10:48.516 --> 0:10:50.116 legal challenges. 0:10:50.356 --> 0:10:54.836 Actually more than legal challenges and more than just Minnesota. 0:10:54.956 --> 0:10:57.716 In Florida, a local sheriff threatened the Seminole tribe with 0:10:57.836 --> 0:11:01.036 force unless they shut down the bingo games. There was 0:11:01.076 --> 0:11:04.996 also some fighting in California and Michigan. Lawsuits filled the air. 0:11:05.836 --> 0:11:09.236 One reached the Supreme Court in nineteen eighty seven. The 0:11:09.276 --> 0:11:12.596 Supreme Court ruled that states couldn't prevent the Native Americans 0:11:12.596 --> 0:11:15.556 from doing anything on their own reservations that was legal. 0:11:15.636 --> 0:11:20.756 Off the reservations. A pattern soon emerged. The federal government, 0:11:20.876 --> 0:11:24.556 responsible for giving financial support to tribes, tended to smile 0:11:24.676 --> 0:11:27.756 upon activities that might reduce the need for that support. 0:11:28.756 --> 0:11:32.036 State and local governments tended to frown on activities such 0:11:32.036 --> 0:11:35.356 as gambling, that might transfer money from their coffers to 0:11:35.396 --> 0:11:39.276 the tribes. In nineteen eighty eight, Congress finally passed a 0:11:39.356 --> 0:11:43.636 law Indian tribes could offer bingo without asking for permission. 0:11:44.276 --> 0:11:46.716 If they wanted to open a casino, they needed to 0:11:46.716 --> 0:11:49.956 cut a deal with the state, and so tribes began 0:11:49.996 --> 0:11:53.916 to cut deals with the states. One odd fact, there 0:11:53.956 --> 0:11:57.196 was only the loosest correlation between where Native Americans received 0:11:57.196 --> 0:12:00.596 a license to open a casino and where Native Americans 0:12:00.716 --> 0:12:06.036 actually lived. Connecticut has huge tribal casinos, but not very 0:12:06.036 --> 0:12:10.116 many Native Americans. Alaska has a lot of Native Americans, 0:12:10.556 --> 0:12:11.836 but hardly any casinos. 0:12:12.756 --> 0:12:15.236 Well, it turns out that a lot of tribes are 0:12:15.276 --> 0:12:20.156 pretty sharp, and ninety two you got Foxwoods, So all 0:12:20.156 --> 0:12:22.236 these tribes suddenly were like, hey, you know what, people 0:12:22.276 --> 0:12:25.036 are going to travel these casinos. Then you started getting 0:12:25.036 --> 0:12:27.316 commercial casinos also coming into the fold. 0:12:27.516 --> 0:12:28.276 Some have both. 0:12:28.636 --> 0:12:31.796 And how big has this been for the tribes huge. 0:12:32.156 --> 0:12:34.276 One of my favorite stories to tell about this is 0:12:34.436 --> 0:12:35.796 the sand Manuel Tribe. 0:12:36.436 --> 0:12:39.556 The sand Menuel Tribe resides just outside of Los Angeles. 0:12:39.876 --> 0:12:44.756 They're basically one of the biggest tribal casinos in the country, 0:12:44.916 --> 0:12:50.116 like billions of dollars of revenue. Before that, doctors used 0:12:50.116 --> 0:12:53.396 to ride in on horseback to the reservation to give 0:12:53.596 --> 0:12:57.116 kids their vaccines for free. So now this tribe is 0:12:57.156 --> 0:13:02.476 now making billions of dollars over the years they donated 0:13:02.556 --> 0:13:07.116 to that hospital that was doing That's that's the difference 0:13:07.156 --> 0:13:08.476 of it. 0:13:09.316 --> 0:13:11.396 Sense is that they were granted this right because the 0:13:11.436 --> 0:13:13.476 people who granted them this right didn't think it was 0:13:13.956 --> 0:13:14.716 that valuable. 0:13:15.116 --> 0:13:19.956 Yeah, exactly when it happened, it wasn't expected to be 0:13:20.036 --> 0:13:20.556 what it is. 0:13:22.836 --> 0:13:25.356 The same thing that happened in California also happened in 0:13:25.396 --> 0:13:29.836 the least likely places. In Oklahoma. The Chickasaw Nation opened 0:13:29.876 --> 0:13:32.796 a casino on the Texas border that soon became the 0:13:32.796 --> 0:13:36.836 biggest in the world and effectively controlled the Texas market. 0:13:37.716 --> 0:13:40.596 In Florida, the Seminole seized control of gambling in the 0:13:40.716 --> 0:13:44.316 entire state, but then came the Supreme Court ruling of 0:13:44.356 --> 0:13:49.796 twenty eighteen that allowed states to legalize sports gambling, and 0:13:49.876 --> 0:13:53.796 the lobbyists for fandueling DraftKings were suddenly everywhere. 0:13:54.916 --> 0:13:59.796 These companies, backed by Wall Street, basically swooped into California. 0:13:59.836 --> 0:14:02.236 I think, kind of confident that they could do what 0:14:02.276 --> 0:14:03.516 they did in every other state. 0:14:04.196 --> 0:14:07.596 That's Gus Garcia Roberts of the Washington Post, who covered 0:14:07.636 --> 0:14:10.316 the first battle in this new war war. That was 0:14:10.356 --> 0:14:13.636 back in twenty twenty two when fan Duel and DraftKings 0:14:13.636 --> 0:14:17.236 and some other sports gambling companies sponsored a California ballot 0:14:17.276 --> 0:14:20.036 proposition to legalize mobile sports betting. 0:14:20.876 --> 0:14:24.796 I love the name of the proposition that these companies 0:14:26.116 --> 0:14:29.076 ultimately pushed forward, which is I haven't written down here. 0:14:29.116 --> 0:14:32.916 It's Californians for Solutions to Homelessness and Mental Health support 0:14:33.316 --> 0:14:37.156 a coalition of housing and mental health experts, concern tax payers, 0:14:37.476 --> 0:14:40.676 and digital sports, entertainment and gaming companies. 0:14:41.076 --> 0:14:45.596 For Permanent Solutions to homelessness, mental health, and addiction in California. 0:14:45.916 --> 0:14:49.996 Prop twenty seven supports financially disadvantaged tribes that don't own 0:14:49.996 --> 0:14:51.356 big casinos. 0:14:52.356 --> 0:14:54.676 What were we actually voting on when we were voting 0:14:54.716 --> 0:14:55.556 on this proposition? 0:14:56.076 --> 0:15:00.276 So what you were actually voting on was the legalization 0:15:00.356 --> 0:15:02.476 of mobile sports betting in the state. There would have 0:15:02.476 --> 0:15:06.996 been minimal kind of involvement of California tribes. These companies 0:15:07.556 --> 0:15:11.876 had it was kind of an ingenious strategy in order 0:15:11.956 --> 0:15:18.436 to I guess divide the tribes. Their proposition would have 0:15:18.476 --> 0:15:21.756 benefited some of the smaller tribes that are not near 0:15:21.876 --> 0:15:24.916 cities and so did not have very lucrative gaming operations, 0:15:26.796 --> 0:15:30.036 and and so it would have made California like any 0:15:30.076 --> 0:15:31.916 of the other states where you can just kind of 0:15:32.116 --> 0:15:35.596 gabble on sports on your phone. Everybody I spoke to 0:15:36.156 --> 0:15:39.556 they were just moved by commercials that they thought were 0:15:39.596 --> 0:15:41.876 for a proposition that was going to finally do something 0:15:41.876 --> 0:15:46.516 about homelessness or you know, mental health. 0:15:46.876 --> 0:15:50.436 Twenty seven means getting people off the streets and into housing. 0:15:50.916 --> 0:15:52.156 Yes on twenty seven. 0:15:54.196 --> 0:15:55.916 There was one guy who I spoke to who was 0:15:55.956 --> 0:15:59.156 a truck driver and he was passing through California and 0:15:59.196 --> 0:16:03.436 he was just saddened by the homelessness situation. And then 0:16:03.476 --> 0:16:05.436 he was in his motel room and he saw the 0:16:05.516 --> 0:16:09.316 ad and he decided to contribute what he could. 0:16:09.596 --> 0:16:09.836 To me. 0:16:09.956 --> 0:16:13.516 That really encapsulated the confusion around these ballot measures. 0:16:13.756 --> 0:16:18.476 Not just confusion duplicity. It's sort of like FanDuel draving. 0:16:18.876 --> 0:16:21.796 They're foul hooking donors by persuading them that they're doing 0:16:21.836 --> 0:16:23.316 something other than what they're doing. 0:16:23.996 --> 0:16:27.076 Right, And it's not like those companies were reliant on 0:16:27.116 --> 0:16:29.356 one hundred dollars from the truck driver. But it really 0:16:29.396 --> 0:16:34.436 showed how they were trying to, you know, essentially, if 0:16:34.476 --> 0:16:38.116 not mislead, at least hoodwing Californians into not really knowing 0:16:38.156 --> 0:16:40.556 the true purpose of these propositions. 0:16:41.156 --> 0:16:44.956 But Proposition twenty seven did not go unopposed. From the 0:16:44.996 --> 0:16:48.116 moment the lobbyists from FanDuel and DraftKings massed along the 0:16:48.156 --> 0:16:52.476 California border, they'd been spotted by Indian Scouts because the 0:16:52.556 --> 0:16:55.636 tribes knew from bitter experience that the white man had 0:16:55.676 --> 0:16:58.396 a gift for what the white man called Indian giving. 0:16:59.396 --> 0:17:01.796 We want this thing in perpetuity. 0:17:01.116 --> 0:17:01.676 You know what I mean. 0:17:02.396 --> 0:17:05.876 That's Victor Rocha, conference chairman of the Indian Gaming Association. 0:17:06.556 --> 0:17:09.396 Hey, listen, if the Indians from one hundred years ago 0:17:09.396 --> 0:17:11.596 would have had the lawyers we had, you know what 0:17:11.636 --> 0:17:14.076 I mean, it'd be a whole different story in America. 0:17:14.476 --> 0:17:16.516 We would be instead of bows and arrows, we'd be 0:17:16.556 --> 0:17:20.036 checking attorneys. Excuse me, mister Custer. You know, mister Shinebaum, 0:17:20.156 --> 0:17:21.196 my attorney. 0:17:21.476 --> 0:17:26.396 Quivers loaded with shinebombs. The California Tribes watched and waited. 0:17:27.316 --> 0:17:30.036 We saw those pricks right on the horizon. We saw 0:17:30.076 --> 0:17:30.596 them coming. 0:17:30.836 --> 0:17:31.836 You did see them coming. 0:17:32.356 --> 0:17:35.156 We saw coming Tom all Away. It was very obvious. 0:17:35.236 --> 0:17:39.876 Because we're Native Americans, we suspect everyone and everyone. If 0:17:39.876 --> 0:17:43.596 it isn't Steve Wynn and the pricks at MGM, then 0:17:43.676 --> 0:17:48.116 it's then it's these new version of an old version 0:17:48.276 --> 0:17:51.156 of the guy. We kind of believe these guys are 0:17:51.276 --> 0:17:54.276 the same mindset. 0:17:54.756 --> 0:17:58.076 It must be odd, you know, to know that your 0:17:58.196 --> 0:18:01.196 role always is to wait for the peace treaty to 0:18:01.276 --> 0:18:05.396 be somehow violated. In this case, the California tribe saw 0:18:05.396 --> 0:18:09.796 a very specific threat. By law, their casino were confined 0:18:09.836 --> 0:18:13.276 to their reservations. If Californians were allowed to bet on 0:18:13.276 --> 0:18:17.076 their phones, no one would bother to drive to the reservations. 0:18:17.756 --> 0:18:21.556 Sports gambling was just a trojan horse. Eventually, they could 0:18:21.596 --> 0:18:25.276 imagine every Californian would have an entire casino in their pockets, 0:18:26.316 --> 0:18:30.036 a casino run out by tribes, but by FanDuel and DraftKings. 0:18:30.996 --> 0:18:32.956 These guys are like, we're not going to wait for 0:18:33.036 --> 0:18:37.156 you guys to get out of same foot. They saw 0:18:37.196 --> 0:18:40.956 it as an opportunity to screw us, and that's what happened. 0:18:41.676 --> 0:18:44.476 That's what had already happened in other states, even states 0:18:44.516 --> 0:18:50.116 with big tribal casinos. Arizona, for example, FanDuel and DraftKings 0:18:50.116 --> 0:18:53.796 talk to the Arizona legislature into handing out twenty sports 0:18:53.796 --> 0:18:58.076 gambling licenses, ten to tribes, ten to companies like FanDuel 0:18:58.116 --> 0:19:02.356 and DraftKings, and also sports teams themselves. They made it 0:19:02.396 --> 0:19:05.356 sound like a fair competition, but in no time at all, 0:19:05.476 --> 0:19:07.636 FanDuel and DraftKings routed the field. 0:19:08.516 --> 0:19:12.356 Listen, I hold DraftKings to their face. I go listen, 0:19:12.476 --> 0:19:15.236 if you come into California, we are gonna curb stomp you. 0:19:15.956 --> 0:19:18.996 And they got pissed off, you know, they because they go, no, no, 0:19:19.036 --> 0:19:19.836 we're your friends. 0:19:20.036 --> 0:19:21.836 So you didn't you didn't trust them? 0:19:22.316 --> 0:19:25.196 Oh fuck no, man, do you trust them? 0:19:25.796 --> 0:19:26.036 You know? 0:19:26.636 --> 0:19:29.916 These are the same guys that scooters for water, the 0:19:29.996 --> 0:19:34.356 scooters for land, different package, same schools. You know, it's 0:19:34.396 --> 0:19:38.396 this NBA mentality, you know what I mean. They're smarter 0:19:38.556 --> 0:19:40.876 than you. They know the future of the world. They're 0:19:40.916 --> 0:19:43.276 gonna plant it. We're just riding along. So all of 0:19:43.316 --> 0:19:46.196 a sudden they come into California and so we tell them, 0:19:46.716 --> 0:19:47.396 don't do it. 0:19:47.636 --> 0:19:50.316 Did any part of you think they're gonna be too 0:19:50.356 --> 0:19:52.156 powerful and they're gonna overwhelm us? 0:19:52.796 --> 0:19:55.996 No, No, not at all. Never had a doubt one second. 0:19:56.436 --> 0:19:58.996 You need a great villain in a story, and they 0:19:59.036 --> 0:20:02.876 were great villains in this narrative. They make great villains. 0:20:03.516 --> 0:20:07.876 That feels to me just very true. Fand and DraftKings 0:20:08.156 --> 0:20:11.996 make great villains. Why they make great villains is another matter, 0:20:12.636 --> 0:20:14.956 stick a pin in that question. We'll come back to 0:20:14.996 --> 0:20:18.596 it in a little while. Anyway, the California Tribes fought 0:20:18.596 --> 0:20:22.716 Prop twenty seven with their own ballot initiative. There's proposed 0:20:22.716 --> 0:20:27.356 limiting sports gambling to reservations. The two sides then vaporized 0:20:27.396 --> 0:20:31.716 half a billion dollars, trashing each other's propositions. After the 0:20:31.796 --> 0:20:36.516 dust settled, both propositions failed and nothing changed, which was 0:20:36.556 --> 0:20:38.876 a huge win for the Indian Gaming Association. 0:20:40.036 --> 0:20:42.876 That's why Fandel and DraftKings are so freaked out right 0:20:42.916 --> 0:20:46.756 now that that when we won, the day after, the 0:20:46.796 --> 0:20:50.316 tribes go fuck you, you're not coming into our market. 0:20:50.356 --> 0:20:53.436 The name fandel and DraftKings will not exist in this market. 0:20:54.076 --> 0:20:56.476 If you go out kind of imagine out twenty years. 0:20:56.476 --> 0:21:00.556 Can you imagine mobile sports betting in California but run 0:21:00.596 --> 0:21:01.276 by the tribes? 0:21:01.956 --> 0:21:02.156 Yes? 0:21:02.596 --> 0:21:05.836 Absolutely, and that's what they're doing in Florida. What the 0:21:05.916 --> 0:21:08.676 tribes in Florida did that freaked everybody out is the 0:21:08.716 --> 0:21:11.316 seven said, you know what, We're gonna have mobile sports betting. 0:21:11.516 --> 0:21:14.036 We're gonna have all this everything you want, but everything 0:21:14.156 --> 0:21:15.116 goes through us. 0:21:16.516 --> 0:21:19.276 It sounds good, but I'm not so sure things are 0:21:19.276 --> 0:21:23.396 gonna go Victor's way. There's something weird about this industry 0:21:23.396 --> 0:21:27.436 and something unstoppable about these two companies, FanDuel and DraftKings. 0:21:28.556 --> 0:21:31.636 There've been some skirmishes, the Indians have won a few 0:21:31.636 --> 0:21:35.876 of them, but the war that's not even close to over. 0:21:47.236 --> 0:21:49.516 In the run up to the global financial crisis, back 0:21:49.556 --> 0:21:51.716 in like two thousand and six and two thousand and seven, 0:21:52.516 --> 0:21:54.716 there was a character who was the first to see 0:21:54.756 --> 0:21:59.676 that something was off. The short seller, the character who 0:21:59.676 --> 0:22:02.876 makes us living by finding companies or whole countries to 0:22:02.916 --> 0:22:07.596 bet against. People love to hate short sellers. They seem 0:22:07.676 --> 0:22:11.316 so negative, so hostile to other people's hopes and dreams. 0:22:12.156 --> 0:22:15.956 But short sellers are also incredibly useful, more than useful 0:22:16.196 --> 0:22:19.156 necessary because you learn a lot when you think about 0:22:19.156 --> 0:22:20.156 the other side of the bet. 0:22:20.836 --> 0:22:23.116 I think we got an average price of about forty 0:22:23.156 --> 0:22:26.316 and I think we averaged exit was about fifteen. So 0:22:26.596 --> 0:22:29.236 you never get the highs of the lowest, but it 0:22:29.276 --> 0:22:30.476 was a successful position. 0:22:31.676 --> 0:22:36.156 That's Jim Chaino's maybe the world's most famous short seller. Actually, 0:22:36.236 --> 0:22:39.516 if you google world's most famous short seller, a picture 0:22:39.556 --> 0:22:42.796 of Jim Cheno's pops up. In his spare time, he 0:22:42.836 --> 0:22:45.836 teaches a course at Yale on financial fraud, which well, 0:22:45.916 --> 0:22:48.556 of course he does, and he has a track record 0:22:48.796 --> 0:22:53.316 of successfully betting against gambling companies. He did it first 0:22:53.356 --> 0:22:56.196 back in two thousand and five after a bunch of 0:22:56.236 --> 0:22:59.636 online poker sides sold stock to the public, and he 0:22:59.716 --> 0:23:01.716 read their prospectuses. 0:23:01.676 --> 0:23:04.916 And in the board of directors section there was a 0:23:04.996 --> 0:23:08.356 list of five or six people who were on the 0:23:08.356 --> 0:23:11.556 board of this particulicular online poker company, and at the 0:23:11.716 --> 0:23:14.716 very end of one of the listings it said, mister 0:23:14.796 --> 0:23:17.396 so and so is currently a fugitive from justice. 0:23:18.316 --> 0:23:21.036 Jim Chenos just loves it when the board of directors 0:23:21.036 --> 0:23:24.196 are fugitives from justice. I mean I kind of thumbed 0:23:24.196 --> 0:23:24.756 it all up. 0:23:24.876 --> 0:23:27.316