Sports Betting Is This Generation's Big Tobacco

Since the U. S. Supreme Court let states legalize betting on sports in 2018, gambling has exploded. More than half of men ages 18 to 49 say they have an active account with an online sportsbook. Want to bet on a game, a play, or even an individual performance? The bookie is always open on your phone, and it sends promo credits to keep you in the game. Young men see the harm up close. The share of men under 30 who call legal sports betting bad for society has more than doubled since 2022, to 47%. Built to be addictive, sports betting is like cigarettes—and deserves a public health response. Chapters: 00:01:02 Announcements 00:02:27 Retcon: Healthcare moral hazard vs. cost-sharing; networks and military branches 00:07:37 Terms & Conditions: Handle, the hold, and the tulip bubble 00:12:52 Big Pilcrow: Sports betting, prediction markets, and addiction 00:41:42 Executive Orders: Free museum entry for union members; kid-sized sink staircases 00:44:26 Spiritual Sponsors: Hermanos Gutiérrez; good procedural movies We are entirely listener supported! Join your Optimist donors here: https://optimisteconomy.com Video-curious? Watch clips on the Optimist Economy YouTube channel⁠⁠ https://www.youtube.com/@optimist_economy. We’re also on Instagram at ⁠⁠@optimist_economy https://www.instagram.com/optimist_economy or TikTok at ⁠⁠@optimist_economy https://www.tiktok.com/@optimist_economy. Want full video? See above about donating. Chat with other Optimists on Substack. https://substack.com/chat/4604257?utm_source=pub-nav-bar Rep your optimism with Optimist Economy merch: https://merch.ambientinks.com/collections/optimisteconomy Got economic questions, concerns, or executive orders? Send them to [email protected] mailto:[email protected]

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

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• 0:30Speaker 02

  This episode of Optimist, we will be talking about gambling and how it is an addictive behavior that many families and many individuals struggle with. If you or someone you know is struggling with a gambling problem, confidential help is available now. You can reach out to the National Problem Gambling Helpline by call or texting 1-800-MYRESSET or visiting Gamblers Anonymous. Hello and welcome to Optimist Economy. I'm economist Catherine Ann Edwards.

• 1:01Robin Rauzi?

  I'm editor Robin Rousey.

• 1:03Speaker 02

  On this show, we believe the US economy can be better, and we talk about how to get there, one problem and solution at a time.

• 1:15Robin Rauzi?

  If you're listening on the first day this episode is available, it's election day. This is the day when we all place big bets on the future of our entire country. So today, we are going to very fittingly talk about gambling.

• 1:28Speaker 02

  I see what you did there. Bets on the future of the country.

• 1:31Robin Rauzi?

  Clever. All right, a couple of announcements.

• 1:33Speaker 02

  Yeah, thank you, everyone who has sent in your Thanksgiving questions. Honestly, the context is helpful. The people have sent in different situations. I have a couple of favorites so far.

• 1:43Robin Rauzi?

  Don't, no spoilers.

• 1:46Speaker 02

  Okay, well, I'll just stop talking. Anyway, email [email protected], subject line Thanksgiving, and tell us what you need help with at the Thanksgiving table. As we mentioned last week, we will win. You're going to win Thanksgiving. Optimist is here for you.

• 2:05Robin Rauzi?

  Yeah, yeah. I also wanted to say to everyone that Optimist Economy is currently the number one show in the government category on Apple Podcasts. Now, I think that is a lot like winning the Grammy Award for Best Liner Notes, you know, but we'll take it. There are apparently like 180,000 active podcasts just on Apple Podcasts, so help us stand out. And you can do that by, if you're listening to the show and you like it, rating it on Apple Podcasts. If you don't like it, I don't know why you're listening, you have other options. Finally, it's the end of our year, which is a great time to make a donation to Optimist Economy to make sure that we can keep this tire fire burning. And by the

• 2:46Robin Rauzi?

  way, Optimist Economy is a 501(c)(3) nonprofit. That makes us eligible for matching funds, say, from your employer. We can also take donations from your donor-advised fund. Redcon, again, if you're new here, we're sorry, you are joining us midstream, but Redcon is where we talk about things that we didn't get around to in the last episode or things that we've learned since.

• 3:10Speaker 02

  Yes, and this is really my home for you new listeners, where we go through and correct things.

• 3:18Robin Rauzi?

  I was just, I have a big blank square next to Redcon.

• 3:24Speaker 02

  So I wanted to bring up two things. One is, on our healthcare episode, we got the one-star review, and then we mocked the one-star review, and then someone wrote in the subscriber chat that we did not

• 3:37Robin Rauzi?

  We inappropriately mocked that.

• 3:38Speaker 02

  We had inaccurately characterized what the one-star review's issue was, which does have some veracity behind it. So it is possible that in mocking people who actively think that we are bad at this, that I was bad at it. I was imprecise. I was imprecise. So there's two things going on. The whole review was about whether or not it makes sense to make healthcare free to consume, which is what we talked about on the show, is what we think we need of our new universal public health insurance system, Americare's.

• 4:11Robin Rauzi?

  Wait, we should just say, that's not a real system, that's just something that we named.

• 4:16Speaker 02

  We made up. We made up. It's going to be great, but we made it up. Okay. So what the review kind of focused on was that if you don't have out-of-pocket costs like copays in a healthcare system and people have some type of skin in the game, they will consume more healthcare. So if you have two versions of the world, one in which every time you go to the doctor, you're charged like 20 or 30 bucks, and one in which you're charged nothing, the people in the charged-nothing world will go to the doctor more, and the people in the being-charged world will go to the doctor less. This is a very stable finding. It's been replicated in lots of places. When you charge for healthcare, people consume less healthcare. Now, in like the perfect theoretical world, this is a way

• 4:59Speaker 02

  to almost like prioritize and triage healthcare because people only go if it's serious. But in the real world where we live, it just means that poor people or people struggling economically are less likely to go to the doctor when they need to. And so even though it reduces healthcare consumption, it does not reflect your actual health to the degree that it should. It kind of does, but it doesn't really. You basically get a lot of poor people who don't go to the doctor.

• 5:26Robin Rauzi?

  One of the things that Amy Finkelstein's book pointed out was that even when you try to ration care in that way, that most systems eventually open up back doors for all those people to get care, and you don't wind up with the savings that you think you're going to get.

• 5:43Speaker 02

  The further step from if you charge for healthcare, people consume less, is if you don't charge, people sabotage their health because they won't be financially penalized for it. And that is the moral hazard argument. And so the moral hazard argument is like going to the doctor's free, so I'm going to smoke. Like, it's a, they're two different things, and I kind of conflated them in mocking the one-star review, but they are two different things. Here's the important part, they're both bad. So they're both, they're both like, okay, heard objection, we're moving on and everyone gets healthcare, kind of response. That was my first Redcon, is I was a little sloppy when I conflated those, and they're two different things.

• 6:25Robin Rauzi?

  Okay.

• 6:26Speaker 02

  Okay. Second one is, we talked about in the immigration episode about, like, it's not random which jobs people hold. It reflects their preferences and their networks and so on. I don't know if I explained networks as well as I wanted to, but actually, one place where it's really easy to see the power of networks in career trajectories is in the racial and ethnic distribution of the armed services. So we have branches of military service that are not the same demographically.

• 6:58Robin Rauzi?

  Right.

• 7:00Speaker 02

  So the Army has the highest share of black service members.

• 7:04Robin Rauzi?

  Soldiers.

• 7:04Speaker 02

  Yeah, relative to, I think the Navy has the highest share of Asian service members. And then the Marines are like 30% Hispanic. There's a massive drop between the share of Marines that are Hispanic versus, say, the share of the Army versus the Navy versus the Air Force. Like, there are massive racial disparities, and that's because recruiting networks into the armed services, you're going to rely on family, friends, neighbors, those aspects of community. And the same thing happens in jobs, where you just, you have networks and you have communities and pipelines, and so you have people kind of ending up more likely to be on a path because of networks. I realized after the fact, the armed services might be a good way to explain it.

• 7:41Robin Rauzi?

  Yeah, that is, and just for the context, we were talking about why immigrants are disproportionately represented in certain fields and occupations. Right.

• 7:51Speaker 02

  Yeah. Yeah, I mean, you get jobs through networks. I mean, it was how I got one of my first jobs. Actually, my first three jobs, I got through a friend of like, there's a place, there's a job opening up where I work, you should apply, I'll tell them you apply. Those are my first three jobs.

• 8:06Robin Rauzi?

  Okay, next chapter, terms and conditions. This is an actual thing I had to look up. So again, we're going to talk about gambling, and I know nothing about gambling. So I kept reading this word, handle. So the term handle in reference to gambling is the total amount of money that has been wagered by all bettors. Now, this is usually referred to like as, say, the total handle on the Super Bowl, right? That's how much money's been bet on the Super Bowl. But I also came across it in terms of the handle in the United States on sports betting. So for instance, in 2013, before sports betting was legal, the total

• 8:45Robin Rauzi?

  handle was about $13 billion. In 2025, the total handle was $166.94 billion.

• 8:56Speaker 02

  Holy [bleep]. Sorry.

• 8:59Robin Rauzi?

  Yeah, a lot of money, a lot of money. Related to the handle is the hold, which I didn't put in here, but the hold is basically the take of the betting company. It's usually about 10-ish percent. And then here's a condition for terms and conditions. There are still 11 states that have no sports betting, and I was surprised to find out both Texas and California, no online sports betting.

• 9:24Speaker 02

  Look at us.

• 9:24Robin Rauzi?

  Yeah, it's kind of why people think the market could still double in size.

• 9:28Speaker 02

  Oh, look at us.

• 9:30Robin Rauzi?

  Yeah, yeah.

• 9:31Speaker 02

  Big.

• 9:34Speaker 02

  We big, we bad.

• 9:37Robin Rauzi?

  Okay, over to you.

• 9:39Speaker 02

  Yeah, so mine, just to also give you a handle of where this is going, the term that I wanted to define was a speculative asset bubble.

• 9:49Robin Rauzi?

  Okay.

• 9:50Speaker 02

  Sometimes just called a bubble, sometimes called an asset bubble, and how we often shorten it to is just a bubble, is really just price exceeds value, really to an excessive degree. So you have the value of whatever the thing is, the object, the company, and then you have the price relative to that value. So a bubble is just the difference between them.

• 10:13Robin Rauzi?

  I guess I always hear of this as like a stock market bubble.

• 10:16Speaker 02

  You can have a bubble on lots of things. So the first speculative asset bubble that we know of, and we're pretty sure, is the tulip bubble. This was in 1634. The price of tulip bulbs exploded. Have you heard of the tulip bubble?

• 10:33Robin Rauzi?

  Of course, yeah, but it's always just pointed to as this like mass hysteria.

• 10:37Speaker 02

  Okay, so this is where I got really deep of like, I told you, I went down a really deep rabbit hole, because I also thought it was mass hysteria, but it turns out that wasn't the case. So in the late 1500s, early 1600s, after Holland has broken free from Spain, they become, I mean, like, really like geniuses of finance and international trade. They're a very wealthy country, and they have lots of like, very wealthy, basically like corporate and merchant class. And one of the kind of luxury items they bring to the country is tulips.

• 11:08Robin Rauzi?

  They brought them from somewhere else?

• 11:10Speaker 02

  Mm hmm. They're not native to Holland. So the tulip becomes like a luxury good, because they're often used in still life paintings, which were very popular at the time. So it was not so much mass hysteria, but rather like, a group of really wealthy people started to speculate on these tulip bulbs, because some of them had a virus that caused the tulip to be multicolored. They're quite unique and pretty. So they ended up coming up with this system of contracts, where rather than actually physically buy the bulb, you could buy a contract for the bulb at the end of the season. And this contract ends up becoming the source of speculation, where it's like, you know, I'll pay $5 for this bulb in three months. Well, I'll pay 10. So as it becomes a luxury status symbol,

• 11:52Speaker 02

  it then starts to attract, like, basically traders to flip these bulbs, which are just at this point, a piece of paper. And they do this for like, three seasons. And at the end of the third growing season, the bubble burst.

• 12:05Robin Rauzi?

  So they don't actually want the tulips, they want the bulbs?

• 12:08Speaker 02

  They want the bulbs.

• 12:09Robin Rauzi?

  But they will know that the bulbs produce this particular strain, but only after they bloom? So that's why you have to, you want to buy them in the future, but only after they've bloomed?

• 12:19Speaker 02

  I, no, I think that they just, it was more that like, because they were luxury items that were a status symbol for very wealthy, this leads to intense speculation, and then eventually the bubble burst. I think the misconception is that this was a broad

• 12:34Robin Rauzi?

  Yeah, broad, widespread.

• 12:35Speaker 02

  Economy-wide effect, or, yeah, or that it like, brought down the Dutch economy. Those things aren't true. I think it was just a small group of wealthy people who, they didn't have their wealth tied up in it. It was just something that was worth a lot that fell in value. So that is a speculative asset bubble. As I'm explaining this, I'm sure a lot of people are like, oh, so that describes a lot.

• 12:57Robin Rauzi?

  It describes a lot of things, yeah.

• 12:58Speaker 02

  It describes a lot of things in our economy right now, of the price of something cannot be justified by its value.

• 13:06Speaker 02

  Note from production, Sophie wants us to know that this particular asset bubble should be called a bulbul. Bulbul.

• 13:15Robin Rauzi?

  Okay, we're gonna take a dramatic pause, and then we'll be back to talk about gambling.

• 13:22Robin Rauzi?

  We're back.

• 13:23Speaker 02

  From our dramatic pause.

• 13:24Robin Rauzi?

  From our dramatic pause for the big Pilcrow.

• 13:28Speaker 02

  Which is about gambling. I've wanted to talk about gambling. It was one of the, it was one of the episodes we thought about doing before we even recorded our first episode, was to talk about gambling. In part because I just, for not knowing that much about the actual details of gambling, I find gambling as a social ill to be so fascinating and sad. And the way that I would have described it to someone would be like the subprime crisis ran into the fentanyl crisis. Because it is combining addiction and finance.

• 14:02Robin Rauzi?

  Right.

• 14:03Speaker 02

  In a, we could have stopped it from happening, but at the end, we will blame them, kind of way.

• 14:09Robin Rauzi?

  You're particularly talking about betting gambling. Do you mean specifically the addition of sports betting to the landscape of gambling?

• 14:18Speaker 02

  We use these four things somewhat interchangeably, and I think I should say that, I know that stocks are different from crypto, which are different from prediction markets, which are different from sports betting, but the problem that they create is an addiction. And so I'm gonna like, talk about them like they're all the same thing, even though they are different.

• 14:38Robin Rauzi?

  We should set the table a little bit here before we

• 14:41Speaker 02

  Yeah.

• 14:41Robin Rauzi?

  get too far into this. So in 2018, there was a Supreme Court case called Murphy versus the NCAA. And in this case, the Supreme Court overturned, it was actually a 1992 law, that was called the Professional and Amateur Sports Protection Act. That law prohibited states from allowing there to be betting on sports. And whatever that is, almost 20 years later, the Supreme Court said that that law was unconstitutional, and Samuel Alito, for instance, writing for the majority, said that it was a direct affront to state sovereignty. So very quickly, that meant that states were allowed to decide whether or not they could

• 15:22Robin Rauzi?

  have sports betting. And they went in, pretty much, a lot of them, fast and furious, and started allowing it. And so a lot of what we are seeing about gambling and the harms of gambling is coming from the huge amount of research that's been done since 2018, on what sports betting, and particularly, online sports betting, has done.

• 15:44Speaker 02

  And then part of it is, they've gotten some kind regulatory interpretation from the federal government, that, you know, allows it to be done via app. Allows you to make them online instead of in person. And this sports betting, juggernaut, is running into prediction markets. And prediction markets have existed for a long time, but now prediction markets are adding sports betting to their portfolio, because it's so lucrative. And the prediction markets are, I would say, like a cousin of sports betting, except for you're betting on all kinds of things, including like, whether

• 16:25Speaker 02

  it'll rain, or whether or not you're an active service member, and you're going to overthrow the government of Venezuela. Like, the prediction markets has a much broader range, but it's starting to include sports, which is highly lucrative.

• 16:36Robin Rauzi?

  Yeah. And prediction markets claim that they are essentially financial swaps, and are regulated loosely by the federal government. And so they are different from how sports betting is regulated, which is regulated by the states, according to the Supreme Court.

• 16:54Speaker 02

  Like, I'm really struggling to see the difference here, but like, there's a difference between a bet and like, a contract swap, and a prediction market is a contract swap, and so it's not a sports bet. And so they're able to do certain things, because the Commodity Futures Trading Commission says that it's okay to do what they're doing. It's, it's really fascinating why we are letting this happen, other than letting companies make a lot of money. Okay, so first, we're betting on like, people on a field.

• 17:23Robin Rauzi?

  Playing a game.

• 17:24Speaker 02

  Playing a game. And then we've moved to, everything is a game, and we're gonna bet on all kinds of things in prediction markets. Okay, so then, then the next one down is crypto. Well, I know what's interesting about crypto is that it has no value.

• 17:39Robin Rauzi?

  There is no asset.

• 17:40Speaker 02

  There is no asset. Like, it's kind of like the tulip bubble, but there's no little bulb in the dirt at the end. Like, instead of actually getting a tulip bulb, you would just get like, a picture of one drawn on a piece of paper. Like, there's absolutely nothing. It's pure speculation. There's no like, we actually think the value of this matters. It's just pure speculation. And so crypto is kind of entering at the same time as all of these, and it's, I think it's a pretty classic pyramid scheme. Like, the value of crypto is predicted and maintained by people believing that crypto has value. So all of these crypto markets are basically trying to get retail investors to buy crypto, because they are the ones that hold most of the crypto's value, and they know that

• 18:24Speaker 02

  it's valueless unless people believe that it has value. But it's worth nothing. Like, I can say on the record, crypto is worth nothing. I used to call it a Ponzi scheme, but I actually think pyramid scheme is maybe closer.

• 18:35Robin Rauzi?

  Okay.

• 18:36Speaker 02

  So we have sports betting, prediction markets, that includes some sports betting. Now we have crypto, which is just pure speculative betting. Also not clear why we're letting this happen in the US. And then the last one is stocks. People gambling in the stock market. Gambling proverbially there, because there is the value of a company at the end. It is highly regulated. It is maybe not as highly regulated as it could be, but they do have to file with the Securities and Exchange Commission. Securities have a lot of rules they have to follow, like disclosure. But you can still, it's still, you can still gamble and bet on stocks.

• 19:11Robin Rauzi?

  Those are all, to your mind, forms of betting?

• 19:14Speaker 02

  There's probably someone who's gonna write in and be like, actually, it's not a bet unless you do this. But like, how about, those are all things that people can get addicted to really quickly, is trying to make money off of one of those, which they see as a way to make free money. And it turns out, it's just an expensive way to lose money.

• 19:32Robin Rauzi?

  Yeah. The rabbit hole I went down was the sports betting part of this in particular. I read a story recently about what DraftKings was doing or is believed to do in terms of promoting betting to people who, to most people, would think they are displaying problematic gambling behaviors. And that sort of led me down this rabbit hole about how prevalent has sports betting become and how quickly. So earlier I was talking about the handle, for instance, that in 2025, the total handle was almost $167 billion in the US. But there's been tons of polling on this. And so last year, the Cerep Poll

• 20:13Robin Rauzi?

  found that more than half of men ages 18 to 49 say that they have an active account with an online sportsbook.

• 20:21Speaker 02

  Oh, no.

• 20:22Robin Rauzi?

  I don't know how that compares to, say, men ages 18 to 49 who have a 401K.

• 20:29Speaker 02

  Oh, no, that's higher. It's only like half of Americans under 55 have a specific retirement account. They might have savings for retirement in a non-retirement vehicle, but a specific retirement account, it's about half.

• 20:41Robin Rauzi?

  Yeah. So just to get a sense of how much more prevalent it is among men under 50, out of the whole population, 27% in the United States have an account with one of these sports betting companies. About half of people, a third to a half, think that it should be legal in all states. And they think it's a great form of entertainment. But we're reaching this sort of tipping point, I think, where other surveys, like Pew did a survey about sports betting, in 2022, only 22% of men under 30 said that legal sports betting was a bad thing for society. Today, 47% of men under 30 think it's bad for society.

• 21:24Robin Rauzi?

  Like, they're seeing some harms up close, and it's happening really, really fast. And again, this has only been legal, it's now legal in 39 states in the District of Columbia since 2018.

• 21:35Speaker 02

  This is our generation's big tobacco. They designed a product, they're going to make it as addictive as possible, and the way that they succeed is by getting more people addicted. So you're sports betting, prediction markets, crypto, even stocks, although stocks to a lesser degree. People get addicted to it, they ruin themselves, and part of that ruination is going to involve breaking up families, it's going to involve, you know, bankruptcies.

• 22:03Robin Rauzi?

  Bankruptcies, ruined credit, lost homes.

• 22:06Speaker 02

  Yeah, depleting their retirement savings, losing their job. Like, the cascading economic consequences to being a gambling addict are hard to really put into scope because there's no part of your life that ends up being untouched. You know, my mom and sister are family law attorneys. And I asked my mom about this before we recorded. And she said, gambling addiction, it's so fast to end a marriage because it's something that someone can hide for a really long time. You know, you show up to work, you go to the kid's sports games, you're sober, but in the meantime, you've taken out like three mortgages on the house. So the financial effects are devastating, and your partner

• 22:48Speaker 02

  in marriage is on the hook for half of it. I mean, if you gamble away your combined savings, it's not like you can leave him and he'll have to pay you back. Like, that money's just gone. And so she said that it's a shame-respect spiral.

• 23:04Robin Rauzi?

  Yeah.

• 23:05Speaker 02

  It's almost always the guy gets addicted to gambling in some way, shape, or form. Could be stocks, could be crypto, could be sports, loses everything, and it's horribly sad. And if you look at any type of gambling anonymous, any type of gambling helplines, they've seen the need

• 23:22Robin Rauzi?

  Big spikes.

• 23:23Speaker 02

  just explode in the number of people saying that they're addicted to gambling.

• 23:27Robin Rauzi?

  And I think we don't even know, like, this is what's infuriating to me about this, is we are just running this experiment in real time on people's financial security. And they'll say, oh, it's rare that there are gambling addicts. We have no idea how many gambling addicts there are. Because we have controlled gambling, and we have made it, if you wanted to do it, you had to go to Las Vegas, or Atlantic City, or you had to go to maybe an Indian casino on tribal land somewhere. So there were these barriers. And there are now no barriers. The barrier is take your phone out of your back pocket during the game and bet from the stadium.

• 24:08Speaker 02

  So I should say, like, there are lots of people who are going to gamble and be fine.

• 24:13Robin Rauzi?

  Sure.

• 24:14Speaker 02

  They'll have like, an account that they use to like, try to bet on stocks. And it's like, okay, I might lose it. They might buy crypto because they think it's fun, and they just want to see it'll go up or down. They make predictions about their local elections. They bet on games while they're watching them. And it's totally fine, it doesn't matter, it's just like, kind of a fun way to engage, and it's like a game. It's so like, I can understand that for some people, it's just like a fun way to blow off steam. But I think the addiction is when it's not a game. Like, it can very severely harm people. And, you know, to your point, we don't know what percentage of people can't treat betting as a game. So I wanted to talk about this from the perspective of like, this is a public health concern.

• 24:59Robin Rauzi?

  Yeah.

• 25:00Speaker 02

  And that is why it needs to be regulated, re-regulated, regulated again. But I think the question that we kind of danced over, that we didn't really address is, why is it so male?

• 25:13Robin Rauzi?

  Yeah.

• 25:14Speaker 02

  I mean, the economics literature, so why is sports betting male? Why is gambling male? Why is crypto male? Why is it all of these potentially speculative assets games? Why are all of those so male-dominated? So there's a really formative paper in economics about this, it came out in like, 2000 or 2001. But for generations in personal finance, the story was, women are too conservative. And that the reason why they have less money in investing is that they just, they don't take risk, they're very conservative in their portfolio, they prefer bonds over stocks. And so it was often framed as, women are the problem. Because they're not taking more risk, and therefore, they're not getting

• 25:59Speaker 02

  higher returns from, say, their retirement accounts or from an investment account.

• 26:03Robin Rauzi?

  Sure.

• 26:04Speaker 02

  So this paper came out, and it was called, Boys Will Be Boys. And it looked at tens of thousands of accounts over a, I think, six or seven-year periods. Is it looking at?

• 26:16Robin Rauzi?

  Investment accounts?

• 26:17Speaker 02

  Investment accounts.

• 26:18Robin Rauzi?

  Okay.

• 26:19Speaker 02

  And looked at the investing behavior of men and women in these accounts. And what they found is that the men were worse off because they made so many trades. And they ended up losing a lot in fees because they were making so many transactions because they were chasing higher returns. And the narrative shifted from, women are too conservative, to, men are overconfident and too risky.

• 26:42Robin Rauzi?

  Hmm, and take too much risk.

• 26:45Speaker 02

  They take way too much risk. And they're way too confident about the risk they take. Now, this was in, keep in mind, this is looking at the 90s, which was a pretty good period in the stock market.

• 26:53Robin Rauzi?

  And it's like, before Robin Hood and all that kind of thing, where you had zero-dollar trades.

• 26:57Speaker 02

  This is like, through a broker. Like, you have to call your broker, be like, okay, do this now, and do this now. And, you know, you'd get charged a fee for that because it was a different world. And this, this really changed the way that economists viewed, at least in this, like, a certain set of economists in the retirement literature of the investment portfolio and retirement account plans, because, you know, men are too risky and too confident. And these are really regulated, I mean, this is, this is a Security Exchange Commission-regulated stock investments. This is not crypto. This is, you read about it in the paper, and then you make some kind of bet.

• 27:31Robin Rauzi?

  Yeah, you call your stockbroker, and you say, buy me 1,000 shares of

• 27:35Speaker 02

  This.

• 27:36Robin Rauzi?

  IBM.

• 27:37Speaker 02

  Yes. And some men, you know, they made it huge.

• 27:40Robin Rauzi?

  They made a killing, sure.

• 27:41Speaker 02

  So it's changed the way that we think about risk and conservativeness and confidence in terms of how do you invest for long-term savings, like retirement accounts. But that, to me, is like lodged at the top of my brain of this, boys will be boys, that, you know, men, even in a regulated setting like stocks, they are just going to be chasing higher returns. And the real cost comes from like, the frequency of the transaction. Now, why that's the case, why men and women are different here, it's a really consistent finding across basically any form of risk and confidence, that men will make more trades and be more risk-taking.

• 28:21Robin Rauzi?

  Not just financial? Do you mean outside the space of money?

• 28:25Speaker 02

  Yes. I was trying to find, like, but is there an actual reason? And there was a University of Pennsylvania professor, who was a neuroscientist, who says that it's related to testosterone, which, I don't know, it's like, one of these, like, evolutionary biology, like, risk-taking is a survival tool, that's what men had to do. And so, like, testosterone and hormones play into this. You know, I don't know, like, I would believe that there is something, like, maybe biological in how men and women approach things, that is reinforced by society. I thought it was interesting that this Penn professor brought up that, like, celebrity endorsements matter, because it's a cueing behavior of like, well, Matt Damon told me to buy crypto, so I should do it. Or like,

• 29:10Speaker 02

  every major athlete of the 21st century is in a commercial together, saying that I should bet on sports. And so he tried to kind of walk the line between, men have biological, you know, inclinations.

• 29:26Robin Rauzi?

  Compulsions, yeah.

• 29:27Speaker 02

  Yeah, but like, they're more risky. He talked a lot about the speed is the biggest problem with gambling, and betting is the rapidity that really gets you into trouble.

• 29:34Robin Rauzi?

  I mean, how different is it from, from social media addiction, right? Or just kind of dopamine hit after dopamine hit. And, I mean, one of the first types of problematic behavior that people see gambling on these apps is placing repeated bets really quickly in a row, and then, of course, chasing losses, right? Where you try to make up for the loss by winning bigger on the next bet. That's like, the first sign of you're going, you're going in a bad direction.

• 30:05Speaker 02

  Yeah. And I should say, there is a lot of pushback. Some people will tell you that this idea that men are more risky than women is way overblown. It's like a marginal difference, you know, like, 45 and 55. And that there is a very clear difference between men and women, but it's not black and white. It's just a relative appetite for risk of men and women. And it gets really overstated. But gambling is really male.

• 30:28Robin Rauzi?

  Yeah.

• 30:29Speaker 02

  And it's not a close margin at all. So there's some, there's something there. I don't think there's a satisfying explanation as to why men gamble more.

• 30:37Robin Rauzi?

  Well,

• 30:38Speaker 02

  I didn't want to go to economist jail by citing a paper from 2001 and not being like, and also, some people don't like that paper. If I didn't tell you that some people didn't like that paper, there's just going to be like, a knock on the door with a guy that's holding like, a box of PhDs, and he's going to be like, put yours in. You didn't caveat yourself.

• 30:55Robin Rauzi?

  If you go to economist jail, I can't help you out. I will not be there with you.

• 30:58Speaker 02

  You don't want to be my economist jail cellmate?

• 31:02Robin Rauzi?

  I don't think they'll let me in.

• 31:06Robin Rauzi?

  Among the things that were interesting to me about what this horrifying experiment we're having with sports betting is showing is, I mean, it's how much information that we can find out, right? So they're finding, for instance, that statewide credit scores are lower in states that have legal sports betting, and that if you have mobile sports betting, that they go down 10 times as much, right? Like, it's a small, it's a small average drop, but it's a 12-point drop if you have mobile betting. I mean, how can you look at that and say that this is good for your state?

• 31:46Robin Rauzi?

  And yet, at the same time, states tax betting, and they're making money off of it.

• 31:52Speaker 02

  Well, this is where the whole lawsuit came from. Murphy is Phil Murphy, the governor of New Jersey, and he was suing to allow for sports betting in New Jersey because Atlantic City wasn't giving them the type of revenue that it used to.

• 32:06Robin Rauzi?

  So he wanted it statewide.

• 32:07Speaker 02

  They wanted to be able to have more, New Jersey's got a budget, you know, they've got pretty high taxes already, and this was a source of revenue that they could lean on to, to make up for holes in their budget that was starting to dwindle. And so now they just, they're like, all right, well, let's, let's just open up more betting.

• 32:23Robin Rauzi?

  God, I'm looking for the, the, I think, very conservative, you can correct me if I'm wrong, tax foundation, has done an analysis of how much taxes that they get off of sports betting. You know, of course, their position is that there's an ideal place to tax it, so you don't discourage it too much. But it's billions of dollars that have been collected in taxes, too. This was in 2025. The total gaming revenue was $14.7 billion. That's tax revenue.

• 32:59Speaker 02

  Across all states or in one state?

• 33:00Robin Rauzi?

  Across the states where it was legal.

• 33:02Speaker 02

  That's not small. It's only on the size of the states. That wouldn't be that big in California, but it would, you know? So this kind of gets into the solutions. We have sin taxes, and in some ways, they're a pop-

• 33:17Robin Rauzi?

  Sin tax, not syntax.

• 33:20Speaker 02

  Oh, sin, S-I-N, tax.

• 33:23Robin Rauzi?

  Yeah.

• 33:24Speaker 02

  Advice, or advice tax, a vice tax.

• 33:25Robin Rauzi?

  Sure.

• 33:26Speaker 02

  And we tax things that people want to consume but are bad for society, and we get revenue from it, but the tax also serves as a-

• 33:36Robin Rauzi?

  A disincentive.

• 33:37Speaker 02

  Yeah, so the, so I was working on this in the book on prices since 1970, and I was running all of these, like, comparisons of, like, if you look at the price of all goods tracked by the CPI and go each year and just try to see which is the fastest-growing price in every year, as well as over the time period.

• 33:55Robin Rauzi?

  The fastest-growing price for a product? Okay.

• 33:59Speaker 02

  It's tobacco.

• 34:00Robin Rauzi?

  Oh.

• 34:01Speaker 02

  It's like number one with a bullet, it's tobacco, and it's because it is an engineered price increase to reduce tobacco consumption.

• 34:07Robin Rauzi?

  Mm-hmm.

• 34:08Speaker 02

  There's a version of the world where, you know, it's not that states are trying to right-size their tax revenue to get money, they're using a very punitive tax on sports betting wins in order to get people to bet less.

• 34:24Robin Rauzi?

  I think that they actually tax the companies. So, like, how sports betting is rolled out varies a lot from state to state. So, like, in Montana, the state lottery actually controls all of the sports betting. In Oregon, the Oregon lottery gave DraftKings a monopoly for sports betting, and then they get 51% of the proceeds.

• 34:47Speaker 02

  Yeah, and then if you make income from, you know, like, at a casino, you could end up, like, with a tax form on your way out of the casino if you make enough money, and you do have to report gambling winnings on your taxes.

• 34:58Robin Rauzi?

  I read this paper that I did not, it was too late at night, but it was about how the US tax code incentivizes big betting because of the way it treats losses versus gains.

• 35:08Speaker 02

  Yes. This is also a metaphor, I feel like, for how our public systems are failing. This is a major health concern, it's not being treated that way. This is something that we could use the tax structure to keep a handle on, but instead, we're just trying to use it as a cash cow. And then our income tax structure, the way that people have losses versus gains, almost makes it seem like, oh, losses don't matter.

• 35:31Robin Rauzi?

  Yeah, no, lose big, because then you can deduct it, because you're going to itemize it.

• 35:36Speaker 02

  Yeah, so it's-

• 35:37Robin Rauzi?

  Not great.

• 35:38Speaker 02

  I'm, like, looking at your question in the notes, it does feel like we're just running a [bleep] experiment on young men.

• 35:44Robin Rauzi?

  Yeah, it does.

• 35:45Speaker 02

  I've already read think pieces in magazines that shall not be named about how this is because it's nihilism. There are probably, I'm going to say this with love, some real dumb kids out there that think that this is a good investment, like, I'll get good at gambling, and then I won't have to save, I won't have to work. That is, like, one thing, but it's also being sold as, like, one of these generational, like, well, these kids just don't believe in the economy, so, like, they're just willing to, you know, bet it all, and it's almost like it's their fault.

• 36:18Robin Rauzi?

  Yeah, it's like their fault, yeah.

• 36:20Speaker 02

  It's totally their fault that we changed, like, all of the rules for gambling to encourage it on so many levels. It is designed to be addictive, and then we're like, can you believe these kids got addicted because they don't believe in America enough? Like, ah.

• 36:34Robin Rauzi?

  There are two remarkable pieces of journalism that have come out, I'm going to, in the last month, well, by the time this airs, maybe the last two months. One is in the New York Times, and it came out on September 19th, and the headline is "How DraftKings Uses AI to Target the Gambler's Likeliest to Lose." And so that's kind of a straight news reporting about how they, how they do it. But then ProPublica also did a piece called "I Deliberately Bet Like a Problem Gambler, DraftKings Made Me a VIP." And that's sort of a first-person account of exactly what he did. He was bankrupt by ProPublica, lost tens of thousands of dollars. That ran September 26th of this year.

• 37:16Robin Rauzi?

  If you are like me and you don't gamble on apps, it is eye-opening. It is really eye-opening.

• 37:21Speaker 02

  I was reading a news article, I thought it was a news article, I was looking, I was trying to understand, the legal status of Calci-

• 37:30Robin Rauzi?

  Yes.

• 37:31Speaker 02

  -and Polymarket in sports betting is really hard to understand. And so I was trying to find an article that explained, like, where can you bet? So I went to CBS Sports, and the top, like, there's the lead, "Sports prediction markets are regulated in 50 states, but knowing the states where you can use apps like Calci and Polymarket is challenging, because some states are still, blah, blah, blah." The fourth sentence is, "You can use the Calci promo code CBSSPORTS55 to earn $55 in bonus trading credits after $25 more in trades, or the new Polymarket promo code CBSSPORTS to get $25 bonus after a $10 deposit." And I was like, this is insidious.

• 38:15Robin Rauzi?

  That's disgusting.

• 38:16Speaker 02

  I, well, I stopped reading, I wasn't like, no, but go back to this fact-based presentation about these garbage plot, like, I, it was, it blew my mind, so.

• 38:24Robin Rauzi?

  Yeah, I mean, and we're seeing this already, right? There was a study published in 2024 where they actually looked at consumer-level credit transactions and debit transactions, but they could look at who was transferring money to sports gambling apps, so they could sort of look at what were the outcomes for people who were and weren't. And they found, this was a 230,000 households, so not a small study.

• 38:48Speaker 02

  It was a massive study.

• 38:50Robin Rauzi?

  Yeah, they found 8% of them were using sports betting apps, and that, conditional on doing so, they were losing an average of $1,100 per year. And they also found that those who were betting on those apps invested less and had an increase in credit card debt. Like, it's not nothing that's going on with these, it's not all harmless fun. And it also, it doesn't just target men, we did say men, but also lower-income people, the people who are probably the least likely to be able to afford losing $1,100.

• 39:20Speaker 02

  Yeah. The reason why I keep going back to the tobacco example is to say, like, we have been here before, and now, we haven't always won. Like, tobacco, we ended up with, I think, probably a really decent set of outcomes, a massive settlement, warnings, prediction of harm, huge public health campaigns, all kinds of public money being spent on getting people to, you know, not smoke.

• 39:45Robin Rauzi?

  Restrictions on advertising related to tobacco products?

• 39:48Speaker 02

  Yes, and we won that one. I would say social media was our next test, and we lost it.

• 39:53Robin Rauzi?

  Yeah, we're still fighting it, anyway.

• 39:56Speaker 02

  Is still fighting it, right? Like, it's, it's, they have data, they know that people are harming themselves because of the product that they are selling, and yet, the, the way that they make money is getting you addicted so that they get money for the ads that are in front of you. Like, all of this is, addiction of people is a great way to make money, so do we let them do it?

• 40:18Robin Rauzi?

  Mm-hmm.

• 40:19Speaker 02

  And tobacco, eventually, we said no.

• 40:21Robin Rauzi?

  I know, I mean, it took, what, decades?

• 40:24Speaker 02

  Oh, easily two and a half decades.

• 40:26Robin Rauzi?

  Yeah.

• 40:27Speaker 02

  It led to some amazing procedural movies.

• 40:30Robin Rauzi?

  [laughing]

• 40:32Speaker 02

  Like, if I'm, like, if I'm thinking of best-in-class procedural, The Insider is-

• 40:40Robin Rauzi?

  The Insider is really great.

• 40:41Speaker 02

  It's so good. So I guess the optimist's view is, we're not done. I will say there are already multiple pieces of legislation that are in Congress now. One of them is the SAFE Act. This, what I thought was interesting, it's not a ban, it's basically an intense amount of regulation that has things like, you can't air advertisements for sports betting during live sports broadcasts.

• 41:10Robin Rauzi?

  Right, which, you know, should fall into the federal regulatory scheme, not the state regulatory scheme, right?

• 41:18Speaker 02

  Yeah, it also says you can't have any type of, what CBS Sports was advertising of, like, any type of promotional credits. You don't give people money to then tell them to go gamble, like, you can't do that. You know, optimist, this is, this is like the episode we did on how long it took to ban child labor. Like, no one's winning awards here, we're not on the front foot. But the thing about gambling addiction and all of these apps is that the path forward is really clear. You need to regulate things that need to be regulated, and you need to not encourage companies to get people addicted to something harmful to them, and there are very clear ways to do it. Like, this is a public health problem we can solve.

• 41:57Robin Rauzi?

  If we want to.

• 41:59Speaker 02

  Shouldn't be so hard.

• 42:00Robin Rauzi?

  Yeah.

• 42:01Speaker 02

  That's a good place to stop, but I like-

• 42:03Robin Rauzi?

  That's a good place to stop.

• 42:04Speaker 02

  Or could we keep going?

• 42:06Robin Rauzi?

  We'll keep going when we get back from our dramatic pause.

• 42:12Robin Rauzi?

  We're back with executive orders.

• 42:15Speaker 02

  I love your executive order. Oh, my God, do it, do it, do it, do it.

• 42:18Robin Rauzi?

  So, you know, I was in New York and we went to all these museums. And as I was sitting having tea in the café at the Frick Museum, I was reading on my phone about the history of Henry Clay Frick.

• 42:32Speaker 02

  He's a real bastard.

• 42:34Robin Rauzi?

  He's a real bastard.

• 42:37Robin Rauzi?

  So museums that are founded by union crushing assholes like Henry Clay Frick should be 100% free to any union member to visit.

• 42:49Speaker 02

  Ah, I so fully and strongly endorse this.

• 42:54Speaker 02

  So fully and strongly endorse.

• 42:55Robin Rauzi?

  You know, I don't know if they all want to go see these rembranes and vermeers. They're pretty fantastic. But it really made me sick, actually, sitting there afterwards to think that they were bought with the wealth that was so deliberately kept from workers. And it just, it kind of ruined the entire museum for me. And I thought, well, what, how could they possibly make this slightly better?

• 43:18Speaker 02

  You know, or a portion of the proceeds go to the union.

• 43:21Robin Rauzi?

  It was pay what you can day when we were at the Frick.

• 43:23Speaker 02

  Oh, so you just gave them this, a whole lot of this?

• 43:27Robin Rauzi?

  Well, no, I think we, I think we paid half of what the normal going rate was. But then we were reading this over tea in the afternoon. And my wife is like, we shouldn't have paid them anything.

• 43:38Speaker 02

  They should have paid us to come.

• 43:42Speaker 02

  All right. Well, my executive order, I wanted to do an update on a prior executive order, which I, I said before the break that we need to have some type of children's act for accommodating children in public spaces, the way that we have a disabilities act.

• 43:58Speaker 02

  Bans on advertisements, you know, of certain nature, cars come in more colors, like there's rainbows everywhere, just like, but.

• 44:05Robin Rauzi?

  No, I think you could fit car seats in cars, I think would be.

• 44:07Speaker 02

  Oh, yeah, fit car seats in cars. But the example I gave was having to like Superman my daughter and do washing her hands. I was at a restaurant last week and underneath the sink in the bathroom, they had this metal contraption that folds up and then it pulls down to a staircase so that kids can climb up, wash their hands, and then it folds back up.

• 44:27Robin Rauzi?

  Oh, like an attic staircase to the sink?

• 44:29Speaker 02

  Like an attic staircase to the sink for kids. And I was like, this is what I'm talking about, right here. I looked it up. It was founded by a mom in Georgia who could never get her kids to like successfully wash her hands in a public space because they never, it was so hard for them to get up there. And I, I, I looked at that and I was like, do we not have elections in Georgia? Like, what are we, what are we doing here?

• 44:51Robin Rauzi?

  Do the good people at the Nobel Foundation know about this? Yeah.

• 44:55Speaker 02

  My prior executive order is that it is more, are you starting to get baby yelling in the background?

• 45:01Robin Rauzi?

  I know. First, I was like, is that my cat? No, it's Catherine's baby.

• 45:04Speaker 02

  That is a ringing endorsement of make the world a better place for children to interact with.

• 45:10Robin Rauzi?

  Exactly.

• 45:11Speaker 02

  From a screaming baby who was like sent home sick, but y'all, she is not sick. So frustrating.

• 45:20Speaker 02

  All right, spiritual sponsors.

• 45:21Robin Rauzi?

  Spiritual sponsors. My spiritual sponsor is this band called Hermanos Gutierrez. They are a kind of Latin sounding guitar duo with a sort of surf vibe. But the brothers are actually Swiss and their mother was Ecuadorian. Anyway, the music is really great, really fun. I've been listening to it pretty much nonstop since the lovely woman who's been giving me variations on this haircut for 20 years, she told me about that. Yeah.

• 45:48Speaker 02

  Okay, my spiritual sponsor, in part inspired by our conversation and one I had with my sister last night, are really good procedural movies. If it's good, it's good. It hits, it hits. They don't put in any like totally unnecessary love story or sex scene. I feel like in biographies, women rarely get the good procedural because they always have to have a love interest. Actually, if, if you put a woman on screen and she doesn't have a love interest, she'll die. So like, I get it. But a really good procedural is my spiritual sponsor. My sister and I were talking about this last night because she said the new Facebook movie is.

• 46:27Robin Rauzi?

  I heard just incredible takedown of this movie.

• 46:30Speaker 02

  She said it was a bad, she's like, it's a bad procedural. The Social Reckoning.

• 46:35Robin Rauzi?

  Yeah, Aaron Sorkin's, right?

• 46:36Speaker 02

  Yeah, she said that it was, it had all the potential to be like a really good procedural about a whistleblower going to a reporter, ala like All the President's Men. But it just gets like, she's like.

• 46:49Robin Rauzi?

  Allo the insider.

• 46:50Speaker 02

  Yeah, ala the insider, ala the President's Men. Like, there's this really amazing procedural movie about a female worker at Facebook who is like going to change how the world sees this company. And instead, something else happened.

• 47:04Robin Rauzi?

  Yeah, if you saw this movie and hated it, I, you could listen to the Sam Sanders Show. He and his guest, holy cow, did they rip that apart for exactly the reasons you're talking about?

• 47:15Speaker 02

  Ah, the things we could have had.

• 47:23Speaker 02

  Sophie Lalonde edits the Optimist Economy Podcast and Andy Robinson makes our videos. We are in a follower race right now between TikTok and Facebook. So.

• 47:33Robin Rauzi?

  Pick your winner.

• 47:34Speaker 02

  Yeah, pick your winner. There are also clips on Instagram and YouTube. With more donations, we will someday pivot to full video. So if you like the clips, you'll like the whole thing, including the hand signals to Sophie to say we're stopped talking about spoilers in movies now. Oh, and YouTube, we're on YouTube, sorry, we're on YouTube. Andy, I'm so sorry. We're on YouTube. Anyway, there we go.

• 47:55Robin Rauzi?

  To those guys. Yeah, we have a chat room on Substack. Also, we have new merch coming. In the meantime, our remaining first generation t-shirts are on sale at optimist economy.com. Look for the link to merch. Finally, Optimist Economy is entirely listener supported. I want to take a second and thank all of our utility maximizers and dissavers. I shout out the eternal optimist all the time, but really, most of you who are making those small contributions every month literally keep this show going. If you would like to be among them, optimist economy.com is where you can make a contribution.