Gambling Is Eating The World w/ Nick Devor

In this week’s Better Offline, Ed is joined by Nick Devor of Barron’s to talk about how gambling is poisoning everything, how legislation is struggling to keep up, and the damage already being caused by sports betting and prediction markets. Nick Devor: https://www.barrons.com/authors/nick-devor https://x.com/nickdevor_ Nick Story about gambling non-profit: https://www.barrons.com/articles/kalshi-prediction-market-gambling-addiction-hotline-f4e64c71?st=UtucVK&reflink=mobilewebshare_permalink Save $10 off a year of my premium newsletter: https://edzitronswheresyouredatghostio.outpost.pub/public/promo-subscription/gzqwkv54e1 YOU CAN NOW BUY BETTER OFFLINE MERCH! Go to https://cottonbureau.com/people/better-offline and use code FREE99 for free shipping on orders of $99 or more. --- LINKS: https://www.tinyurl.com/betterofflinelinks Newsletter: https://www.wheresyoured.at/ Reddit: https://www.reddit.com/r/BetterOffline/ Discord: chat.wheresyoured.at https://discord.com/invite/QUUQUP9szv Ed's Socials: https://twitter.com/edzitron https://www.instagram.com/edzitron https://bsky.app/profile/edzitron.com https://www.threads.net/@edzitron Email Me: [email protected] mailto:[email protected] See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

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

• 0:00Speaker 00

  This is an iHeart Podcast. Guaranteed Human.

• 0:04Speaker 01

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• 0:32Speaker 02

  Football Sundays are at my house this year, so I've been making a Total Wine & More run before every kickoff. Cold beer for the group is a given, but this time of year I like to bring in some fall flavors. A bottle of maple whiskey and a salted caramel whiskey that even my friends who don't drink whiskey end up trying. I get everything I need at the lowest prices at Total Wine. Discover your new favorite fall flavors at Total Wine & More. Spirits are not sold in Virginia and North Carolina. Drink responsibly. Must be 21.

• 0:59Speaker 03

  Calzone Media.

• 1:02Ed Zitron?

  Hello, welcome to Better Offline. I'm of course your host, Ed Zitron.

• 1:18Ed Zitron?

  Now, everyone, I know how much you love gambling and those of you who have been gambling on the Cockroach Races, please use code ZITRON, 50% off big boy cockroaches. Those are the ones that will mostly lose your money, but you could win 100 to one. So anyway, we're sponsored by Cockroach Races. Now, putting all that aside, joined by Nick Dever, who's a reporter at Barron's covering gambling in the prediction markets. Nick, thank you for joining us. We legally now cannot talk more about the Cockroach Races, however.

• 1:46Speaker 05

  It's true, they're unregulated and you know, as fun as they may be, we do have to turn a little bit of a blind eye. But you know, I'll see you there tonight.

• 1:55Ed Zitron?

  Yeah, I mean, of course, of course. And also, most of my money is in that. But let's talk about the lesser forms of gambling, by which I mean, of course, prediction markets. What has been going on there recently? Because I, since you last joined, I've only seen things get more demented.

• 2:11Speaker 05

  Indeed, yeah, since we last spoke, I think, I don't know, first quarter of the year, prediction markets have continued to just go absolutely crazy. We're seeing record trading volumes basically every Sunday. Now, why every Sunday, Ed? Can you, can you guess what happens on Sunday?

• 2:28Ed Zitron?

  I can guess it's when the pigskin gets chucked around.

• 2:31Speaker 05

  Exactly, yeah. So you know, these platforms position themselves as financial instruments, places where you can hedge your risk. And lots and lots of Americans are hedging their risk to losing football games. I don't know, you know, basically, prediction markets are going crazy because they have started offering and have continued to offer the equivalent of parlay bets.

• 2:58Ed Zitron?

  What is a parlay bet?

• 3:00Speaker 05

  Yeah, yeah, so when you place a bet on two individual outcomes. So that's like the Patriots win and I actually don't watch sports. So my, the amount of like examples I'm going to be able to provide is very low, but that's fine.

• 3:15Ed Zitron?

  Right.

• 3:16Speaker 05

  You know, the Patriots win and this, this player scores this many touchdowns. If I connect both of those bets and if I'm right on both, then I get a massive payout because I'm basically tying together multiple discrete bets into one large wager. Now, these are super profitable for your traditional like online sportsbook because the odds are so long. You know, it's very, and you can make parlays with a lot of legs. They're called, individual bets are called legs. So you know, with each leg that you add, your odds of winning and go down and the odds of the sportsbook taking your money go up. So they're very profitable for the sportsbooks. And prediction markets have started to offer them as well.

• 4:00Speaker 05

  And they're, they're less profitable for the prediction markets because they just take a cut of trading fees. But yeah, people love to sports bet and they love to tie multiple bets into one. And that's a massive portion of the volume now.

• 4:13Ed Zitron?

  How is this legal? Because even gambling on sports, which I truly don't do, but I've tried to see like how far you can push them with like VPNs just to sign up and they're actually surprisingly widely stopping that. How is this legal? Because I thought that there was very strong regulation on sports betting in general. Cause I know DraftKings and the other one, I don't, I truly don't remember.

• 4:36Speaker 05

  FanDuel?

• 4:37Ed Zitron?

  FanDuel, there we go.

• 4:40Ed Zitron?

  How is it legal for Kalshi and them to do it?

• 4:42Speaker 05

  Right, so DraftKings and FanDuel, you know, BetNGM, places like this, they operate on the regular sportsbook model, which is regulated state by state. In 2018, there was a Supreme Court decision that basically opened up sports betting, which was illegal prior, except in a few jurisdictions, to any state that wanted to legalize it could. And you know, each state is going to have its own regulatory regime. Think about it like how marijuana legalization worked. If a, if a state wants to legalize it, it can under its own terms. So prediction markets are not technically sports betting. It's a financial exchange.

• 5:23Speaker 05

  So if you and I agree that there's a 50 50 chance of an event happening, I think it's 50% yes. You think it's 50% no. We each put up 50 cents into a contract. And once the event happens, whoever is right gets the other's 50 cents. So the contract is worth a dollar once the event is over.

• 5:40Ed Zitron?

  And it's a contract between two people legally speaking?

• 5:43Speaker 05

  It's a contract between two people, yeah. They're called event contracts or binary options because they only have two outcomes. And usually they're tied to yes or no questions. So will this team win? Will this player score more than seven touchdowns or whatever? That kind of a thing. And so because they're event contracts, because they're technically financial instruments, they're regulated at the federal level by the Commodity Futures Trading Commission. It's a small regulatory body that handles options contracts, things of that nature. And because they're financial products, you know, they're legal nationwide. You know, you, once you turn 18, you can trade stocks. Once you turn 18, you can trade options.

• 6:24Speaker 05

  Once you turn 18, you can trade sports options tied to, you know, the outcome of a sporting event. So on an underlying basis, compared to a sportsbook, they are different. But from a consumer point of view, they're identical product experiences. And just to hammer that idea home, when you download DraftKings and you open the app in New York, for example, and you open it up and you start betting, the, the odds that you're seeing and the betting that you're doing, that's on a traditional sportsbook model because New York has legal sports betting. But if you then fly to California and open up the same app on your phone, the app looks identical.

• 7:05Speaker 05

  The odds are identical, the betting behavior is identical, the whole UI UX, everything. But the underlying product that you're using is a prediction market because sports betting is illegal in California. So even though there's an underlying difference, from a consumer point of view, it's the exact same product. It's the exact same experience. And that's why prediction markets were initially seen as kind of a threat to the sportsbooks. But the sportsbooks realized that they can use prediction markets to sort of like unlock a bunch of new customers in states like Texas, California, a lot of Florida that don't have many legal sports betting options.

• 7:42Ed Zitron?

  But just so we're clear, do the DraftKings of the world now do prediction markets as well?

• 7:47Speaker 05

  Yeah, that's what I'm saying. DraftKings and FanDuel and all of them, they also have prediction markets. So DraftKings, like their, their tagline for all of their ads this year is like, you know, that we're finally available nationwide. You can DraftKings anywhere you are in the country. And the, you know, the, the ad campaign is like Kevin Hart and one of the Jonas Brothers, I think, like doing across country.

• 8:08Ed Zitron?

  I can't believe Kevin Hart would sell out. Sorry, that's, that's a joke for like 13, 13 people who listen to the show be like, ha, ha, yeah, got him. And if you've never watched the Ziway interview with Kevin Hart, I cannot recommend it enough. Ziway, fantastic, fantastic podcaster she is. Anyway, moving on from Kevin Hart, I, is there anything stopping this? Are there any efforts to try and stop this from existing or at least slow it down? Or is this just, is this the new normal, at least until we have different people in Congress or what have you?

• 8:42Speaker 05

  Definitely, there's a lot of efforts. Yeah, I mean, yeah, exactly. There's a lot of efforts to slow this down on a lawsuit basis. Dozens of states, I think, have at this point sued Kalshi or Polymarker or the other prediction markets, you know, alleging that they're offering illegal gambling in their state. And those cases are working their way to the Supreme Court. I don't want to like get too into too many specifics because honestly, like every four days, there's another legal development that kind of changes the landscape. But one thing is for sure, I think anyway, is that this is going to wind up at the Supreme Court. It will need to be decided there whether or not, you know, swaps, as they're known,

• 9:25Speaker 05

  these binary options tied to sporting events are swaps or whether they're sports bets. That's the fundamental question. Whether, you know, in 2011, when Dodd-Frank, I think that was the year, when Dodd-Frank was passed and we brought swaps under the regulation of the CFTC, whether Congress intended at that point that, you know, there would be sports betting with these swaps. And you know, I've spoken to Gary Gensler, who was the chair of the CFTC at the time and famously chair of the Securities Exchange Commission under the former President Joe Biden. And he has told me, no, that was, that was not the intention of Congress. Congress did not, yeah.

• 10:06Ed Zitron?

  It was barely the intention of Congress to stop anything. I have a lot of cynicism about the regulation from that time. But yeah, it's just, it's yet more times in which regulation just created a new industry rather than suppressed one.

• 10:18Speaker 05

  Yeah, absolutely. I think that, you know, there's a question of whether like congressional intent actually matters. But it seems pretty clear that the congressional intent was not for there to be nationwide sports betting through financial contracts. But you know, whether or not the Supreme Court adheres to, you know, what was meant at that time or what, you know, I've, I've had people in the prediction market world be like, well, you know, the law is very clear that it allows this. And you know, I just don't think that the Supreme Court really cares how clear the law is at any given time. They're going to kind of interpret it how they choose.

• 10:57Ed Zitron?

  So that's what that's what's so strange about all this as well, because finance and contracts and like financial, those things are fairly well regulated, but it seems that these companies have just kind of used the regulation to make themselves legal rather than, I don't know, I realize I'm kind of dithering on this point, but it almost feels like they just found a loophole by ignoring everything. It's just because like you can't do options, you could do options trading in most states, but there are limitations to how much margin you can have. There are like very fixed things you can and can't do. But with this, you could just do anything as long as you're, what, 18, 21? Is there, is there even an age limit?

• 11:40Speaker 05

  Yeah, it's 18. That's nationwide.

• 11:42Ed Zitron?

  Oh, good. That's even better.

• 11:44Speaker 05

  The, the argument for, and I, you know, the whole point with event contracts and the idea that they, what they're supposed to be doing, you know, when, if you look at like old interviews with Tarek Mansour, it's the co-founder and CEO of Kalshi, the example he always uses is Brexit. So he was a trader or something at some firm before he founded Kalshi and clients wanted a way to hedge their exposure to Brexit. So it's kind of difficult to do that with like a package of stocks. What, what stocks do you buy or not buy to, you know, estimate an outcome of Brexit? It's, it's kind of difficult to do that. But a much cleaner way would be, well, what if I can just trade an option

• 12:27Speaker 05

  on like, yes, Brexit will happen. And if it does happen, then I get paid because that's actually what I'm looking for. So that's where binary contracts and can actually be useful. That's like a, you know, an actual use case for prediction markets is this hedging opportunity. And that's where I, you know, I think that's totally valid. That's like the point of a financial market, right?

• 12:46Ed Zitron?

  Yeah, well, sure.

• 12:48Speaker 05

  But, but the thing is like now their primary business is sports. And so like when, you know, it's, it's kind of a, I don't know.

• 12:56Ed Zitron?

  I want to push back about what the, the primary function of a financial market on that one though, because coming like, living in the beautiful, beautiful Las Vegas, Nevada, the beautiful slot machines. One of the things that I've noticed about the casinos is they very rarely let you bet on, for both the house's benefit and otherwise, bet on binary things. Like maybe you'll do a yes or no, but even like red or black on a roulette table is 48.9%, what have you.

• 13:22Speaker 05

  Yeah, yeah.

• 13:22Ed Zitron?

  But the big thing is they don't let you bet on just like, how many fingers am I holding up or stuff like that. It's, that's the common, it's like, and the idea of like, oh, I can hedge whether an outcome happens directly feels like it's not even in, it's not even a financial market anymore. It's not, you're not investing in, you're not actually investing in anything. You, and this is because, this is why, by the way, Mormonism just made prediction markets against the religion. I don't know if you heard about this?

• 13:51Speaker 05

  No. What?

• 13:52Ed Zitron?

  Mormonism. Yes. So Mormonism, I'll go look this up. Mormonism just made prediction markets. Because the argument is, yeah, it's, it's also illegal in Utah.

• 14:05Speaker 05

  Yeah, there is that.

• 14:06Ed Zitron?

  And to be clear, we are not a pro Mormon podcast, just getting that out there. Yes, it's, it's fostering greed, particularly among youths while producing nothing of value. Gambling is, gambling is built on the desire to obtain something for nothing. And this is the one and only thing I agree with the Mormons on, because that's the thing, that's not a financial market.

• 14:29Speaker 05

  Yeah.

• 14:29Ed Zitron?

  A financial market is a market for financial instruments. Unless you were saying that, I guess that there are probably financial instruments that aren't about, well, I mean, even commodities, though you're still betting, you're still actually, I said betting, they're going to get me for that one. But you're still investing in it. You're still investing in a thing. With this, it's, I'm investing in and whether a thing happens, I guess. I don't know. I'm sure that someone's going to email me and say, well, there's an example here in finance. I don't think anything like that should exist in finance. I also think that we need to massively pare back almost every financial instrument. I think that we are too speculative. But it is interesting as well, seeing the Mormons coming out as a moral side on this. But it is, but that's what it comes down to. That's the real problem with this. It's not really betting on anything.

• 15:14Speaker 05

  Yeah.

• 15:14Ed Zitron?

  But I also think that you should make DraftKings illegal and FanDuel illegal and Polymarket and all them illegal. Send them, big bow, send them away.

• 15:31Speaker 06

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• 16:15Speaker 06

  wine, even a pumpkin spice cream that's perfect in coffee after dinner. And with the lowest prices, I can bring home a few different fall flavors for everyone to try. Find your favorite fall flavors at the lowest prices at Total Wine & More. Spirits are not sold in Virginia and North Carolina. Drink responsibly. Must be 21.

• 16:38Speaker 05

  Well, the, the thing is about like, on the pointing of like, whether this is, I guess, the, the big question has been whether prediction markets are investing or not. And, you know, should they sit along alongside, you know, your 401ks, your, you know, ETF stocks?

• 16:55Ed Zitron?

  Is that what people are suggesting? Is that being put on the table?

• 16:58Speaker 05

  Well, if you open Robinhood right now, like you can liquidate your stock position and go put it all on football with prediction.

• 17:06Ed Zitron?

  Yes, you can.

• 17:07Speaker 05

  Like in the same app.

• 17:09Ed Zitron?

  You can't, how, is there a prediction market ETF though? Which is just a fund of different options that you could buy into that usually it's like stocks or bonds?

• 17:19Speaker 05

  There's no prediction market ETF, but I have seen that there is something, and I need to do more reading and reporting on this. So I don't want to get too into it and, and tell your listeners wrong. But everyone should go look up hockey ETF, because I'm pretty sure that you can now trade an ETF tied to the performance of hockey teams. And yeah, I, I'll make a comment on that.

• 17:43Ed Zitron?

  Volatility shares has filed to launch an exchange traded fund for every NHL team, a set of products unlike anything currently trading. And I'm just not going to read the rest of that article because I'm going to put a gun in my, moving on. But that's the, this is the thing, like, again, talking of Vegas, though, we obviously love our gambling and we love our, our tax, we don't have to pay state tax, but there is also a, there are big guardrails around gambling there. And I should be clear, this is not me being pro gambling so as much as I am pro responsibility and restraint, wherever it can be found. But there are big, like, if you look too young in a casino, they can and they will

• 18:25Ed Zitron?

  come over and tell you to leave. If you look like you are too trash, they will actually pull you from a table. They're hesitant to provide credit. But I read a story the other day, I think it was one of the DraftKings one, it was ProPublica, I might be wrong on this one, where the story was they pretended to be a problem gambler and within a week they had a personal sales rep.

• 18:46Speaker 05

  Yeah, yeah, yeah, exactly. Well, the thing is, and like, what is the difference between a problem gambler and a profitable customer at a sportsbook? I would argue that there is not one. Something like, you know, five, I think there was a, a research in the Business Journal of gambling and sports, but I can't remember the exact journal, but some research published that, you know, something like 5% of sports bettors are responsible for more than 80% of all of the profit and revenue that sportsbooks generate. So a huge portion of profits come from a very small, potentially problematic source. And that,

• 19:28Speaker 05

  that ratio like roughly holds across vice industries. It's the same in, you know, marijuana, alcohol. This is called the addiction surplus. So it's this argument that the addictive nature of the product, you know, inherently makes it easier to sell to people who are more prone to addiction. And, you know, some researchers have argued that this leads vice industries to tamp down on consumer protections because, you know, on a gambling site, their revenues are tied one to one to consumer losses. So everything they do to protect consumers literally cuts into the bottom line.

• 20:08Ed Zitron?

  Jesus. I mean, yes, it, I think we need the Nevada Game Commission to come down on these people. That's the actual thing that I don't get though, because you, you spend your time in Vegas, people like, oh yeah, the NGC will mess you up. But it's somehow not effective on this one? Because just.

• 20:26Speaker 05

  Yeah. I mean, there's only so much they can do to, you know, require them to, you know, do certain customer protection measures. We're, we're also just in, in the US like way far behind other countries, you know, in, in the UK, for example, there's a lot more stringent consumer protection and, and regulations on, on gambling than there is in the US. Just because for sports betting in particular, you know, it's less than a decade that, that we've had this kind of nationwide fascination and thing with it. We're, we're a much more, the US is a lot more like historically in the way that we think about gambling. We think about Vegas, we think about slots. Whereas in the UK and

• 21:07Speaker 05

  some more European countries, sports betting is synonymous with gambling in a way that it really wasn't in the US until 2018.

• 21:16Ed Zitron?

  Yeah, I mean, it just feels, it feels like this isn't slowing down. It's very worrying to me.

• 21:24Speaker 05

  Yeah, I mean, we are seeing a bit of a taper in like, and a plateauing, I should say, in terms of total dollars wagered on online sportsbooks.

• 21:34Ed Zitron?

  Oh, really?

• 21:34Speaker 05

  Yeah, generally, yeah, generally gambling participation is going up. I would say more people are gambling than ever. That's an easy claim to make. Fifty percent of American men under the age of forty nine have an account on a digital sportsbook. So that's half, half of men under, under fifty in the US have an account on a digital sportsbook. So yeah, it's prevalent. You know, you watch NFL and it's, it's kind of built into the way that the commentators talk about the game now. It's generally unavoidable, I would say. And I think that there's a growing betting fatigue among the broader population. And we're starting to see that show up in rising tax rates in some

• 22:17Speaker 05

  states that have legal sports betting and a general questioning of whether, you know, state governments should have done this. But the problem is, you know, legalizing gambling is a great way to raise state revenues and get more money into the coffers of a state without raising taxes.

• 22:37Ed Zitron?

  Oh, does, does Kalshi, does Kalshi and Vanjul and all them actually provide state tax revenue?

• 22:44Speaker 05

  Yeah, the sportsbooks do. The problem is for states is that the prediction markets don't because they're federally regulated. So they don't pay state taxes. But, you know, if a state is like, well, I kind, you know, Ohio, for example, Governor Mike DeWine, I think he's still the governor, has, yeah, because the election's coming. Anyway, Governor Mike DeWine has called his decision to, you know, legalize sports betting in Ohio to sign that bill into law, one of the greatest mistakes of his, you know, fifty year political career. He, he has said that he regrets it deeply. But the problem is all of that tax revenue that comes from sports betting is now funding things like state pension funds and infrastructure. And

• 23:25Speaker 05

  so, once the state is seeing that money, it's very hard to then walk that back because they're putting it to use, you know?

• 23:32Ed Zitron?

  It's kind of like data centers, data center construction. I don't know. There's, there's all sorts of weird things that are happening with that as well. I don't want to get into because I'm already pissed off enough already.

• 23:41Speaker 05

  Yeah, yeah, yeah.

• 23:42Ed Zitron?

  By the, by the way, that, I was correct. It was a ProPublica story by Jake Pearson, which I'll link in the notes about how he blew eighteen hundred dollars in one night by chasing losses with bigger bets. And then the next day he got invited to audition for its VIP program. Truly evil. Just, I, I see that as nothing other than actually evil. And I, I don't know. I know that casinos did the same thing. I'm not defending them, but it's, I don't know. There are also big signs that say gambling problems. I find this whole thing just kind of repulsive and it's, the, America didn't need more gambling.

• 24:24Speaker 01

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• 24:54Speaker 06

  Cool fall nights always make me want to entertain more. A few friends around the table, maybe a fire outside when the sun goes down. Before everyone comes over, I stop at Total Wine & More. Right now, there's a cranberry flavored wine, a crisp apple wine, even a pumpkin spice cream that's perfect in coffee after dinner. And with the lowest prices, I can bring home a few different fall flavors for everyone to try. Find your favorite fall flavors at the lowest prices at Total Wine & More. Spirits are not sold in Virginia and North Carolina. Drink responsibly. Must be twenty one.

• 25:31Ed Zitron?

  While we are on the subject of problem gambling, you have a little story you're working on. I don't mean little in a small way. I mean, it's going to be very interesting that you're working on, that will be out by the time this goes out, just to be clear.

• 25:43Speaker 05

  Indeed, yes. I am working on a story publishing, hopefully today as we're talking, about the National Council on Problem Gambling. This is the largest nonprofit dedicated to mitigating problem gambling, gambling addiction harm, advocating at a federal level for more funding for gambling addiction, such and such. They're the main voice advocating for gambling addiction in the United States. And over the past, since January twenty twenty five, their organization has been going through a lot of turmoil, to put it gently. So the, the way that your viewers are probably most familiar with the National Council on Problem Gambling is they used to operate one eight hundred gambler.

• 26:28Ed Zitron?

  Right.

• 26:28Speaker 05

  So when you watch a, you know, a gambling advertisement, right now, at the bottom, you'll see, you know, gambling problem, question mark, call one eight hundred gambler or one eight hundred my reset. So last year, when, so, okay, I'll just, I'll give you the whole, there's a lot here. So I'll, I'll give you.

• 26:46Ed Zitron?

  Yeah, please, please.

• 26:48Speaker 05

  So, one eight hundred gambler, the phone number, is owned, the rights to it are owned by a affiliate organization of the NCPG, National Council on Problem Gambling, in New Jersey. So it's a New Jersey affiliate of the NCPG that owns one eight hundred gambler. And from twenty twenty one or so, they were licensing the rights to operate one eight hundred gambler to the NCPG. And the NCPG got like a six million dollar donation from the NFL to basically modernize the problem gambling helpline system. The way that it works is...

• 27:22Ed Zitron?

  How did they modernize it?

• 27:23Speaker 05

  Yeah, they basically, you know, that's a great question. They put more focus on data collection. So there, it was a question about, you know, you call the number and instead of getting help right away, you're being asked survey questions. That's something that I found in my reporting was happening. And basically, there were questions about whether or not individual call centers in individual states were up to, up to snuff, as it were, for the NCPG. So the NCPG decided that in Nevada, the Nevada call center, taking calls from, you know, area codes in Texas, Nevada, and, oh, I'm sorry, forgive me, the

• 28:05Speaker 05

  New Mexico call center, you know, whether or not it was providing high quality care to people dialing one eight hundred gambler. And one of the things that was happening at the New Mexico call center, run by, you know, just a handful of people, there's really not a lot of people that work in problem gambling. They had a Navajo speakers online at all times because the Navajo Nation is in New Mexico, you know, Native Americans have a higher rate of gambling problems than the rest of the population. And they would get a lot of calls from the Navajo Nation, you know, seeking to speak to Navajo speakers, work with them, et cetera, administer therapy help. And the NCPG made the decision to reroute

• 28:46Speaker 05

  calls away from the New Mexico call center, you know, basically with very little explanation. And, you know, this led to a number of calls being dropped, a number of Navajo speakers not getting help in a timely manner, calls getting transferred back to New Mexico in the middle of the night. Something similar happened in Florida, where the Florida call centers were not, you know, up to snuff in the view of the NCPG. And, you know, Florida was rerouted away. So New Jersey was getting wind of all of this and was like, all right, guys, we need to exercise more control over one eight hundred gambler. You guys are getting, you're being a little too overzealous with what you're doing. And the NCPG, you know,

• 29:28Speaker 05

  freaked out. There was a legal battle sparked between the NCPG and the, and the New Jersey Council. And what happened is eventually the NCPG lost control of one eight hundred gambler. So after spending six million dollars from the NFL and putting all this effort and money into upgrading the system, they lost it all. And one of the things that happened when they were modernizing the hotline is they worked with a lot of gambling firms to get it included into all of the ads. So all of these gambling operators, your DraftKings, your MGMs, et cetera, had one eight hundred gambler in their advertisements. And then all of a sudden, the organization that was operating it, like, lost control of it. So

• 30:12Speaker 05

  the operators are like, wait, what are we doing? Are we promoting the right resource? Basically, again, you know, cutting into, cutting into the way that service was, was happening. And then, in January...

• 30:24Speaker 05

  The NCPG hires Heather Moore, the new executive director of the NCPG. She has a reputation as an effective fundraiser, but she has no prior experience in problem gambling. And then in April, she tells board members that there is a potential new donor to the organization. One of the roles of a board of directors at a nonprofit is to vet corporate partnerships, talk about donations, the terms, et cetera. And so for that reason, it would be normal to have a board meeting. What wasn't normal is that before the meeting could begin, Heather Moore insisted that everybody sign an NDA.

• 31:06Ed Zitron?

  Just before the meeting?

• 31:08Speaker 05

  Just before the meeting, and that had never been done before.

• 31:10Ed Zitron?

  Very normal.

• 31:11Speaker 05

  Everyone needs to sign a non-disclosure agreement before I can tell you about this potential new partner.

• 31:16Ed Zitron?

  Great.

• 31:17Speaker 05

  Okay, fine. Everyone signs. And then Heather Moore reveals, okay, it's a $2 million donation, second largest in national council on problem gambling history, and the potential donor is Kalshi, the prediction market. So this raises a lot of red flags pretty much immediately. A number of donors to the NCPG are in lawsuits with Kalshi. A number of them have competing business interests. And Kalshi, as we were talking about earlier, being regulated by the feds, doesn't have the kind of consumer protections that are built into the regulations that govern sports books at the state levels. So there's a question of whether or not Kalshi is in alignment with the NCPG's mission.

• 32:00Speaker 05

  So all of these questions are coming up at the board meeting, and Moore says, well, unfortunately, we can't do anything about that because I actually already signed the deal with Kalshi. It's too late.

• 32:10Ed Zitron?

  Uh huh.

• 32:11Speaker 05

  And then like two weeks later, news comes out, and it basically drops like a bombshell in the gambling addiction advocacy community. I talked to this guy, Mark Lefkowitz. He's been involved with the NCPG since late 80s. And he said, the NCPG taking Kalshi's money is like, quote, "a national council on teenage sex abuse, taking money from Jeffrey Epstein," end quote.

• 32:35Ed Zitron?

  Hell, yeah. Nailed it.

• 32:39Speaker 05

  People are not happy. People are not happy about this donation. And then a bunch of other stuff at the NCPG starts going down. The woman who is the director of programs for the NCPG, her name is Jamie Costello. She resigned after four years. She was the longest running staff member, and she was overseeing all the helpline operations. So she had a very important job at the NCPG, and their staff was already spread pretty thin. So she put her three weeks in, and it wasn't connected to the Kalshi donation. She told me, quote, "I hold myself to things like respect and compassion and open, uncomfortable,

• 33:22Speaker 05

  transparent communication, and that just wasn't what I was experiencing as a staff member," end quote. So she resigns, and then gives three weeks' notice on a Monday. And Tuesday morning, she gets an email. It's her last day. You're done. And she gets cut out of her systems. So any assistance that she could have given to her staff members to help continue to run the National Problem Gambling Helpline, which is like the widest known addiction resource in the country, is now lost. And so there's a lot of turmoil going on there. And then, so that was on Tuesday. By Saturday, Heather Moore turns in her resignation to the board as well, after fewer than 10 months on the job.

• 34:04Speaker 05

  So amid all of this, a bunch of donors to the NCPG have been pulling out. The gambling regulators in Ohio and Michigan, the problem gambling councils in Nevada and Washington, all pulled out of the NCPG after decades-long relationships. Basically, the upshot is that at a time when gambling addiction and gambling participation are on the rise, because remember, they're tied together, the main organization that advocates at a federal level for there to be federal funding for gambling addiction and research, all of that stuff, they are in complete disarray.

• 34:47Ed Zitron?

  And there's no one else to pick up the slack, really?

• 34:49Speaker 05

  Pretty much, yeah. There's no one else that's necessarily seen as kind of the top person, the top voice. And so, yeah, it's a very, I think, I hope that your listeners go on and read the story because it's quite a, like a step-by-step retelling of what's been going on. But yeah, I mean, it's pretty concerning for a lot of advocates and people that work in the problem gambling space because this organization, which for the past, since the 70s, has been the primary org coordinating a response to rising levels of gambling addiction, is now in the wind, as it were.

• 35:28Ed Zitron?

  All right. So I just want to repeat this. Email me if you hear any gambling ads on this show, anything like that I want to hear. I want them off the show. Fuck these people. I don't know. I find that, I didn't think that things would have improved since we last talked, but the idea of the main gambling addiction site being fucked over, not site, sorry, the idea of the main gambling helpline being basically destroyed, and the organization behind it is extremely grim. Is there any effort to make any of this illegal, though? Is there any efforts to try and bring this down as we wrap up here?

• 36:04Speaker 05

  Honestly, not really. I mean, it makes so much money, Ed. That's the thing.

• 36:12Ed Zitron?

  How much money does it make in comparison to the other industries?

• 36:14Speaker 05

  How much money does the gambling industry make?

• 36:17Ed Zitron?

  Yeah, I mean specifically the prediction markets and such.

• 36:20Speaker 05

  Well, prediction markets, they don't have as great of revenues as the sports books. I don't have those numbers right in front of me for the comparison, but...

• 36:31Ed Zitron?

  But I mean, even with the online sports books, the DraftKings and the FanDuel's and such.

• 36:36Speaker 05

  Yeah, they're making a lot. I mean, suffice it to say that their margins are very good because they are selling a product that is very easy to sell. It's easy to sell and get people into gambling because it makes your brain feel great. People that were selling cigarettes did not exactly have a very difficult job because people were addicted to cigarettes. And the main way that people engage with gambling these days, online sports betting, is very frictionless. It used to be that you would go to the horse track, and there were a dozen races in a single day. And all of your gambling, the highs and the lows of it, were spread out throughout the course of a day.

• 37:18Speaker 05

  Now, within a single quarter of a football game, you can be placing dozens of bets every minute, and it's in your phone. Everyone has a casino in their pocket these days. And as I say, there is less and less ability for the people who want to do good and protect people who are being harmed by this product to actually step in and make things happen.

• 37:41Ed Zitron?

  Is there anything that people can do? I'm trying to find some way through that. Are there organizations that are worth donating to? Like, Jesus Christ.

• 37:50Speaker 05

  Yeah, I don't know if I can make that kind of recommendation, but I would just say that everyone, here's my one thing. If you have a friend who ever says to you, "Oh, I lost X amount of money, so I have to keep betting to win it back," you need to have a conversation with them right then and there. That's called chasing losses. That's one of the strongest predictors of gambling-related harm. And gambling addiction, I know you keep searching for a silver lining here, Ed, but I'm going to just keep bombarding you with depressing statistics.

• 38:21Ed Zitron?

  Sounds good.

• 38:22Speaker 05

  Gambling disorder is one of the hardest addictions to necessarily spot. There's no urine test you can take that shows you've been spinning roulette all night, right? There's no track marks on your arm. People can hide their financials from their families. But the difference is that gambling addiction is one of the most dangerous. If you have a gambling disorder, there's a 20% chance that you'll attempt suicide in your lifetime. That's the highest of nearly any mental health disorder. It's got a ton of comorbidities. You're more likely to have a substance use disorder, depression, anxiety. It's associated with homelessness, crime, financial desperation, child neglect, domestic abuse, all of this stuff.

• 39:06Speaker 05

  And again, there's no federal funding. There's no federal funding for gambling addiction research. None, zero. Compare that to...

• 39:18Ed Zitron?

  I'm just going to say, then, I think the thing you have to do is, if you have a friend who has a gambling addiction, do not try and just morally attack them. That's the one thing I'll say. I've known a few people who have had that in Vegas. It's like, be there and listen to them, and try and work out what it is they're trying to feel and why they're trying to feel that. I think it's the best I can say.

• 39:38Speaker 05

  Nobody starts drinking because they think they're going to become an alcoholic, and nobody starts gambling.

• 39:44Ed Zitron?

  Or because they're having a great time.

• 39:45Speaker 05

  Because they're having a great time. And I think that there is a notion that gambling addiction is a moral failing, and if you were only responsible enough, you wouldn't have a gambling addiction. But this idea of responsible gambling, that's been pushed a lot by the industry because you'll know that puts the onus on the consumer to be responsible rather than on the corporation that's selling the addictive product to do so in a more responsible or better way. So this idea that individual consumers have the power to stop themselves when they begin to experience addictive behaviors, it's just incorrect.

• 40:25Speaker 05

  And I think, hopefully, as it becomes more widespread, which is very unfortunate, hopefully one of the positives is that is that there's more understanding of the fact that this is just brain chemistry. People can't help themselves. And so we need to be there for them and understand what they're going through and not moralize it.

• 40:46Ed Zitron?

  Hey, I like that as an ending point. Nick, where can people find you?

• 40:49Speaker 05

  You can find me on barrons.com, B-A-R-R-O-N-S. Or if you're in New York City, you can pick up a copy of our print issue out on newsstands every Saturday, every week.

• 41:02Ed Zitron?

  Hell, yeah. And you can find me on betteroffline.com and google.com/poison. That's where you find me now, slash poison. All right, you've been listening to Better offline. We're back with a monologue this week. Cheers. Thank you for listening to Better Off. The editor and composer of the Better Offline theme song is Matt Osowski. You can check out more of his music and audio projects at mattosowski.com. M A T T O S O W S K I dot com. You can email me at [email protected] or visit betteroffline.com to find more podcast links and of course my newsletter.

• 41:44Ed Zitron?

  I also really recommend you go to chat dot where's your ed dot at to visit the Discord and go to r slash better offline to check out our Reddit. Thank you so much for listening.

• 41:54Speaker 03

  Better Offline is a production of Cool Zone Media. For more from Cool Zone Media, visit our website, coolzonemedia.com, or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.

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