Against the Rules with Michael Lewis
Episode 5: The Mule
Release Date: November 19, 2024

In Episode 5 of Against the Rules with Michael Lewis, titled "The Mule," host Michael Lewis delves deep into the intricate world of legalized sports betting in America. This episode unpacks the complexities of sports gambling, focusing on the roles of smart bettors, the mechanisms sportsbooks employ to manage them, and the emergence of "mules" — individuals who place bets on behalf of seasoned gamblers. Through engaging discussions and real-life experimentation, Lewis and his producer, Lydia Jean Cott, shed light on the evolving landscape of sports betting and its broader implications for players, teenagers, and fans alike.

Introduction to the Mule Experiment

[02:17] Michael Lewis introduces the experimental premise of the episode:

"A few months ago, I asked my executive producer to download a bunch of online sports betting apps and open up accounts with them. Partly because I live in California, where sports betting isn't yet legal, and Lydia Jean Cott, my producer, lives in New York, where it is legal. And partly because, well, I just thought it would be kind of fun to see what would happen when you thrust someone like LJ into the sports gambling jungle."

Lewis's objective is clear: to understand how sports betting platforms engage with new users, especially those without prior interest or knowledge in gambling.

Navigating the Betting Apps

Lydia Jean Cott ([03:00]) takes on the role of a novice bettor, aiming to explore the interfaces and initial interactions with major sports betting apps like FanDuel and DraftKings.

"So, you know, once I log in, I see on my screen it's honestly a really overwhelming view of things. It's all blue. It says FanDuel Sportsbook. And there's a ton of different options."

[03:58] Lydia Jean Cott observes the app's design nudging her towards specific betting actions:

"So, like, if I were to just open it and have no plan, it says, like, popular same game parlay bets is what I'm being nudged to do or bet on the Battle of the Birds on Monday Night Football."

This highlights how betting platforms use user interface strategies to guide bettors towards particular types of wagers, often favoring high-margin bets.

The Role of the Mule

Michael Lewis introduces the concept of a "mule" in sports betting — a person who places bets on behalf of a skilled gambler, often to bypass betting limits and maximize profits.

[06:00] Michael Lewis explains:

"L.J. will be a different kind of mule. For a start, she'll need a lot more breaking in than most."

Lewis further elaborates on the mechanics:

"Rufus loads the backs of his mules with cash and whacks them on their fannies and they saunter off into the marketplace and then return to him weighted down with even more cash."

This metaphor illustrates how mules like Lydia are essential for experienced gamblers like Rufus Peabody to navigate betting platforms that impose strict limits on high-stakes bets.

Challenges Faced by Mules

As Lydia begins placing bets, she encounters the initial hurdles of the system designed to detect and limit smart bettors.

[07:21] Lydia Jean Cott expresses her willingness to take risks:

"I'm willing. That's like. Yeah, I'm okay with that."

However, the reality of being a mule quickly surfaces as betting platforms start monitoring her activities.

By [11:20], Lydia has placed her first significant bet, but the process is fraught with uncertainty and anxiety:

"It's crazy how quickly you can, like, disassociate from, like, what these numbers mean."

Detection and Limitations

The episode delves into how betting companies use algorithms to identify and restrict smart bettors. These algorithms monitor betting patterns that deviate from typical recreational gambling behavior.

[22:19] Lydia Jean Cott introduces the concept of stake factoring:

"They might give you a stake factor of 10%. And they might say, okay, you are only allowed to bet $500. Once they realize or believe that you are incompetent, they might give you a stake factor of up to 10 times the amount."

This mechanism ensures that sportsbooks maximize the number of bets placed by less skilled gamblers, who are more likely to lose over time, thereby increasing the house edge.

VIP Programs and Their Manipulations

To further exploit the betting habits of less experienced gamblers, sportsbooks offer VIP programs. These programs are designed to entice bettors to continue wagering, often through personalized incentives.

[25:00] Lydia Jean Cott describes her interactions with a VIP host:

"Hey, man, look, look, look, I know you're really frustrated. I'm sorry you lost. Don't worry, I'm going to take care of you. But please, please do not put messages like that in writing."

Such interactions underscore the manipulative tactics employed by sportsbooks to retain bettors who are exhibiting patterns of potential addiction or persistent losses.

Lydia's Struggles and Turning Point

As Lydia continues her role as a mule, she begins to face restrictions from multiple sportsbooks. By [33:04], FanDuel and DraftKings have significantly limited her betting capacity:

"DraftKings wouldn't let her... the cost here."

Despite these setbacks, Lydia receives an unexpected invitation from BetMGM, one of the sportsbooks that hasn't restricted her yet.

[34:43] Lydia Jean Cott narrates the offer:

"This morning I woke up to a text message that says the following from a number that's not in my contacts. Hi Lydia, this is Courtney from BetMGM. I wanted to reach out and introduce myself as your VIP account representative host."

This invitation highlights how sportsbooks differentiate their engagement strategies based on the bettor's perceived potential.

The Impact on Trust and Future Betting Landscape

The episode concludes by reflecting on the delicate balance sportsbooks must maintain:

[24:02] Michael Lewis muses:

"Once you're on the inside, wouldn't they spot that your behavior changed? You don't want to continue to play stupid Bets, Right."

The interaction between mules and sportsbooks reveals a broader narrative about trust erosion in American institutions reliant on public confidence. As sports betting becomes more entrenched, understanding these dynamics is crucial for bettors, regulators, and society at large.

Key Takeaways

• Sportsbooks Use Advanced Algorithms: To detect and limit smart bettors, ensuring the house maintains its edge by encouraging less skilled gamblers.

• The Role of Mules: Essential for experienced gamblers to bypass betting limits, but mules face significant challenges, including account restrictions and psychological stress.

• Manipulative Tactics: VIP programs and personalized incentives are employed to retain and exploit persistent bettors.

• Trust Erosion: The strategies used by sportsbooks contribute to a broader discussion about trust in organizations that manage public interests and finances.

Notable Quotes

• Michael Lewis [03:00]:

  "LJ is perfect for it. I've sent her to interview people who should be extremely wary of any journalist. They're basically never wary of her."

• Lydia Jean Cott [19:32]:

  "I'm going to be placing 1, 2, 3, 4, 5, 6, 7 bets. And the fun thing about it also is that I don't understand at all what they are."

• Michael Lewis [21:23]:

  "As of now, I'll probably be placing like another $10,000 after we get off the phone and I'll be sweating."

• Lydia Jean Cott [26:07]:

  "It's disgusting. It's absolutely disgusting."

Conclusion

Episode 5, "The Mule," offers a compelling exploration of the shadowy mechanisms behind legalized sports betting in America. Through Lydia Jean Cott's firsthand experience as a mule, Michael Lewis exposes the intricate dance between bettors and sportsbooks, highlighting the ethical and psychological implications of a system designed to capitalize on both the naive and the savvy. This episode not only demystifies the operational strategies of betting platforms but also raises pertinent questions about fairness, trust, and the future of sports gambling in the United States.

For more insights and in-depth analyses, listeners are encouraged to tune into Against the Rules with Michael Lewis on the iHeartRadio app, Apple Podcasts, or their preferred podcast platform.