Episode 6: VIP

Summary

Against the Rules with Michael Lewis Episode 6: VIP Release Date: November 26, 2024

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Introduction to the Episode

In Episode 6 of "Against the Rules with Michael Lewis," titled "VIP," host Michael Lewis delves deep into the burgeoning world of legalized sports betting in America. This episode explores the intricate dynamics between sports gamblers, betting companies, and the broader societal implications of this rapidly expanding industry. Through personal narratives, expert insights, and a meticulously crafted experiment, Lewis paints a comprehensive picture of how sports betting is reshaping the lives of individuals and the fabric of American society.

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The Experiment: Lydia Jean Cott as a Sports Betting Mule

The episode begins with Michael Lewis introducing a daring experiment spearheaded by his producer, Lydia Jean Cott. Partnering with Rufus Peabody, a renowned sports gambler who has consistently outperformed the market over 15 years, they embark on an unconventional journey. Rufus entrusts Lydia with substantial funds, instructing her to place bets on sports Lydia is unfamiliar with, primarily golf. This setup aims to test the robustness of sports betting platforms and the challenges faced by novices in the gambling arena.

Notable Quote:

Michael Lewis [01:35]: "Unlike all but a handful of sports gamblers, Rufus Peabody has always had an edge."

As the experiment unfolds, Lydia encounters significant hurdles. Major platforms like DraftKings and FanDuel quickly limit her betting capacities, propelling her to explore numerous other gambling apps. Within weeks, Lydia navigates a labyrinth of restrictions, illustrating the precarious balance between accessibility and control in the sports betting industry.

Notable Quote:

Lydia Jean Cott [03:18]: "I've placed $110,000 since we started, which is pretty good. It's my salary."

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The Expanding Sports Gambling Market and VIP Systems

As Lydia immerses herself deeper into the world of sports betting, she inadvertently becomes a "VIP" — a status that grants privileged access to perks like personalized concierges and exclusive event invitations. However, this VIP status reveals a darker side of the industry. While seemingly rewarding, these privileges are often indicative of individuals struggling with gambling addictions.

Notable Quote:

Michael Lewis [05:07]: "Not a bad situation, because LJ is now that most coveted of things. A sports betting VIP."

The narrative intensifies when Lydia's VIP status is abruptly revoked after a series of smart yet substantial bets. This setback underscores the precariousness of maintaining VIP status and raises questions about the true intentions of sports betting companies.

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Personal Story: Jeff Gordon's Struggle with Sports Gambling

Michael Lewis introduces Jeff Gordon, a quintessential representation of a problem gambler. Jeff's journey from a promising start in sports betting to spiraling into addiction highlights the personal toll of this industry.

Notable Quote:

Jeff Gordon [10:18]: "It was $100,000, which, to me, was a lot of money for a $30 bet."

Jeff's narrative is a stark reminder of how easily one can transition from recreational betting to compulsive gambling, especially with the proliferation of accessible betting platforms. His story emphasizes the emotional and financial devastation that can ensue, often exacerbated by the lack of effective support systems within the industry.

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Research Insights: The Socioeconomic Impact of Legalized Sports Betting

The episode features insights from Charles Fain Lehman of the Manhattan Institute and Matt Schuler, Ohio's sports gambling regulator. Their discussions shed light on the broader societal repercussions of legalized sports betting.

Matt Schuler presents alarming statistics indicating that every dollar spent on sports gambling results in $2 of investment or foregone savings, pushing households into greater financial instability. This economic strain disproportionately affects already precarious households, increasing risks of defaulting on credit, delinquency, and bankruptcy by 25 to 30%.

Notable Quote:

Matt Schuler [21:09]: "Households on average become much more precarious... the risk of bankruptcy goes up 25 to 30%, which is a big jump from a low baseline."

Additionally, the correlation between sports gambling and increased rates of intimate partner violence further underscores the deep-seated societal issues stemming from widespread gambling addiction.

Notable Quote:

Matt Schuler [23:08]: "When the home team has an upset loss in an NFL game, there is a statistically significant increase in rates of intimate partner violence."

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Regulatory Challenges: Matt Schuler on Sports Betting Oversight

Matt Schuler elaborates on the complexities and shortcomings of regulating the sports betting industry. He highlights how sportsbooks exploit their regulatory mandates to target profitable yet problematic gamblers under the guise of responsible gaming. This strategy effectively sidelines genuine problem gamblers while keeping seasoned gamblers, who pose a financial threat to these companies, at bay.

Notable Quote:

Matt Schuler [28:09]: "We know there is a big problem with a predatory approach to people who are inclined to lose and double down and lose."

Furthermore, Schuler discusses deceptive practices by sportsbooks, such as automatically converting multiple straight bets into parlay bets, which are more lucrative for the companies but significantly increase the gamblers' chances of loss.

Notable Quote:

Jeff Gordon [25:28]: "If you place three straight wagers... that app will automatically take your three separate straight bets and turn it into a parlay bet."

These regulatory lapses not only facilitate the perpetuation of gambling addiction but also exacerbate the financial and emotional turmoil experienced by gamblers.

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The Broader Implications of Sports Betting's Design and Its Future

The episode concludes with a sobering reflection on the future trajectory of the sports betting industry. As algorithms and AI become more sophisticated, the systems designed to identify and exclude problematic gamblers are becoming more adept at eliminating those who pose the greatest financial risk to themselves and their families. This evolution suggests a future where the VIP lounges of sports betting are exclusive to those perpetually on the losing end of their wagers, maintaining a cycle of addiction and financial ruin.

Notable Quote:

Michael Lewis [38:04]: "This world LJ was trying to enter is not just filled with problem gamblers. It's built for the problem gambler."

Lydia Jean Cott's portrayal of the VIP experience, which ultimately leads to exclusion and disillusionment, encapsulates the inherent flaws within the sports betting ecosystem. The episode serves as a cautionary tale about the unchecked growth of an industry that prioritizes profit over the well-being of its participants.

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Conclusion and Key Takeaways

Episode 6: "VIP" of "Against the Rules with Michael Lewis" offers an incisive exploration of the sports betting industry's impact on individuals and society. Through personal experiments and expert analyses, the episode highlights:

• The Manipulative Nature of Sportsbooks: Sports betting companies employ strategies that often target and exacerbate gambling addictions, under the pretense of responsible gaming.

• Economic and Social Consequences: Legalized sports betting has tangible negative effects on household finances and contributes to broader social issues like domestic violence.

• Regulatory Deficiencies: Current regulatory frameworks are insufficient in addressing the predatory practices of sportsbooks, allowing them to prioritize profit over consumer protection.

• The Future of Sports Betting: As technology advances, the industry's focus on eliminating profitable gamblers may lead to an environment that is increasingly hostile to the vulnerable, perpetuating cycles of addiction and financial instability.

Michael Lewis's "VIP" serves as a critical examination of a pivotal issue in modern American life, urging listeners to reflect on the true cost of legalized sports gambling and the urgent need for more effective oversight and support systems.

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This summary captures the essence of Episode 6: VIP of "Against the Rules with Michael Lewis," providing a comprehensive overview for those who have yet to listen.

Transcript

[Michael Lewis]

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[Michael Lewis]

So as I explained last episode, we've created this experiment. My producer, Lydia Jean Cott, has partnered up with one of the world's smartest sports gamblers. Rufus Peabody is his name. Over the past 15 years, Rufus has made many millions of dollars betting on sports. He's had the occasional losing week, but never a losing month, much less a losing year. Unlike all but a handful of sports gamblers, Rufus Peabody has always had an edge. The deal was this. Rufus would turn LJ into one of his mules. He'd send her money and the bets he'd like to make, and she'd make them on sports that she knows nothing about. Like golf. She'd just open as many accounts with sports gambling companies as she could and get as much money down as they'd take. I didn't have the first clue how this would work out. I started to think it wouldn't work out at all. Especially after DraftKings froze LJ's account after just two bets and FanDuel came in right after and refused to accept anything but small bets. But there are right now dozens of these gambling apps. And three weeks into her new career as a pro gambler, LJ's life is obviously still kind of nuts. So nuts that she's no longer keeping me up to date on it. But I can see it on My phone. There's this text thread that's the length of an epic poem. My producer has this whole other life after dark. I wake up in the morning, and I Find I have 274 new messages on Telegram. And I can't figure out. I mean, it's. Oh, it's just you and Rufus going back and forth. What's going on?

[Lydia Jean Cott]

Okay, so, I mean, I placed a bunch of bets this weekend.

[Michael Lewis]

How many bets?

[Lydia Jean Cott]

So many bets, actually.

[Michael Lewis]

How many bets?

[Lydia Jean Cott]

Okay, total. I've. Total. I've placed $110,000 since we started, which is pretty good. It's my salary.

[Michael Lewis]

She's bet the equivalent of her annual salary. The sports bookies that will still take her big bets are the ones she's lost money to. These places seem to want her business more than ever.

[Lydia Jean Cott]

Like, every five seconds, I get a bonus. And they're always like, open your app now to get this. And I'm like, no.

[Michael Lewis]

She's somehow gotten her debit card tied to her gambling accounts. She's been moving so much money around that her own bank is trying to shut her down.

[Lydia Jean Cott]

I basically locked my debit card, which I didn't know was a thing. So then when I tried to buy a coffee, it got declined, which has never happened to me.

[Michael Lewis]

How did you pay for your coffee?

[Lydia Jean Cott]

The barista covered me.

[Michael Lewis]

Really?

[Lydia Jean Cott]

Yeah. He was like, I'm sorry, this seems like a bad situation for you.

[Michael Lewis]

Not a bad situation, because LJ is now that most coveted of things. A sports betting vip. A lady named Courtney at MGM texted her with the news, which is odd. LJ has only made, like, $49,000 worth of bets at BetMGM, and she's only lost, like, eight grand to them. But they've assigned her a personal concierge and invited her to see Charlie XCX at Madison Square Garden. Just handed her two tickets worth thousands of dollars. I actually have no idea who Charli XCX is. To me, it sounds like a new model of mountain bike. But LJ's thrilled and also worried. What if these people discover who she really is? What if they realize she's their worst nightmare?

[Beckett]

It'll be just like going to any hosted VIP event at Madison Square Garden.

[Lydia Jean Cott]

Okay, like, I've never done that.

[Michael Lewis]

That's the altered voice of someone we're calling Beckett. Like Rufus Peabody. Beckett's a player with an edge. Unlike Rufus, Beckett has, on several occasions, managed to become a vip.

[Beckett]

You know, there'll be boxes and suites, and you'll be told where to go, and you'll go up onto a special floor and ushered into a large room which has been reserved by BETMGM for all of their corporate hospitality stuff, whether it be a sports event or a music event. There will be a few other people in the VIP program there and there will be a few other people that work for Venom gm. And there will be free food and free booze and a great view of the band.

[Michael Lewis]

Beckett gives LJ a goal fake being a degenerate gambler so well that they raise her betting limits from like 5 to $50,000. A popular. But LJ is still fixated on how to act like a VIP.

[Lydia Jean Cott]

I don't know, like, I guess, should I pretend to be someone other than myself?

[Beckett]

No.

[Lydia Jean Cott]

I feel like just being myself. A podcast producer in New York who is just a little wealthier than I actually am in real life and enjoys betting a little more than I do in real life.

[Ariella Markowitz]

And we love golf. We love golf.

[Michael Lewis]

That's Ariella Markowitz, another producer on our show who's flying in from California to be LJ's +1 at Charli XCX and who is so into it.

[Ariella Markowitz]

How sophisticated should our golf vocabulary be? I feel like I should start reading more.

[Beckett]

I mean, you know, if you try and become conversant in it, I think that just leads to more risk. Because if then something, you know, doesn't make sense and then you're drawn into a deeper conversation about stuff that you, you know, you don't feel comfortable talking about. I just. I just wouldn't.

[Ariella Markowitz]

Okay, we'll pepper it in if we need to.

[Beckett]

There we go. Some light peppering.

[Lydia Jean Cott]

Do you have any backstories for us as to, like, how we're wealthy?

[Beckett]

I would keep it vague, but I would, you know, family wealth or, you know, been saving for years, something like that. Maybe you'd been investing for a while and you got bored of it, so you pulled your money out of the stock market and decided to gamble with it instead.

[Lydia Jean Cott]

Yeah, that seems like going to be a really hard thing for me to pull off saying casually.

[Ariella Markowitz]

For me, I'm like, dead relative. They gave me money. I'm stupid. Gotta honor her. May their memory be a blessing.

[Lydia Jean Cott]

Like, is that what you do? You go and say stuff like that? Like, have you done that?

[Beckett]

Yeah, I mean, I've said all kinds of things to all kinds of people. I don't want to give away too much.

[Michael Lewis]

He really doesn't. He doesn't want us to use his real name or his real voice. And he's certainly not going to tell us all his secrets. But even he's interested. He's never seen anyone with no interest in sports or gambling try to fake being a degenerate sports gambler.

[Lydia Jean Cott]

I'm gonna. I might try just the no lie route. Do you co sign that Beckett?

[Beckett]

Yeah, I totally approve. I think that's the way to do it.

[Ariella Markowitz]

Beckett approved.

[Beckett]

Fully. Beckett approved.

[Michael Lewis]

Beckett approved. And I did, too. I'm Michael, and this is against the rules. Can I just pause for a moment to ponder this strange situation? Just how weird this new sports gambling market now is. The biggest sportsbooks, Fanduels, and DraftKings, the two companies that basically control this market, have gotten so expert at spotting smart gamblers and kicking them out that they've already mostly kicked out lj which, of course, is not exactly a human tragedy. But you might think that the sports gambling companies could also use their shrewd algorithms to identify people with gambling problems and kick them out, too. As it turns out, not so much.

[Jeff Gordon]

My name is Jeff. I'm from New Jersey. What else?

[Michael Lewis]

Jeff Gordon is one of those people who no one bothered to identify. As he says he grew up in New Jersey. He didn't play sports, but he was a sports fan. As a kid, he prided himself on his sports knowledge. And in early 2016, he saw a billboard ad for a DraftKings fantasy basketball tournament. He was 24 years old. He paid 30 bucks to enter the tournament, and to his delight, he finished second overall out of 50,000 players. This further convinced him that he could predict whatever would happen on a basketball court better than other fans.

[Jeff Gordon]

It was $100,000, which, to me, it was a lot of money for a $30 bet.

[Michael Lewis]

It is a lot of money for a 30 to everybody. It's a lot of money for a $30 bet. I mean, that's incredible.

[Jeff Gordon]

Yeah, it kind of. I have a concept of what money is, but at the time, it was like water. You can go through that very quickly. I think I was. I think I bought myself a car, and the rest of the money was gambled away within, I want to say, a couple months. Not even gambled away.

[Michael Lewis]

In fantasy leagues.

[Jeff Gordon]

In fantasy leagues. In the daily fantasy tournaments and sports betting.

[Michael Lewis]

When was the first time you thought, I have a problem?

[Jeff Gordon]

When I was watching the six figures turn to five figures, to four to three, and it hit about four figures in my bank account, I said, this. This is bad.

[Michael Lewis]

But Jeff didn't stop or even really slow down. Just the reverse. Because the year after his big win, New Jersey legalized mobile sports gambling. By 2019, everyone in New Jersey now had a casino in their pockets. And Jeff had zero ability to ignore it.

[Jeff Gordon]

When you hear that these that you can bet on in game parlays, you can do in game betting. Player bet, like, it's just crazy. When it. When that was introduced, I wasn't as. I didn't have as much money as I did when. It was really daily fantasy. But I was still involved heavily.

[Michael Lewis]

He started losing money that he didn't have. He scrounged for money wherever he could, took out loans, and he did stuff he never imagined himself capable of.

[Jeff Gordon]

My wife and I were saving for our wedding. We had an account and I dipped from that account and that was pretty low. Dipped into some other money that I shouldn't have gotten my hands on.

[Michael Lewis]

What did it feel like when you were doing it?

[Jeff Gordon]

During the time all I cared about was getting that next bet in. But once that bet was in or once the. Once. Once I lost, I felt like such a slimy, nasty piece of garbage because I stooped to such a low level to get a bet in.

[Michael Lewis]

You didn't need an algorithm to see that Jeff had a problem. But an algorithm could easily have spotted it.

[Jeff Gordon]

It's all about the action for the compulsive. For me, I'll speak for myself. It's not about the money.

[Michael Lewis]

Does everybody kind of agree it's not about the money?

[Jeff Gordon]

Absolutely. One of my favorite sayings is we could fill this room up with hundred dollar bills and it still wouldn't be good enough for us.

[Michael Lewis]

Jeff doesn't have a drinking problem. Jeff doesn't do drugs. Jeff doesn't feel the appeal of any other addictive behaviors. It's just sports gambling. But the pull is strong. So strong that even after his wife throws him out of their home, even after he's forced to move back in with his parents, even then he still keeps on punching his bets into DraftKings and FanDuel.

[Jeff Gordon]

It made me, what I feel was a monster. And it's hard to. It's very hard for me to say, like to let myself, to forgive myself, so to speak, because of all the relationships I've strained, the money I've taken. And it's just. It just made me an angry, angry person. Very irritable. Just like dope sick almost. I want to say, like I've never been dope sick. But it was like unless you're in action, you're not actually. You don't feel human.

[Michael Lewis]

The sports gambling companies have this phrase, responsible gaming. The idea is to Let everyone else off the hook of worrying too much about the Jeffs of the world, whose behavior is totally unaffected by the warnings. Gambling addiction can make change seem out of reach, but help is closer than you think. Ready for a fresh start? Visit ny.govnyresponsiblegaming to learn more. These PSAs are a little like the safety talks on airplanes, blasted at everyone and listened to by no one. Anyway, at some point into his sports gambling life, Jeff began having suicidal thoughts. He'd made plenty of bets and lost piles of money, but no one from the sports betting companies picked up on it. No one called. No one suggested he take a break. Did you ever feel like they were trying to detect that you had a problem so they could get rid of you or get you to help?

[Jeff Gordon]

I would not say that, no, no, they would. The more money you spent, I feel like the more you get the emails, I know that they had those, they have cool off periods, but it's very easy to turn off a cool off or it's very easy to use another account if you truly want to. If you want to gamble, you're going to find a way to sports bet.

[Michael Lewis]

It actually didn't occur to Jeff that the new sports gambling industrial complex bore any responsibility at all for what had happened to him. That he was at the mercy of these new commercial forces that in some earlier age he, he might never have encountered. He just blamed himself. It wasn't until his wife persuaded him to join Gamblers Anonymous that he saw just how toxic the environment was.

[Jeff Gordon]

I see people come in, young, young kids, and they're getting emails spammed to them from FanDuel and DraftKings. They're just getting bombarded. It's so enticing. It's so enticing. And that's just the world that we live in.

[Michael Lewis]

You have to, you have to adapt and defend yourself.

[Jeff Gordon]

Exactly. That's all I can do is keep going to the program, keep going to meetings, speak, be around like minded people who want to get better and want to do the right thing. Because I know if I go back down that road, I'm going to end up doing the shady stuff that got me to the point of nearly taking my life. I would go to sleep every night praying that I don't wake up.

[Michael Lewis]

Jeff's just one guy with a problem who my producer sort of randomly found in an online chat room full of problem gamblers. And he was brave enough to talk with us. One guy with a problem you pick up in a chat room isn't exactly science or even social science. But this one guy happens to be almost perfectly representative of a very big social problem.

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[Matt Schuler]

What's really interesting about gambling in general and sports gambling is a subset of gambling, but gambling in general is the way in which is sort of the most efficient kind of addiction.

[Michael Lewis]

Charles Fain Lehman of the Manhattan Institute, which calls itself a right of center think tank. So I guess Charles has just done a right of center dive into a bunch of new academic research about sports gambling.

[Matt Schuler]

I think about slot machines which are just designed to slowly, gently take you down to zero. It's like you can have a complicated relationship with marijuana, you can have a complicated relationship with heroin, as it turns out. But gambling addiction, if you gamble compulsively, you just keep doing it until you have lost all of your money. It's very efficient and so it's very informative.

[Michael Lewis]

It's informative because its outcomes are so clean. But it's also informative because of the way sports gambling has rolled out over the past five years state by state. If the states had legalized sports gambling all at once, its effects would be harder to study. But this is like a giant natural experiment. You have data being generated in states that have approved gambling side by side with states that haven't. Walk me through some of the research that has sort of affected the way you think about it.

[Matt Schuler]

The bottom line is that economic outcomes get much worse. And more precisely, households on average become much more precarious. And in particular, the kinds of households that are already at risk of precarity become much more precarious. And what I mean by that is their risks of defaulting on credit go up, their risk of going to delinquency goes up, their risk of bankruptcy goes up 25 to 30%, which is a big jump from a low baseline.

[Michael Lewis]

1 Jeff is disturbing. A million Jeffs is a big social problem. And what the research is showing is that every day America has a lot more Jeffs.

[Matt Schuler]

One of the sort of shocking numbers is for every dollar spent on sports gambling, $2 of investment or foregone money transferred into your like, Schwab account or whatever, people are spending it today rather than on tomorrow. And then the point about, you know, the most precarious is that when you sort of dig down into who is most affected, it is generally A, young men who across a variety of indicators are prone to risky behaviors, self harming risky behaviors. And B, it is often those households that already have problems with credit already have some history of bankruptcy or delinquency. And so those people who are sort of already primed to not make the most Responsible decisions have gas poured on the fire.

[Michael Lewis]

Of course, a gambling problem first reveals itself as a money problem. But when a money problem is caused by a gambling problem, there are some shocking side effects.

[Matt Schuler]

When the home team has an upset loss in an NFL game, there is a statistically significant increase in rates of intimate partner violence, domestic violence. The increase is even larger in states that have sports gambling. And the point is, not only is sports gambling leading people who might not have great judgment into really terrible situations for themselves, it is contributing to these terrible situations for the people who they are surrounded with their loved ones, their partners, et cetera.

[Michael Lewis]

It's amplifying fan emotion.

[Matt Schuler]

Yes, if you know it feels bad to lose a big bet, it feels particularly bad if you have everything riding on it. And if you're the sort of person who has everything riding on it, maybe it's not great that you were able to place a big bet from your phone in the first place.

[Michael Lewis]

The argument that people made back before sports gambling became legal is that Americans were already betting on sports. Legalize it and regulate it, and it'd be easier to identify people with gambling problems and help them to get help. What's happened instead is that more people are developing gambling problems because more people are gambling. I mean, that's why in states that legalize sports gambling, the savings rate falls and the bankruptcy rate rises. So you gotta kinda ask, why is this social experiment going so wrong?

[Jeff]

Ohio generally is the caboose when it comes to gambling, and that's not a bad place to be because you learn so much from all of the states that have come before.

[Michael Lewis]

Meet Matt Schuler, Ohio's sports gambling regulator. Ohio only legalized sports betting last year, but it already allows 17 different mobile sports gaming apps. Up till now, Matt's job has been to regulate casinos in the state. This new form of gambling, well, it's added a whole new wing to Matt's duties. Not all of the states that legalize sports gambling have someone like Matt, but most of them do. Someone who's never regulated sports gambling and is being asked to figure it out quickly. Most of these regulator types decline to come on podcasts, but since he's been in his new job, Matt's seen some stuff that he really feels the need to talk about.

[Jeff]

So here's an example of something I think is rather dastardly. One of the sports books in our state. If you place three straight wagers, whether it's on different teams or different aspects of a game with the same team, that app will automatically take your three Separate straight bets and turn it into a parlay bet. In a parlay, you have to get all three of those right to win. Now, you might have won two out of three and actually you won something. But when you roll it into a parlay automatically, sometimes they don't even know that happened.

[Michael Lewis]

The better doesn't even have to approve.

[Jeff]

No.

[Michael Lewis]

That's bizarre.

[Jeff]

I think it's s.

[Michael Lewis]

The apps all have a lot of these little nudges, not just to place bets, but to place certain kinds of bets. Parley bets tend to make more money for the sports betting companies because it's easier to trick people into taking bad odds on these bets. Parlay bets are long shot bets and the human mind is notoriously horrible at thinking about long shots. Offer most people 50 to 1 odds and they get so excited that they don't notice that they should really be getting 100 to 1. What else needs to be done that isn't being done? Like where else do you, when you look out, you say like, I can't believe that's allowed.

[Jeff]

All operators are required, at least here in Ohio, and I'm sure this is the case elsewhere, to use the very kind of sophisticated data they collect on their customers to identify those that are engaging in problematic gambling behavior. Chasing bets and losing and betting double and losing and trying to dig themselves out of this hole. That has a good purpose to it if you're going to limit a player. But what we're seeing is the expert gamblers are the ones that they're shutting the door to.

[Michael Lewis]

Let me put this another way. The new sports gambling companies are using their state mandates to limit problem gamblers as cover to limit expert gamblers while not doing much of anything about the problem gamblers. This of course drives Matt nuts in casinos. He could see the problem gamblers. He could give casino employees a checklist of signs to watch for in their anger, distress, drug abuse. He could fine the casinos if they ignored those signs. With these new sportsbooks, you can't see the gamblers. All you can see are the social problems.

[Jeff]

We know there is a big problem with a predatory approach to people who are inclined to lose and double down and lose that and go further and further and further without intervention. And how are we as a regulator to be able to distinguish types of behavior where banning someone for the right reasons because they have a gambling problem are able to be conducted versus those that are being banned because they're too good, leaving this population of vulnerable individuals in the middle who are just losing their money and that's what we are working on. It's going to be a long term project for us and other states.

[Michael Lewis]

A long term project. That's a polite way of saying no one's doing anything about it. And Matt knows this.

[Jeff]

I ordered Pizza Hut one night and when I got my receipt from Pizza Hut, it also gave me a promotion to get on a sports book and gave me some bonus bets. And of course, being the regulator of the Casino Control Commission, I thought to myself, how in the world do they know whether I am on a self exclusion list list, whether I am 18 or otherwise should not be getting these promotions? Well, the truth of the matter is they weren't screening, they just did it. And, and another sportsbook did it with Uber where you go and do your Uber transaction. The next thing you know you're getting a promotion. Tibet with some bonus bets attached to it. And so I had my minor son do it. He got the same thing.

[Michael Lewis]

Matt belongs to a kind of sports gambling support group. Its members are all sports gambling regulators in other states. These people get on the phone to talk about what they're seeing and how hard it is to do anything about it and how frustrating it is because what these businesses are doing with their customers is so obviously predatory. I mean, everyone knows that the group most at risk of contracting gambling problems are young men. That's why you attach bets to late night pizzas and inflate their egos.

[Jeff]

They call them VIPs. VIP doesn't mean that they're expert gamblers. What it means is they're really likely to keep gambling and losing their money. And so different sports books. You can see what they do in states where they're trying to get market share. They will expend a bunch of promotional bonus bets on their VIP population to encourage them to get into the game. Let me be the skunk at the picnic, okay? And say if you are a VIP with a sports book, you are their bread and butter. And if you're getting bonus bets and you boy. And if you have like a betting ambassador, that's your own personal contact at the sportsbook, you are definitely losing money. And you're going to keep losing money because why would you be a vip?

[Michael Lewis]

It's an excellent question. I'm going to jump in here and say what I've been saying the past few episodes. The sports books that control 2/3 of the market, DraftKings and FanDuel. They're still declining our request for an interview. But if anyone wants to respond to what Matt's saying here, that basically VIPs are profit centers with gambling problems. You know where to find me. Our lines are open. Oh, and our VIPs, they're ready to place more bets.

[Lydia Jean Cott]

Let's get to work.

[Ariella Markowitz]

That top is like an a girl top.

[Lydia Jean Cott]

Okay.

[Ariella Markowitz]

This skirt is so curtain. Yeah. Is obviously incredibly broad. That's very broad.

[Michael Lewis]

T Mobile for Business recently teamed up.

[Matt Schuler]

With Malcolm Gladwell for a new episode of Revisionist History to talk about how 5G is enabling the use of AI to deliver transformative and sometimes life saving innovation.

[Malcolm Gladwell]

Hello. Hello, Malcolm Gladwell here. Today I wanted to share a very special conversation I had recently hosted by my good friends AT T Mobile for Business about how AI is changing our world. Tell us about the problem you're trying to solve.

[Jeff Gordon]

When we think about emergency events and.

[Michael Lewis]

Really at the majority of the world, the primary tool set that firefighters use is a radio to communicate their status to the outside operation. Pretty reasonable to expect that people can become disoriented. So when I realized that technology was important was when I realized that many of the most vexing healthcare challenges that we saw in my own family, we realized that there was just significant lack of resources. You know, from a T Mobile for business perspective, like how can we take.

[Jeff Gordon]

This incredible best in the nation 5G.

[Michael Lewis]

Network and how can we harness some very specific capabilities?

[Matt Schuler]

Listen to this episode of Revisionist history on the iHeartRadio app, available now.

[HSBC Representative]

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[Malcolm Gladwell]

This year at Pushkin, we've been able to work with some of the world's biggest brands on creating bespoke content. Whether it's a custom episode in partnership with a brand or a creative ad campaign, we want to be sure that our content reaches people, but the ad space is incredibly noisy. How do we ensure our content reaches the right audience? That's where LinkedIn ads come in. With LinkedIn ads, you can precisely reach professionals who are more likely to find your ad relevant. As you will have direct access to a billion members, 130 million decision makers, and 10 million C level executives, you can target your audience by job title, industry, company and more, ensuring your ads reach the right people for your business. Start building the right relationships and and reach your audience in a respectful environment with LinkedIn ads. We'll even give you a $100 credit on your next LinkedIn ads campaign. Go to LinkedIn.com Malcolm to claim your credit. That's LinkedIn.com Malcolm Terms and Conditions apply.

[Ariella Markowitz]

Yeah, that top is like, literally like bracket.

[Michael Lewis]

Apparently it's Brat Summer, whatever that means. My producer LJ is at this moment trying on outfits with her fellow producer Ariella and their fashionista friend Jay, because they're about to join MGM at MSG to see csf.

[Ariella Markowitz]

To me, that's like a very rich girl outfit because, I don't know, you look like you have expensive taste, but you're a little bit clueless because I feel like it's not the most like Charlie I've seen.

[Michael Lewis]

I obviously wasn't there for any of this, but I was there the next day when LJ called. It was the day of the concert. She had Ariella with her and they were no longer sounding like the girls of Brat Summer. So I want to know what happened.

[Ariella Markowitz]

Oh, well, we're going to LJ's friend's house to get outfits for the show because she has this like, amazing Sex and the City esque wardrobe. And then once we're there, LJ starts feeling like something's really off. So we. We call her VIP Courtesan Courtney. And she doesn't pick up.

[Michael Lewis]

Even as LJ was picking out her wardrobe, she continued to lay down college football bets with Rufus Peabody. These were distinctly not the bets of a vip. I mean, they were big bets, many thousands of dollars. But they were also smart bets. The odds generally moved in her favor after she'd made them. For instance, LJ took BetMGM's early line of UCLA in 25 points against LSU. The closing line was 21.5. That bet looked smart, maybe too smart.

[Lydia Jean Cott]

I texted her and called. No answer. I was like, maybe I'm being paranoid. She just doesn't work over the weekends, which I think is the case. Then at 9:18, I got a text from her that said, hi, Lydia. I am very sorry, but unfortunately we are no longer able to offer you the tickets for tonight due to the fact that your account has factored down during the last week. If there are any changes in the future, I would love to welcome you back to our program, but I am unable to do anything at this point.

[Michael Lewis]

LJ will never know what happened. She'll text Courtney, she'll call Courtney. She'll do everything but figure out where Courtney lives to leave the head of a horse on her doorstep. Courtney will no longer want to be her friend, her VIP concierge, because LJ is no longer a vip.

[Lydia Jean Cott]

I felt like. Honestly, it felt like analyzing a breakup because I was like, look at how good we were. And then what happened?

[Ariella Markowitz]

Courtney, my AI girlfriend. Why did she giving me tickets?

[Lydia Jean Cott]

Why did you stop talking?

[Michael Lewis]

I didn't want to say what I was thinking just then, but LJ always knows anyway what I'm thinking before I say it.

[Lydia Jean Cott]

Before you say you should not have done those bets, Beckett says that that's been the situation with all of my bets, and he doesn't think that that made any difference. Like that they were gonna just do a sweep. I got caught up in a sweep, and then that's why I got kicked out.

[Michael Lewis]

That seems rash of them to have invited you in the first place. If they were gonna do a sweep, that would sweep you out.

[Lydia Jean Cott]

I'll say it is.

[Ariella Markowitz]

They broke their promise.

[Lydia Jean Cott]

And our hearts.

[Ariella Markowitz]

And our hearts.

[Michael Lewis]

And put you on an airplane across country for no reason.

[Lydia Jean Cott]

Luckily, I was able to cancel my blow drive.

[Michael Lewis]

I still wish she hadn't made those extra bets. She could have waited, gotten inside the VIP machine, seen some things, at least, met a few other VIPs. But none of that's going to happen now and probably never will. This world LJ was trying to enter is not just filled with problem gamblers. It's built for the problem gambler. This VIP machine, it's getting smarter every day. It's a bit like watching the slow march of an artificial intelligence. Today it sounds dumb. Tomorrow it will steal your wife and children and empty your bank accounts. Smart gamblers like Rufus, like lj, are a temporary nuisance, a momentary inconvenience. The machine will get better and better at identifying and getting rid of them. So that in the end, the VIP lounge is what it was always meant to be. A party of guys with a pizza promotion in one hand and a ride share bonus bet in the other. So we no longer belong. We're factored down nobodies outside the velvet ropes? Weak in status but still strong in desire?

[Lydia Jean Cott]

Imagine that we're at the concert.

[Michael Lewis]

You're at the concert. You've got, you've got bet, MGM on either side of you. VIP courtesans. And they're laughing, they're handing you drinks? They're loving everything you do? They think that you're just a dream.

[Lydia Jean Cott]

I'm wearing the outfits we picked out.

[Ariella Markowitz]

Oh, my God, I can see it in my head, too? A tear is coming to my eye.

[Lydia Jean Cott]

What would you be singing along to?

[Ariella Markowitz]

Okay, this song really sums up how I feel. Do you realize I could have been the one to change your life? You could have had a bad girl by your side? You could have had a bad girl? Could have had a bad girl? Bad girl? Do you even know the reasons why.

[Charles Fain Lehman]

You had to let me go? You could have have had a bad.

[Michael Lewis]

Girl by your side?

[Ariella Markowitz]

You could have had a bad girl?

[Michael Lewis]

Could have had a bad girl.

[Ariella Markowitz]

All right.

[Lydia Jean Cott]

Wow. I feel like a real vip.

[Michael Lewis]

Against the Rules is written and hosted by me, Michael Lewis and produced by Lydia Jean Cott, Catherine Girardeau, and Ariella Markowitz. Our editor is Julia Barton. Our engineer is Jake Gorski. Our music was composed by Mathias Bossy and John Evans of Stellwagen Symphonette. Our fact checker is Lauren Vespoli. Against the Rules is a production of Pushkin Industries. To find more Pushkin podcasts, listen on the iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts. And if you'd like to listen, ad free and learn about other exclusive offerings, don't forget to sign up for a Pushkin plus subscription at Pushkin FM plus or on our Apple show page.

[Lydia Jean Cott]

I feel like I'm more nervous than Ariella because I feel like it's actually really hard to pretend that you're someone you're not. But we'll see.

[Michael Lewis]

Everybody on the streets of New York are pretending to be someone they're not. You're the only one in New York City who's not pretending to be someone they're not. Lean into. We're just. I'm just having fun. It's like. And if you can give off the odor of, I have family money.

[Lydia Jean Cott]

Yeah, but how do you give off the odor if I have family money?

[Michael Lewis]

Giggle a lot.

[Ariella Markowitz]

Poor people hate laughter.

[Michael Lewis]

Don't do things like ask them to pack up the leftovers.

[Lydia Jean Cott]

Okay.

[Ariella Markowitz]

I mean, I shouldn't be putting pieces of bread into my purse.

[Lydia Jean Cott]

Don't steal the toilet paper from the bathroom. And try and bring it home.

[Michael Lewis]

Don't do that. Don't do the things that podcast producers normally do.

[Charles Fain Lehman]

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[Lydia Jean Cott]

This message is sponsored by subaru Celebrating the 17th annual Subaru Share the Love event going on now through January 2nd. For every new Subaru purchased or leased during the event, Subaru will donate a minimum of $300 to charities like the ASPCA, Make a Wish, Meals on Wheels or the National Park Foundation. To learn More, go to subaru.com/subaru More than a car company this holiday season, Surprise everyone on your list with the best gifts tickets to see their favorite artists live. Choose from thousands of concerts and comedy shows, including Mariah Carey, Mary J. Blige, Matt Matthews, Metallica, Thomas Rhett, Trans Siberian Orchestra, Sarah Silverman and so many more. Share a memory together or give a gift they'll never forget.

[Michael Lewis]

Find the most exciting gift for every.

[Lydia Jean Cott]

[e-mail] gifts that's livenation.com gifts.