Against the Rules with Michael Lewis – Episode 9: Framing the Gambler

Release Date: January 14, 2025
Host/Author: Michael Lewis
Produced by: Pushkin Industries

Overview

In Episode 9 of Against the Rules with Michael Lewis, titled "Framing the Gambler," Michael Lewis delves into the burgeoning landscape of legalized sports betting in the United States. He explores the parallels between the sports gambling industry and the financial markets, examines international case studies from Britain and Australia, and unpacks the strategic framing employed by gambling companies to maintain their dominance and evade regulatory scrutiny. Throughout the episode, Lewis highlights the ethical and societal implications of this evolving industry and raises critical questions about the future of trust and fairness in American life.

1. Insider Trading in Sports Gambling

Michael Lewis begins by drawing a comparison between insider trading in the stock market and the emerging issue of insider information in sports gambling.

Michael Lewis [02:32]: "The analogy, which seems obvious to some people, is The SEC ban on trading stocks when you have inside information. But even that is not an obvious type of crime."

Dan Davies, an economist and financial fraud expert, elaborates on the peculiar nature of insider trading laws:

Dan Davies [03:03]: "There really is no commandment that says thou shalt not trade securities while in possession of material non-public information."

Lewis points out the inconsistency in societal perceptions, noting how financial markets are uniquely vilified for insider trading compared to other industries.

2. The Regulatory Landscape: Lessons from Britain and Australia

The episode shifts focus to international perspectives, specifically examining the outcomes of legalized sports gambling in Britain and Australia.

Charlie Lewis, an Australian journalist, provides alarming statistics:

Charlie Lewis [08:34]: "Australians lose more per capita than any other country in the world on gambling."

Australia's struggle with regulating sports betting despite overwhelming public support for restrictions is highlighted:

Charlie Lewis [09:07]: "Polls still show that 70% of Australians want a total ban on sports gambling ads."

The episode underscores how the gambling industry in these countries has entrenched its influence by controlling media narratives and resisting legislative reforms.

3. The Gambling Industry's Influence and Framing Strategies

Lewis explores the strategic framing employed by the gambling industry to shift responsibility from themselves to the individual gambler. This approach mirrors tactics used by other predatory industries, such as tobacco.

Frank Farenkoff, former chairman of the RNC and gambling industry executive, discusses early strategies:

Frank Farenkoff [13:34]: "The gambling industry wouldn't do what the tobacco industry did and lie and tell people that its products never caused harm. Instead, it would shift the focus away from the industry and onto its customers."

Lewis critiques this narrative, emphasizing that it absolves the industry of accountability and perpetuates a blame-the-victim mentality.

4. The 'Blame the Gambler' Narrative

The episode delves deeper into the origin of the "blame the gambler" frame, tracing it back to American legal strategies.

Charlie Lewis [10:15]: "The gambling industry is only really doing what every big harmful industry does, which is fund research to try and get their message out there."

Lewis argues that by framing gambling addiction as an individual's flaw rather than a systemic issue, the industry effectively deflects responsibility and stifles meaningful regulation.

5. The Playbook of Doubt: Mimicking the Tobacco Industry

A significant portion of the discussion focuses on how the sports gambling industry adopts strategies akin to those used by the tobacco industry to create doubt and delay regulation.

Naomi Oreskes, a Harvard professor in the history of science, provides insights into these tactics:

Michael Lewis [29:37]: "Naomi soon found herself under systematic attack from a machine she didn't know existed. A machine built to deny climate change and paid for by the fossil fuel industry."

Lewis connects this to the gambling industry's efforts to undermine scientific consensus on the harms of gambling, thereby preventing regulatory actions.

Malcolm Gladwell [32:44]: "You don't need to prove that what you do is safe or good or right or moral. All you have to do is prove that we don't know."

This strategy of sowing uncertainty ensures that the industry remains unregulated despite mounting evidence of its detrimental effects.

6. Implications for America and Future Outlook

Lewis concludes by reflecting on the potential trajectory of legalized sports gambling in the United States, drawing lessons from international examples.

He warns that without proactive regulation and a shift in narrative, America could face severe societal repercussions akin to those seen in Australia and Britain, including increased gambling addiction and financial ruin among vulnerable populations.

Michael Lewis [37:43]: "Do not flinch. And I don't think they'll flinch. Too many interests are aligned."

Lewis underscores the urgency for American society to recognize and address the framing strategies of the gambling industry to prevent systemic harm.

Key Takeaways

• Insider Trading Parallel: The sports gambling industry's focus on policing insider trading mirrors financial market regulations but highlights inconsistencies in societal attitudes towards different industries.

• International Lessons: Britain's and Australia's experiences with legalized sports betting reveal significant challenges in enforcing effective regulations and the pervasive influence of gambling companies on media and politics.

• Strategic Framing: The gambling industry's narrative shifts responsibility for addiction from the industry to individuals, a tactic previously employed by the tobacco industry, effectively hindering regulatory efforts.

• Creation of Doubt: By funding research that questions the harms of gambling, the industry creates scientific uncertainty, delaying necessary interventions and maintaining profitability.

• Future Implications: Without intervention, the normalization of sports gambling in the U.S. could lead to widespread addiction and financial distress, emphasizing the need for informed regulatory policies.

Notable Quotes

• Michael Lewis [02:32]: "The analogy, which seems obvious to some people, is The SEC ban on trading stocks when you have inside information. But even that is not an obvious type of crime."

• Dan Davies [03:03]: "There really is no commandment that says thou shalt not trade securities while in possession of material non-public information."

• Charlie Lewis [08:34]: "Australians lose more per capita than any other country in the world on gambling."

• Frank Farenkoff [13:34]: "The gambling industry wouldn't do what the tobacco industry did and lie and tell people that its products never caused harm. Instead, it would shift the focus away from the industry and onto its customers."

• Naomi Oreskes [29:37]: "Naomi soon found herself under systematic attack from a machine she didn't know existed."

• Malcolm Gladwell [32:44]: "You don't need to prove that what you do is safe or good or right or moral. All you have to do is prove that we don't know."

Conclusion

In "Framing the Gambler," Michael Lewis provides a compelling examination of the sports gambling industry's rise in America, its strategic maneuvers to evade regulation, and the profound societal impacts that may ensue. By drawing parallels to well-documented strategies of other predatory industries, Lewis emphasizes the critical need for awareness and proactive measures to safeguard public trust and ensure fair practices within this rapidly expanding sector.

Listeners interested in deeper dives into the intersection of addiction, regulation, and industry influence may look forward to future episodes featuring interviews with experts like anthropologist Natasha Scholl and historian David Courtright.