Pushkin. So, as I explained last episode, we've created this experiment. My producer Lydia Jean Kott has partnered up with one of the world's smartest sports gamblers, Rufus Peabody is his name. Over the past fifteen 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 just opened as many a counts with sports gambling companies as she could and get as much money down as they 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 fan Duel 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 two hundred and seventy four 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. Well, what's going on?
Okay? So I mean I placed a bunch of bets this weekend?
How many bets?
So many bets?
Actually, how many bets?
Okay, total, I've total.
I've placed one hundred and ten thousand dollars since we started, which is pretty good.
It's my salary.
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 warn her business more than ever.
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.
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.
I've basically locked my debit card, which I didn't know is a thing. So then when I tried to buy a coffee, it got declined, which has never happened to me.
How did you pay for your coffee?
The barista covered me.
Really yeah, he was like, I'm sorry, this seems like a bad situation for you.
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's only made like forty nine thousand dollars worth of bets at bet MGM 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 to tickets worth thousands of dollars. I actually have no idea who Charlie 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.
It'll be just like going to any hosted VIP and then at Medicine's Gay God.
Okay, like I've never done that.
That's the altar voice if 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.
You know.
Lvy 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 that MGM for all of their corporate hospitality stuff, whether it be a sports event for a music event. There will be a few other people in the VIP provent there, and there will be a few other people that work for that MGM, and there will be free food and free booze and a great view of the band.
Beckett gives LJ a goal fake being a degenerate gambler so well that they raise her betting limits from like five to fifty thousand dollars a pop, but La is still fixated on how to act like a VIP.
I don't know, Like I guess, should I pretend to be someone other than myself? No? I feel like I could just be myself a podcast producer in New York who is just a little wealthier than I actually am in real life, and enjoys batting a little more than I do in real life.
And we love golf.
We love golf.
That's Ariela Markowitz, another producer on our show, who's flying in from California to be lj's plus one at Charlie XCX, and who is so into it.
How sophisticated should our golf vocabulary be? I feel like I should start reading more.
I mean, you know, if you try and become convustant in it, I think that just leads to all risks, 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 wanted.
Okay, well peppered in if we need to.
And we got some light peppering.
Do you have any backstories for us? It's toll like, how we're wealthy.
I would, I would keep it vague, but I would, you know, family wealth or you know, in saving fears, something like that. Maybe you'd been investing for a while and you got bought it, so you pulled your money out of the stock bucket and decided to gammel with it instead.
Yeah, that seems like gonna be a really hard thing for me to pull off.
Thing casually for me, I'm.
Like a dead relative. They gave me money, I'm stupid, got a honor. May their memory be a blessing?
Like is that what you do?
You go and say stuff like that, like have you done that?
Yeah? I mean I've I've set all kinds of things to all kinds of people. I don't want to give away too much.
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.
I'm gonna I might try just the no Lie route.
Bee.
Yeah, I totally improve. I think that's the way it did. Beckett approved slowly if that could approved?
Beckett approved, and I did too. I'm Michael Lewis, 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 sports books, Fan Duels 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 kicked them out too. As it turns out, not so much.
My name is Jeff. I'm from New Jersey.
What else? 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 twenty sixteen, he saw a billboard ad for a Draft Kings fantasy basketball tournament. He was twenty four years old. He paid thirty bucks to enter the tournament, and to his delight, he finished
second overall out of fifty thousand players. This further convinced him that he could predict whatever would happen on a basketball court better than other fans.
It was one hundred thousand dollars, which to me, it was a lot of money for a thirty dollars bet.
It is a lot of money for a thirty dollars to everybody, it's a lot of money for a thirty dollars bet. I mean, that's incredible.
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 with it, I want to say a couple months, not.
Even gambled away in fantasy leagues.
In fantasy leagues and the daily fantasy tournaments in sports betting.
When was the first time you thought I have a problem.
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 is bad.
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 twenty nineteen, everyone in New Jersey now had a casino in their pockets, and Jeff had zero ability to ignore it.
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 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.
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.
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.
What did it feel like when you were doing it?
During the time, all I cared about was getting that next bet in. But once that that was in there, once I lost, I felt like such a slimy, nasty case of garbage because I soooped to such a low level to get a bet in.
You didn't need an algorithm to see that Jeff had a problem. But an algorithm could easily have spotted it.
It's all about the action for the convulsion. For me, I'll speak for myself, it's not about the money.
Does everybody kind of agree? It's not about the money.
Absolutely. One of my favorite sayings is, we could fill this room up with one hundred dollars bills and it still wouldn't be good enough for us.
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. It made me what I feel.
It was a monster, and it's hard to it's very hard for me to to 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 effect. 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.
The sports gambling companies have this phrase responsible gaming. The idea is to everyone else off of 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 dot gov bard slash ny responsible gaming 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 a 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 company's 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.
H 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 cool 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 have if you truly want to, if you want to, if you want to gamble, you're going to find a way to sports bet.
It actually didn't occur to Jeff that the new sports gambling industrial complex for 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 might never have encountered. He just blamed himself. Who wasn't until his wife persuaded him to join Gambler's anonymous that he saw just how toxic the environment was.
I see people come in, young, young kids, and they're they're they're getting emails spammed to them from from FanDuel and DraftKings. They're they're just getting bombarded. It's it's so enticing, it's so enticing, and that's just the world that we live in.
You have to adapt and defend yourself 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 didn't I don't wake up.
Just this 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.
What's really interesting about gambling in general and sports gambling is a subset of gambling. Gambling in general is the way in which is sort of the most efficient kind of addiction.
Charles fan Lehman of the Manhattan Institute, which calls itself a right of center think tank. So I guess Charles is just done a right of center dive into a bunch of new academic research about sports gambling.
I think about slot machines which are just like designed to slowly gently take you down to zero. It's like you're can have a complicated relationship with marijuana, you get a complicated relationship with heroin, as it turns out. But like 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.
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 have it. Walk me through some of the research that has sort of affected the way you think about it.
The sort of 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 twenty five to thirty percent, which is a big jump from a low baseline.
One 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 jefs.
One of the sort of shocking numbers is for every dollars spent on sports gambling, two dollars of investment are 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 there's people who are sort of already primed to not make the most responsible decisions, have gas poort on the fire.
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.
When the home team has an upset loss an fell game, there is a statistically significant increase in rates of into a partner of violence domestic violence. The increases even larger
in states that have sports gambling. And the point is like, not only is sports gambling sort of 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 are They are surrounded with their loved ones, their partners, etc.
It's amplifying fan emotion.
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 writing on it, maybe it's not great that you were able to place a big bet from your phone in the first place.
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 happened instead is that more people are developing gambling problems because more people are gambling. I mean, that's why in states that legalized sports gambling, the savings rate falls
and the bankruptcy rate rises. So you've got to kind of ask why is this social experiment going so wrong?
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.
Meet Matt Schuler, Ohio's sports gambling regulator. Ohio only legalized sports betting last year, but it already allows seventeen 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 declined to come on podcasts, But since he's been in his new job, that's seen some stuff that he really feels the need to talk about.
So here's an example of something I think is rather dastard 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.
The better doesn't even have to approve.
No, that's bizarre. I think it's sinister.
The apps all have a lot of these little nudges, not just to place bets, but to place certain kinds of bets. Parle 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. Parley bets are long shot bets, and the human mind is notoriously horrible at thinking about long shots. Offer most people fifty to one odds, and they get so excited that they don't notice that they should really be getting one hundred to one.
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.
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 handling 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.
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 customers, anger, distress, drug abuse. He could find the casinos if they ignored those signs. With
these new sports books, you can't see the gamblers. All you can see are the social problems.
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 regular 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 in other states.
A long term project. That's a polite way of saying, no one's doing anything about it. And Matt knows this.
I ordered Pizza Hut one night, and when I got my receipt from Pizza Hut, it also gave me a promotion to get on sports book, and he 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, whether I am eighteen or otherwise should not be getting these promotions. Well, the truth of the
matter is they weren't screening. They just did it. And another sports book did it with Uber where you go and do your Uber transaction. The next thing you know, you're getting a promotion to bet with some bonus bets attached to it. And so I had my minor son do it. He got the same thing.
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 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.
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 bedding ambassador that's your own personal contact at the sports book, you are definitely losing money and you're going to keep losing money because why would you be a VIP.
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 two thirds of the market, DraftKings and Fan Duel, they're still declining our requests for an interview. But if anyone wants to respond to what Matt's saying here that basically VIPs or 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 bags.
That talk is like an a girl talk.
Okay, this girl is so permanent.
Yeah, this is obviously incredibly broad.
That's very bright.
Yeah, that top is like literally like Brie Covin.
Apparently it's Brat's 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.
That's like a very virtual outfit because I don't know, it's like he was expensive taste, but you're a little bit clueless because I feel like it's not the.
Most like Charlie I.
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.
Oh, well, we're going to lj's friend's house to get out fits 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 call her VIP Courtisan Courtney. She doesn't pick up.
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 twenty five points against LSU. The closing line was twenty one and a half. That bet looked smart, maybe too smart.
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 nine eighteen, 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.
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.
I felt like, like, honestly, I felt like analyzing a breakup because I was like, look at how good we were, and then what happened Fortney.
My AI girlfriend? Why did she give me tickets? Why did you stop talking to me?
I didn't want to say what I was thinking just then, but LJ always knows anyway when I'm thinking before I say it, before.
You say, you should not have done those bets.
Beckett says that that's been a situation with all of my bets, and he doesn't think that that made any difference, like that they were going to just do a sweep.
I got caught up in a sweep, and then that's why I got kicked out.
That seems rash of them to have invited you in the first place. If they were going to do a sweep that would sweep.
You out, I'll say it is they've broke their promise and our hearts and our hearts and.
Put you on an airplane across country for no reason.
Luckily I was able to cancel my blow drive.
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 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 are factored down. Nobody's outside the velvet ropes, weak in status but still strong in desire.
Imagine that we're at the concert.
You know at the concert got you got bet MGM on either side of your VIP courtesans and they're they're they're laughing, they're handing you drinks, they're loving everything you do. They think that you're just taking.
Oh my god, I can see it in my head to a tears coming.
To my eye?
What would you be thinking a lot too? Okay? This song really sums up how I feel.
Do you realizes I could have been a wanted change your life? You could have had a back girl by your side. You could have had a bad girl, could have had a bad girl, bad girl. Do you even know no reasons why you have to let me go?
You could have had a by your side, You could have had a m all right, Wow, I feel like a real VIP.
Against the Rules is written and hosted by me Michael Lewis and produced by Lydia Gene Coott, Catherine Gerardeau and Ariela Markowitz. Our editors Julia Barton, Our engineer is Jake Krski. Our music was composed by Matthias Bossi and John Evans of stell Wagon Cinfinet. 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 to ad free and learn about other exclusive offerings, don't forget to sign up for a Pushkin Plus subscription at pushkin dot fm, slash Plus, or on our Apple show page.
I feel like I'm more nervous Scenariola because I feel like it's actually really.
Hard to pretend that you're someone you're not.
We'll see everybody on the streets of New York are pretending to be someone. There not You're the only one in New York City's not pretending to be someone and they're not lean into We're just I'm just having fun. It's like and and if you can give off the odor of I have family money?
Yeah, but how do you give off the odor if I have family money?
Giggle a lot.
Four people.
I hate laughter.
Don't do things like ask them to pack up the leftovers.
Okay, I mean I shouldn't be putting pieces of bread into my purse.
Don't steal the toilet paper from the bathroom and try and bring it home.
Don't do that, don't do the things that podcast producers normally do.