Pushkin, I want to do one hundred bucks on yes for the A's Yankees score.
In the first inning, and I want to do one hundred bucks on a parlay. That's obviously me many months ago at a newish casino in Vegas called Circa, placing my very first two sports bets. I bet that yes, someone would score in the first inning of the A's Yankees game, and I placed a parlay bet on the seventy six ers the A's and the Denver Nuggets. Thank you very much. I'd only just started to figure out
sports gambling. I downloaded Fan Duel and DraftKings on my phone at home in California, but they wouldn't accept my bets. That's how I discovered that sports betting was illegal in California, which in and itself was weird. For years, I'd been bombarded with ads on my home television trying to get me to make some sports bet with fan Duel and DraftKings, but the moment I tried to do anything, they told
me it was against the law. Anyway, I just flown to Vegas because if you want to gamble, where else are you gonna go? I'm a calm better I'm not gonna cheer. I got ice wear in my veins, and I just care about my process right, and my process is good. It's pulling my bets out of my ass.
That's my process.
As always. I'm with LJ, my producer, who at that moment was still as innocent about the world of gambling as I was. It'll be months before she transforms herself into a mule for professional sports gamblers and quickly gets her bets rejected from all sorts of sports books. We're just standing in this sunken theater staring at twenty different sports being played on enormous screens. Outside. Circa had built huge swimming pools beneath another gigantic screen. Out there. You
can float and drink and watch your money vanish. If you were sitting there with us inside the Circus Sports book and you knew nothing about sports gambling, you might think that you were right smack in the middle of the sports gambling industry. And obviously I knew nothing but my bet that someone would score in the first inning of the age Yankees game. So we're one swing away from going to collect it was still looking pretty good. Oh oh, don't do this, Oh my god.
It happened. Oh no, I lost.
How did this happen?
How did this happen?
How did this happen?
You jaxed me.
You came here and you jaxed me. I was supposed to win and you came your presence, isn't it.
It's like.
On the other hand, on the other hand, there's several lining here. John's point out, my parlay is looking better in Vegas. Hope dies hard. Three different games in two different sports needed to break my way for my parlay to win, in which case my one hundred dollars would turn into over twelve hundred.
Yeah, we're in to parlay. That would be a big deal.
I'm Michael Lewis, and this is against the rules, and you're gonna have to forgive me my ignorance for a minute, because I was just getting started. I didn't know that a parlay was the dumbest sports bet you could make, nor did I know that if you want to see the future of sports gambling in America, the last place to be was a Vegas casino. That Vegas was a sort of PG thirteen, and all the adult stuff was
in other states. And I had no idea why California of all places, was banning an activity that was now legal in most other states. But I was about to find out. Way back in two thousand and eight, during the Global financial crisis, I remember thinking how weird it was that it played out so differently from country to country. In the years leading up to the event, every developed country was subjected to the same temptation. Everyone was basically left alone in a room with a giant pile of money.
But what people wanted to do with that money differed from country to country. The Irish wanted to create an insane commercial real estate boom. Iceland's three hundred thousand citizens wanted to have three of the world's biggest banks. The Greeks turned their state into a pinata for its citizens to whack at. It was like you could go from place to place and see how these cultures differed by
their financial kinks. One country's yuck was another's yum. You can see the same sort of thing right now in the United States with sports gambling. Since twenty eighteen, when the Supreme Court ruled that states could legalize sports gambling, every state has struggled with this new temptation. Actually, most haven't struggled very much, But as I'm recording this, eleven
states are still holding out against legalization. My own state, California, but also Texas, Idaho, Utah, Minnesota, Alabama, Georgia, Oklahoma, Alaska, South Carolina, and Hawaii. These sports gambling holdouts are each kind of cool in their own way. No two are exactly alike, but many share a similar reservation, a moral reservation.
Our focus was on addictive behaviors of moral issues in general, but particularly addictive behavior's alcohol, tobacco, gambling, marijuana, those kinds of things.
That's Reverend Joe Godfrey, a lobbyist for Alabama's many Southern Baptist churches and a leading opponent of sports gambling in southern state. What does the Bible have to say about gambling specifically?
First of all, gambling is a part of the get rich or get something for nothing mentality, a get rich quick syndrome that characterizes our culture today. But one of the Ten Commandments says in Exodus twenty verses three and three and five, but in verse three particularly you shall not you shall have no other gods before me.
When you're looking for something to tell you what you can't do, there's, of course no book is useful as the Bible, but even I was a little surprised by how many ways the Bible tells you not to gamble, and so I've had to leave out most of the reverend speech on the subject. But he ended with this the fourth principle.
Gambling is a form of covetousness and greed. But the Bible says in Exodus twenty, verse seventeen, you shall not covet your neighbor's house. You shall not covet your neighbor's wife, or his male servant, or his female servant, or his ox, or his donkey, or anything that is your neighbors. That's almost half of the ten commandments that address the issues related to gambling.
I sort of think that you should just feel what you feel for your neighbors donkey. But enough people in Alabama believe what Reverend Joe Godfrey believes. That he won his first skirmish with fan Duel and DraftKings, the lobbyist for DraftKings got so irritated that he named his fantasy sports team doctor Joe Gottfrey. The Southern Baptist fought and won battles not just in Alabama, but also in Georgia and South Carolina. In Utah, the Mormon Church has prevented
sports gambling on religious grounds. But to me, the Mormons feel different. The Mormon Church just runs the show in Utah and no one really argues much about whether they should drink Coca cola or have thirty nine children, and somehow that all works for them. The Mormons, of course, would love to convert you, when when that fails, they sort of leave you alone and maybe even speed you
along your journey to hell. For decades, Mormons basically ran the money into Vegas casinos, and that was fine as long as they did in themselves gamble. Southern Baptists aren't like that. They're surrounded by people who don't share their views, and they want to stop everyone from gambling. That's a way bigger lift. Do you have any sense of where this is headed if you had to bet where Alabama law is going to be ten or fifteen years in the future.
First of all, the gambling forces never stop. They come back every year. And what happens is a lot of Christians and churches begin to get weary of the battle. And that's another thing I have to remind that the Bible tells us do not grow weary in doing what is good and doing what is right. But the fact is that churches get tired of the fight. Gambling crowd never gets tired.
The sound you hear in that voice, that's resignation. He knows he's going to lose. The Wall Street analysts I talk to who follow the industry think Alabama will legalize sports gambling in the next year or two. Anyway, the Southern Baptists aren't the main story here because the main story is no longer really about morality. It's about money. More than one hundred million Americans are still being denied
legal access to the new sports gambling apps. The vast majority live in states without any obvious moral reservations to gambling. What they have instead are actual reservations blasting ads like this.
Discover your perfect combination at Batana Resort Casino where you can rock and roll.
There's a very long story about how casino gambling came to Indian reservations. It's too good to totally ignore, but let me just give you the short version of it.
If you had all these different little Bengal halls, so tribes were sort of able to offer that without any outside regulation, or if it was illegal in the state, tribes could still offer it.
That's Steve Ruddick, who writes a newsletter on the sports gambling industry, and he says no one paid the tribes much attention at first, but in the early nineteen eighties, the reservation's bingo games became bingo machines, and the bingo machines were basically slot machines. O kis, do you have any idea what tribe first put the slot machine in the bingo hall.
I'm going to draw a blank onto the tribe. But it was in Minnesota, and it was like bingo machines in someone's garage on the reservation. This stided to get legal challenges.
Actually more than legal challenges and more than just Minnesota. In Florida, a local sheriff threatened the Seminole tribe with force unless they shut down the bingo games. There was also some fighting in California and Michigan. Lawsuits filled the air. One reached the Supreme Court in nineteen eighty seven. The Supreme Court ruled that states couldn't prevent the Native Americans from doing anything on their own reservations that was legal.
Off the reservations. A pattern soon emerged. The federal government, responsible for giving financial support to tribes, tended to smile upon activities that might reduce the need for that support. State and local governments tended to frown on activities such as gambling, that might transfer money from their coffers to the tribes. In nineteen eighty eight, Congress finally passed a law Indian tribes could offer bingo without asking for permission.
If they wanted to open a casino, they needed to cut a deal with the state, and so tribes began to cut deals with the states. One odd fact, there was only the loosest correlation between where Native Americans received a license to open a casino and where Native Americans actually lived. Connecticut has huge tribal casinos, but not very many Native Americans. Alaska has a lot of Native Americans, but hardly any casinos.
Well, it turns out that a lot of tribes are pretty sharp, and ninety two you got Foxwoods, So all these tribes suddenly were like, hey, you know what, people are going to travel these casinos. Then you started getting commercial casinos also coming into the fold.
Some have both.
And how big has this been for the tribes huge.
One of my favorite stories to tell about this is the sand Manuel Tribe.
The sand Menuel Tribe resides just outside of Los Angeles.
They're basically one of the biggest tribal casinos in the country, like billions of dollars of revenue. Before that, doctors used to ride in on horseback to the reservation to give kids their vaccines for free. So now this tribe is now making billions of dollars over the years they donated to that hospital that was doing That's that's the difference of it.
Sense is that they were granted this right because the people who granted them this right didn't think it was that valuable.
Yeah, exactly when it happened, it wasn't expected to be what it is.
The same thing that happened in California also happened in the least likely places. In Oklahoma. The Chickasaw Nation opened a casino on the Texas border that soon became the biggest in the world and effectively controlled the Texas market. In Florida, the Seminole seized control of gambling in the entire state, but then came the Supreme Court ruling of twenty eighteen that allowed states to legalize sports gambling, and the lobbyists for fandueling DraftKings were suddenly everywhere.
These companies, backed by Wall Street, basically swooped into California. I think, kind of confident that they could do what they did in every other state.
That's Gus Garcia Roberts of the Washington Post, who covered the first battle in this new war war. That was back in twenty twenty two when fan Duel and DraftKings and some other sports gambling companies sponsored a California ballot proposition to legalize mobile sports betting.
I love the name of the proposition that these companies ultimately pushed forward, which is I haven't written down here. It's Californians for Solutions to Homelessness and Mental Health support a coalition of housing and mental health experts, concern tax payers, and digital sports, entertainment and gaming companies.
For Permanent Solutions to homelessness, mental health, and addiction in California. Prop twenty seven supports financially disadvantaged tribes that don't own big casinos.
What were we actually voting on when we were voting on this proposition?
So what you were actually voting on was the legalization of mobile sports betting in the state. There would have been minimal kind of involvement of California tribes. These companies had it was kind of an ingenious strategy in order
to I guess divide the tribes. Their proposition would have benefited some of the smaller tribes that are not near cities and so did not have very lucrative gaming operations, and and so it would have made California like any of the other states where you can just kind of gabble on sports on your phone. Everybody I spoke to they were just moved by commercials that they thought were for a proposition that was going to finally do something about homelessness or you know, mental health.
Twenty seven means getting people off the streets and into housing.
Yes on twenty seven.
There was one guy who I spoke to who was a truck driver and he was passing through California and he was just saddened by the homelessness situation. And then he was in his motel room and he saw the ad and he decided to contribute what he could.
To me.
That really encapsulated the confusion around these ballot measures.
Not just confusion duplicity. It's sort of like FanDuel draving. They're foul hooking donors by persuading them that they're doing something other than what they're doing.
Right, And it's not like those companies were reliant on one hundred dollars from the truck driver. But it really showed how they were trying to, you know, essentially, if not mislead, at least hoodwing Californians into not really knowing the true purpose of these propositions.
But Proposition twenty seven did not go unopposed. From the moment the lobbyists from FanDuel and DraftKings massed along the California border, they'd been spotted by Indian Scouts because the tribes knew from bitter experience that the white man had a gift for what the white man called Indian giving.
We want this thing in perpetuity.
You know what I mean.
That's Victor Rocha, conference chairman of the Indian Gaming Association.
Hey, listen, if the Indians from one hundred years ago would have had the lawyers we had, you know what I mean, it'd be a whole different story in America. We would be instead of bows and arrows, we'd be checking attorneys. Excuse me, mister Custer. You know, mister Shinebaum, my attorney.
Quivers loaded with shinebombs. The California Tribes watched and waited.
We saw those pricks right on the horizon. We saw them coming.
You did see them coming.
We saw coming Tom all Away. It was very obvious. Because we're Native Americans, we suspect everyone and everyone. If it isn't Steve Wynn and the pricks at MGM, then it's then it's these new version of an old version of the guy. We kind of believe these guys are the same mindset.
It must be odd, you know, to know that your role always is to wait for the peace treaty to be somehow violated. In this case, the California tribe saw a very specific threat. By law, their casino were confined to their reservations. If Californians were allowed to bet on their phones, no one would bother to drive to the reservations.
Sports gambling was just a trojan horse. Eventually, they could imagine every Californian would have an entire casino in their pockets, a casino run out by tribes, but by FanDuel and DraftKings.
These guys are like, we're not going to wait for you guys to get out of same foot. They saw it as an opportunity to screw us, and that's what happened.
That's what had already happened in other states, even states with big tribal casinos. Arizona, for example, FanDuel and DraftKings talk to the Arizona legislature into handing out twenty sports gambling licenses, ten to tribes, ten to companies like FanDuel and DraftKings, and also sports teams themselves. They made it sound like a fair competition, but in no time at all, FanDuel and DraftKings routed the field.
Listen, I hold DraftKings to their face. I go listen, if you come into California, we are gonna curb stomp you. And they got pissed off, you know, they because they go, no, no, we're your friends.
So you didn't you didn't trust them?
Oh fuck no, man, do you trust them?
You know?
These are the same guys that scooters for water, the scooters for land, different package, same schools. You know, it's this NBA mentality, you know what I mean. They're smarter than you. They know the future of the world. They're gonna plant it. We're just riding along. So all of a sudden they come into California and so we tell them, don't do it.
Did any part of you think they're gonna be too powerful and they're gonna overwhelm us?
No, No, not at all. Never had a doubt one second. You need a great villain in a story, and they were great villains in this narrative. They make great villains.
That feels to me just very true. Fand and DraftKings make great villains. Why they make great villains is another matter, stick a pin in that question. We'll come back to it in a little while. Anyway, the California Tribes fought Prop twenty seven with their own ballot initiative. There's proposed limiting sports gambling to reservations. The two sides then vaporized
half a billion dollars, trashing each other's propositions. After the dust settled, both propositions failed and nothing changed, which was a huge win for the Indian Gaming Association.
That's why Fandel and DraftKings are so freaked out right now that that when we won, the day after, the tribes go fuck you, you're not coming into our market. The name fandel and DraftKings will not exist in this market.
If you go out kind of imagine out twenty years. Can you imagine mobile sports betting in California but run by the tribes?
Yes?
Absolutely, and that's what they're doing in Florida. What the tribes in Florida did that freaked everybody out is the seven said, you know what, We're gonna have mobile sports betting. We're gonna have all this everything you want, but everything goes through us.
It sounds good, but I'm not so sure things are gonna go Victor's way. There's something weird about this industry and something unstoppable about these two companies, FanDuel and DraftKings. There've been some skirmishes, the Indians have won a few of them, but the war that's not even close to over. In the run up to the global financial crisis, back in like two thousand and six and two thousand and seven, there was a character who was the first to see
that something was off. The short seller, the character who makes us living by finding companies or whole countries to bet against. People love to hate short sellers. They seem so negative, so hostile to other people's hopes and dreams. But short sellers are also incredibly useful, more than useful necessary because you learn a lot when you think about the other side of the bet.
I think we got an average price of about forty and I think we averaged exit was about fifteen. So you never get the highs of the lowest, but it was a successful position.
That's Jim Chaino's maybe the world's most famous short seller. Actually, if you google world's most famous short seller, a picture of Jim Cheno's pops up. In his spare time, he teaches a course at Yale on financial fraud, which well, of course he does, and he has a track record of successfully betting against gambling companies. He did it first back in two thousand and five after a bunch of online poker sides sold stock to the public, and he read their prospectuses.
And in the board of directors section there was a list of five or six people who were on the board of this particulicular online poker company, and at the very end of one of the listings it said, mister so and so is currently a fugitive from justice.
Jim Chenos just loves it when the board of directors are fugitives from justice. I mean I kind of thumbed it all up.
These entities were all offshore, a lot of them were being used to launder money, which is what things the US authorities were worried about at the time, and ultimately they all got shut.
Down hard in the US. All right, so you shorted those and it worked.
Yeah, those worked.
The poker companies all went bankrupt. Then in twenty twenty one, Jim notices these new sports gambling companies, Draft Kings and fan Duel. He reads their prospectuses, he sees that they're run by some of the same people who ran the poker companies. DraftKings goes public and it's stock soares, but it's still losing money hand over fist, and it feels like those on line poker sites. Jim does a back of the envelope calculation in mid twenty twenty one, he
shorts DraftKings stock, and sure enough, it soon collapses. He buys back the stock and takes a big profit. But then, incredibly, Draft Kings bounces back and keeps on rising. And that's when Jim Chainos realizes he screwed up.
We made a fundamental error in that we modeled out the business based on it being the same economics as a typical Vegas you know, sports book at a casino well basically and historically has earned five to six percent on the amount wagered. And that's been a That five to six percent number has been kind of static for years and years and years.
But DraftKings wasn't a casino. It was something else, something new, something very weird.
What really has changed is because of the ease of gambling by having this device in your pocket that allows you to place a bet, is that people are basically making dumber and dumber bets. Right, They're making more and more parlay bets. They're making more crazy odds bets. You know, will Taylor Swift be wearing a Chiefs jersey at the game?
You know, a casino has all these games, and the odds are of course always against you. But casinos don't coax you into playing, say roulette, with one set of odds, and then once you're hooked, switch out the odds to make them far worse. But that's exactly what these sportsbooks are doing by coaxing people into parlay bets. Here's an example of how this works in practice. On a simple bet on, say the Kansas City Chiefs to beat the
San Francisco forty nine ers. DraftKings average profit and casinos they call it the wind margin is roughly five percent on a two leg parlay bet. A bets say that the Chiefs win and Patrick Mahomes throws for more than three hundred yards. On that kind of parlay bet, average profit to DraftKings rises to ten percent on three legged parlays, where for the better to win, the Chiefs need to win, Patrick Mahomes needs to pass for three hundred yards and
Travis Kelcey needs to score at least one touchdown. DraftKings rakes in fifteen percent or more. There's this useful rule of thumb. With each additional leg of a parlay, the book is keep an extra five percent. And DraftKings and Fan Duel have learned how to herd their customers into longer and stupider parlays. Their TV promotions are designed with this one goal in mind.
This is you and this is your first hunch of the season.
It's parlay time. Promotions like that are working. They're leading the American gambler to make different kinds of bets.
Those are really bad bets. Professional betters still make those bets, yep, but the public does and and that changes the economics dramatically.
Because because they're on the other side of the bad bets.
Well, and it's the same the same overhead costs, right, But if you're breaking off higher amounts of the bet, it's all gravy. The extra gross profit is all gravy. The bad news is, of course, is if you're the better, if the house is taking ten percent of each bet, your your bank role begins to dissipate dramatically faster, and so they're going to need to find more and more, you know, suckers if you will to keep making these bets.
So far they have. So that tells you something. It does tell you something, and it tells you that it's a different business from the old sports book at a casino.
Yes, absolutely a different business.
That change in behavior is everything. Fan Dow and DraftKings have all these competitors, Caesar's and MGM and Circa and the other Las Vegas casinos have all launched sports gambling apps, but Vegas for some reason can't compete. Neither can ESPN or the Fanatic Sports Apparel Company or well there's no end to the failed competition. After Colorado legalized sports betting back in twenty nineteen, twenty companies launched sports gambling apps.
Less than two years later, seven of those twenty apps are gone. In the end, there's really been no serious competition. All these other companies have been losing huge sums of money and making zero dent in DraftKings and fan duels market shares. FanDuel and DraftKings have remained something like eighty percent of the entire market.
Most of the questions I had were is this going to be an Internet marketplace?
Which is winner takes Most. That's Sean Kelly, an analyst at Bank of America. He was covering the casino industry when along came these sports gambling companies and he felt a professional obligation to follow them too, thinking that they were just like casinos and so like Jim Chaino's, like basically every Wall Street person, he at first missed what was really going on.
The Internet has actually led to a handful of winner take most marketplaces, ride share, so uber lyft. If you think about the consumer marketplace and home sharing, so Airbnb and all.
Those businesses, I can see what the network effects are.
So The reason it was the debate in this business was unlike those other places, those were two sided marketplaces. If you controlled supply, and you had the most supply, you'd get the most customers, you'd have the demand.
In mobile sports gambling, there were no obvious network effects. FanDuel and DraftKings weren't like say, Facebook, which everyone is on only because everyone else is on it. They weren't even like Uber, which people use because it has so many drivers, and which has so many drivers because so many people use it. But these two companies were dominating their market. It's the same way as Facebook and Uber had.
It was like they had this moat around them that prevented anyone from invading their castles.
At the time, we couldn't identify what the moat was, But here's what the moat was.
The answer is three billion dollars. That's what it costs in marketing just to get people to know about you.
Actually it's two billion in marketing and one billion in technology.
Three billion dollars to create a brand. But their brand names are just the start of the edge that these two companies have. Their deeper edge is what they know about the American sports gambler. Technology has allowed them to create something very different from casinos or old fashioned sports bookies. But what makes these two companies unbeatable is the data they've acquired, and it's basically impossible for anyone else to acquire.
Why do these companies win? The answer is the perfect seam for the American sports better was not you know, commercial casino gambling. It was daily fantasy sports. You had customers who cared so deeply about sports that not only were they willing to gamble on real sports, they would gamble on fantasy sports.
Right.
So if you just take that at as simple as level, these are people that had money on deposit on the Internet to gamble on fantasy sports. They sure as heck couldn't wait for the real money alternative to come, and when and when it did, it was a perfect pivot to the exact customer set that wanted to do this.
Who still left who you think is a plausible competitor to fandueler DraftKings.
So the truth is, yeah, the game has largely been one.
I think we can safely say that it's totally been one. The sports gambling industrial complex will be dominated by two companies. Anyone who challenges them will have to spend three billion dollars to get to where they are now if they're lucky. But by then Fandulin DraftKings will have acquired more data on the American sports gambler and found craftier ways to both find and manipulate him. The capital markets will see that any attempt to challenge their dominance is a waste
of money. Anyone willing to invest three billion in a sports gambling app would be nuts to invest in any place with fanduela DraftKings.
What they did was they created a business model that is a loss leader for X number of years to gain market share and dominance.
That's Jim Allen, CEO of Seminole Gaming. The Seminoles acquired the hard Rock brand back in two thousand and seven and used it to name their gambling app. It's the biggest and the baddest tribal gaming company going after FanDuel and DraftKings where they live online.
Then that creates profitability, you know, in a five to seven ten year window, versus trying to be profitable the first year. That was their business model, and frankly Wall Street supported them in that.
Hard Rock has managed to get sports, gambling life licenses in eight states and wants to be a threat to the duopoly very humbly.
Our app is the number one app in the United States. DraftKings is second, not just here in Florida, but in the United States. It's because the technology that we have is world class.
You know, maybe, but if you want to know what I think, I think the Indian casinos are in basically the same position as the Vegas casinos. They're getting to the sports better too late, with the wrong approach, and they're hunting with inferior weapons.
So the morning of January tewond, I'm at my home in Florida, and I get a text from a high school friend of mine, Brian.
That's Danny Moses, a character in The Big Short, a book I wrote about the financial crisis. In the movie version, Danny was a short seller who had one swollen testicle, which on Wall Street kind of counts as an advantage. Anyway, back to Danny and his friend.
Eight fifteen in the morning. He's on a flight from Europe and he lives in Florida, and he's on the hard rock gap. But he can't gamble, because you can't you have to be in the state right to do it. And he says, Danny, you need to go check out something on the hard betting app called Specials under the NFL, And I go, what are you seeing? He goes, I'm seeing a crazy line that the Baltimore Ravens to beat the Detroit Lions in the Super Bowl is five hundred to one. I said, well, it can't be. Let me
go look. So literally he's in the air, I'm looking around and I find it and.
It's obviously a mistake. The playoffs are set, Detroit and Baltimore are both in them. Baltimore is better than Detroit and a favorite to make the Super.
Bowl, so both teams were locked in. And so I look at it, and I look at the reverse of it, which is Detroit to beat Baltimore, and that's sixty to one. So you know inherently that Baltimore to beat Detroit has to be less than sixty to one. So I'm texting with him and I said, all right, I'm going to put it down. I'll put down as much as I can. Well, the max bet being offered was fifty dollars, and I found out that day the DraftKings and FanDuel had offered
the same bet. Roughly the odds have called it thirty to forty to one, so we knew we had found something.
Of course, it's not likely that both Detroit and Baltimore will make the Super Bowl, but the true odds are nothing like five hundred to one. The Seminoles have clearly screwed up.
Call my friends in New Jersey. I'm like, you better jump on this quickly, I said, because it's probably going to go away. So they all put it down. Those like six or seven guys that made the bet.
Some huge number of gamblers have probably grabbed the five hundred to one odds. Then Danny uses Twitter to tell the Seminoles how badly screwed they are. He's actually measured it using a company called wager Wire. Wager Wire runs an entire market for secondhand sports bets. Yes, you can now buy and sell your sports bets with other gamblers, so wager Wire can tell you at any given moment
what your bet is worth. And wager Wire tells Danny that he could sell his fifthifty dollar bet for seven hundred dollars.
So I tweet out too hard rock bet by the way, which is probably run by a twenty something year old who just understands social media but not gambling, basically saying thanks so much for this opportunity.
Still, the Seminoles don't react. They must have algorithms. Everyone does, but the Seminoles algoes are obviously not up to speed. Not until Danny takes a photo of the bet they're offering and tweets it to hard Rock does the tribe react.
Fast forward a couple days. I open my hard Rock app. I'm down here in Florida and the BET's gone. Can't find it, And I searched back through and I find it. Says void basically voided the fifty dollars bet and credited my account back for fifty dollars. They canceled, didn't reach out to me, didn't call me. They you know, they didn't honor it. So I call my friends in New Jersey and I said, my BET's void, how about yours? Nope, not void, And they're The reason is because in New Jersey.
New Jersey Gaming Enforcement Division doesn't mess around.
The Seminole tribe is apparently willing to treat their customers in Florida one way and their customers in New Jersey another that's what it begins to dawn on. Danny Moses that he shouldn't be placing sports bets in Florida, that he'd be better off using friends to place bets with fandueland DraftKings in New Jersey. But then the plot thickens. The Baltimore Ravens and Detroit Lions keep winning. Both get
to their conference championships. The bet that wager Wire said was worth seven hundred dollars is now worth two thousand, seven hundred and eighty three dollars, and the seminoles are just pretending that it doesn't exist. Danny goes nuclear, or rather he goes onto television.
More and more gamblers are beginning to share stories of how bets got voided by their sports books, alike from Danny Moses, an investor who was profiled.
In I went on CNBC with an interview with contested Brewer in the middle of all this, and har Rock was claiming that I did reach out to customer service, but I did gets a one and hundred number, and it just goes into the abyss. I tweeted at hard Rock Help. I tweeted at hard Rock Bet. I could never get a response.
At the heart of the new sports gambling industrial complex is a predatory market. But the Seminoles don't seem cut out to be apex predators. The trick of the role is to coax Americans and too voluntarily making dumber and dumber bets. But you need to do it in ways that people don't really notice.
Even if I find something that I think is going to be great, I don't know if I'm going to get paid out on it, And to be honest, that's a confidence issue for me.
Obviously this is just one story, but what I hear in it is even the most powerful Indian tribe isn't close to ready to compete with FanDuel and DraftKings. If Danny could just short the Seminole tribe, he would, And I think maybe they sense their bigger problem because just recently, Seminole Gaming announced that they'd be open to forming a partnership with either FanDuel or Draft Things. And why would they do that if they thought they could compete with them.
That's why these two companies make such great villains. Yes they're dishonest with the public when they create their ballot propositions. Yes they're targeting vulnerable people who have no real idea what they're doing. Yes, they're effectively mining addiction, but none of that is why they make for great villains. They make for great villains because they're so incredibly good at what they do. Preachers aren't going to stop them. Native
Americans aren't going to stop them. Lord knows, short sellers aren't going to stop them. The market power of these two companies will enable them to capture their regulators, seduce the media, and in general evade real scrutiny. History might not repeat itself here, but I'm betting it at least rhymes.
Thank God, like a bigger Ranta.
This situation is obviously not exactly the same as that one. This sports gambling industrial complex will carve its own path through our society. The damage is already inflicting on athletes, on college sports, on how fans feel about the whole thing. That's where we're going next. But I'm not quite ready to leave Vegas yet, because I met a lot of interesting people there and I want you to hear more from the characters who populated this one time sports gambling empire.
So in the coming weeks, you're going to hear from gambling legend Billy Walters.
Because I got access to more money, I got invited to go to Las Vegas. And you know, clearly that was an eye opener. I mean, it's like, you know, a wild dog going to meet us.
You're also going to hear from some old school Vegas bookies. How's the legalization around the country changed your business?
A lot of these guys came in from Europe. They were very corporate, British corporate. This is the legal this is the marketing, this is the HR this is blah blah blah. Why don't we have to adapt ourselves to these Brits? You know, we just showed up on our doorstep a couple of years ago. They had got these English accents and every ratings are so brilliant.
Against the Rules is written and hosted by me Michael Lewis and produced by Lydia Gene Coott, Catherine Gerdeau and Ariela Markowitz. Our editor is Julia Barton. Our engineer is Jake Gorsky. Our music was composed by Matthias Bossi and John Evans of stell Wagon Cinfinett. Our fact checker is Lauren ves Polli. Special thanks to a few more folks
who made this season Against the Rules possible. Jacob Weisberg, Greta Cone, Sarah Nix, Christina Sullivan, Kerry Brody, Eric Sandler, Kira Posey, Jordan McMillan, j Flanagan, Owen Miller, Sarah Bruguier, Jacob Goldstein, and Sophie Crane. 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.
How does it feeled?
I have one a parlay because we don't have a trusting relationship. I'm counting it. Yeah, wait, that's actually dollars and ninety five cents. Oh you keep the change?
Well you also you as there.
The brains are in the operation.
Yeah, the brains are brain. There were no brains a found operation. That's the amazing thing. And the really amazing thing is that the first thing you think when you saw it worked out is I know something when all I did was purely yess. I think the trick to this game is, if that happens, you leave