# Prediction Markets: Regulatory Loopholes and Gambling Risks

**Podcast:** Better Offline
**Published:** 2026-11-04

## Transcript

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In October 2021, my brother David was diagnosed with pancreatic cancer.
A year later, he convinced me to make a podcast with him.
This podcast...
My biggest fear is that I am afraid of being forgotten.
My brother David is the story of the last chapter of my brother's life.
It's weird and messy and vulnerable, and I'm gonna share all of it with you.
Okay, so here we go.
Listen to My Brother David on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
There are thousands of podcasts that can tell you how to better yourself.
Get Worse with Kyle Pru is not one of those podcasts.
So if you're interested in getting thinner, going to therapy, starting peptides, setting boundaries, taking supplements, making your better, getting closure, then I would humbly recommend other podcasts.
If you're interested in blackmail, love bombing, cloning yourself, or getting revenge, then we've got a little something something for a dastardly individual like you.
Listen to Get Worse with Kyle Pru on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
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Hello and welcome to Better Offline.
I'm, of course, your host, Ed Zitron.
Now, everyone, I know how much you love gambling.
And those of you who have been gambling on the cockroach...
It's true.
They're unregulated and, you know.
As fun as they may be, we do have to turn a little bit of a blind eye.
But I'll see you there tonight.
Yeah, I mean, of course.
And also most of my money is in that.
But let's talk about the lesser forms of gambling, by which I mean, of course, prediction markets.
What has been going on there recently?
Because since you last joined, I've only seen things get more demented.
Indeed.
Yeah, since we last spoke, I think, I don't know, first quarter of the year, prediction markets have continued to just go absolutely crazy.
We're seeing record trading volumes basically every Sunday.
Now, why every Sunday, Ed?
Can you guess what happens on Sunday?
I can guess.
It's when the pigskin gets chucked around.
Exactly.
Yeah.
So, you know, these platforms position themselves as financial instruments, places where you can hedge your risk.
And lots and lots of Americans are hedging their risk to losing football games.
I don't know.
You know, basically, prediction markets are going crazy because they have started offering and have continued to offer the equivalent of parlay bets.
What is a parlay bet?
Yeah, yeah.
So when you place a bet on two individual outcomes, so that's like the Patriots win and I actually don't watch sports.
So my the amount of like examples I'm going to be able to provide is very low, but that's fine.
Right.
You know, the Patriots win and this.
This player scores this many touchdowns if I connect both of those bets and but if I'm right on both Then I get a massive payout because I'm basically tying together multiple discrete bets into one large wager Now these are super profitable for your traditional like online sports book because the odds are so long You know, it's very and you can make parlays with a lot of legs.
They're called individual bets are called legs, so With each leg that you add, your odds of winning go down, and the odds of the sportsbook taking your money go up.
So they're very profitable for the sportsbooks.
And prediction markets have started to offer them as well.
And they're less profitable for the prediction markets because they just take a cut of trading fees.
But yeah, people love to sports bet, and they love to tie multiple bets into one.
And that's a massive portion of the volume now.
How is this legal?
Because...
Even gambling on sports, which I truly don't do, but I've tried to see how far you can push them with VPNs just to sign up, and they're actually, surprisingly, why it's stopping that.
How is this legal?
Because I thought that there was very strong regulation on sports betting in general, because I know DraftKings and the other one, I truly don't remember.
FanDuel.
FanDuel, there we go.
How is it legal for Calci and them to do it?
Right, so...
DraftKings and FanDuel, you know, BetNGM, places like this, they operate on the regular sportsbook model, which is regulated state by state.
In 2018, there was a Supreme Court decision that basically opened up...
sports betting, which was illegal prior, except in a few jurisdictions, to any state that wanted to legalize it could.
And, you know, each state is going to have its own regulatory regime.
Think about it like how marijuana legalization worked.
Right.
If a state wants to legalize it, it can under its own terms.
So prediction markets are not.
technically sports betting.
It's a financial exchange.
So if you and I agree that there's a 50-50 chance of an event happening, I think it's 50% yes, you think it's 50% no.
We each put up 50 cents into a contract, and once the event happens, whoever is right gets the other's 50 cents.
So the contract is worth a dollar once the event is over.
And it's a contract between two people?
It's a contract between two people.
Yeah, they're called event contracts or binary options because they only have two outcomes.
And usually they're tied to yes or no questions.
So will this team win?
Will this player score more than seven touchdowns or whatever?
That kind of a thing.
And so because they're event contracts, because they're technically financial instruments.
They're regulated at the federal level by the Commodity Futures Trading Commission.
It's a small regulatory body that handles options contracts, things of that nature.
And because they're financial products, you know, they're legal nationwide.
You know, once you turn 18, you can trade stocks.
Once you turn 18, you can trade options.
Once you turn 18, you can trade sports options tied to, you know, the outcome of a sporting event.
So on an underlying basis, compared to a sports book, they are different.
But from a consumer point of view, they're identical product experiences.
And just to hammer that idea home, when you download DraftKings, and you open the app in New York, for example, and you open it up and you start betting, the odds that you're seeing and the betting that you're doing, that's on a traditional sportsbook model because New York has legal sports betting.
But if you then fly to California and open up the same app on your phone, the app looks identical.
The odds are identical.
betting behavior is identical, the whole UI, UX, everything.
But the underlying product that you're using is a prediction market because sports betting is illegal in California.
So even though there's an underlying difference from a consumer point of view, it's the exact same product.
It's the exact same experience.
That's why prediction markets were initially seen as kind of a threat to the sportsbooks.
But the sportsbooks realized that they can use prediction markets to sort of like unlock a bunch of new customers in states like Texas, California, a lot of Florida that don't have many legal sports betting options.
But just so we're clear, do the draft kings of the world now do prediction markets as well?
Yeah, that's what I'm saying.
DraftKings and FanDuel and all of them, they also have prediction markets.
So DraftKings, their tagline for all of their ads this year is that we're finally available nationwide.
You can DraftKings anywhere you are in the country.
And the ad campaign is like Kevin Hart and one of the Jonas Brothers, I think.
Kevin Hart?
I can't believe Kevin Hart would sell out.
Sorry, that's a joke for like 13 people who listen to the show and be like, ha ha, yeah, got him.
And if you've never watched the Z-Way interview with Kevin Hart, I cannot recommend it enough.
Z-Way, fantastic podcaster she is.
Anyway, moving on from Kevin Hart, is there anything stopping this?
Are there any efforts to try and...
stop this from existing or at least slow it down?
Or is this just, is this the new normal, at least until we have different people in Congress or what have you?
Definitely, there's a lot of efforts.
Yeah, I mean, yeah, exactly.
There's a lot of efforts to slow this down on a lawsuit basis.
Dozens of states, I think, have at this point sued Kalshi or Polymarket or the other prediction markets.
alleging that they're offering illegal gambling in their state and those cases are working their way to the Supreme Court.
I don't want to get into too many specifics because honestly, every four days there's another legal development that kind of changes the landscape.
But one thing is for sure, I think anyway, is that this is going to wind up at the Supreme Court.
It will need to be decided there whether or not...
you know, swaps, as they're known, these binary options tied to sporting events are swaps or whether they're sports bets.
That's the fundamental question.
Whether, you know, in 2011, when Dodd-Frank, I think that was the year, when Dodd-Frank was passed and we brought swaps under the regulation of the CFTC, whether Congress intended at that point that, you know, There would be sports betting with these swaps.
And, you know, I've spoken to Gary Gensler, who was the chair of the CFTC at the time and famously chair of the Securities Exchange Commission under the former President Joe Biden.
And he has told me, no, that was that was not the intention of Congress.
Congress did not.
Yeah.
It was barely the intention of Congress to stop anything.
I have a lot of cynicism about the regulation from that time.
But yeah, it's just it's yet more times in which regulation just created a new industry rather than suppressed one.
Yeah, absolutely.
I think that, you know, there's a question of whether like congressional intent actually matters, but it seems pretty clear that the congressional intent was not for there to be nationwide sports betting through financial contracts.
But, you know.
Whether or not the Supreme Court adheres to what was meant at that time or what – I've had people in the prediction market world be like, well, the law is very clear that it allows this.
And I just don't think that the Supreme Court really cares how clear the law is at any given time.
They're going to kind of interpret it how they choose.
So, that's what's so strange about all this as well, because finance and contracts and financial, those things are fairly well regulated, but it seems that these companies have just kind of used the regulation to make themselves legal rather than, I don't know, I realize I'm kind of dithering on this point, but it almost feels like they just found a loophole by ignoring everything.
It's just because you can't do options.
You could do options trading in most states, but...
There are limitations to how much margin you can have.
There are very fixed things you can and can't do.
But with this, you could just do anything as long as you're, what, 18, 21?
Is there even an age limit?
Yeah, it's 18.
That's nationwide.
Oh, good.
That's even better.
The argument for...
The whole point with event contracts and the idea that they...
what they're supposed to be doing.
You know, when, if you look at like old interviews with Tarek Mansour, it's the co-founder and CEO of Kalshi.
The example he always uses is Brexit.
So he was a trader or something at some firm before he founded Kalshi.
clients wanted a way to hedge their exposure to Brexit.
So it's kind of difficult to do that with like a package of stocks.
What stocks do you buy or not buy to estimate an outcome of Brexit?
It's kind of difficult to do that.
But a much cleaner way would be, well, what if I can just trade an option on like, yes, Brexit will happen.
And if it does happen, then I get paid because that's actually what I'm looking for.
So that's where binary contracts and...
can actually be useful.
That's like a, you know, an actual use case for prediction markets is this hedging opportunity.
And that's where I, you know, I think that's totally valid.
That's like the point of a financial market, right?
But the thing is like now their primary business is sports.
And so like when, you know, it's kind of a pushback about what the primary function of a financial market on that one though, because coming, like living in the beautiful beautiful Las Vegas, Nevada with our beautiful slot machines.
One of the things that I've noticed about the casinos is they very rarely let you bet on, for both the house's benefit and otherwise, bet on binary things.
Maybe you'll do a yes or no, but even red or black on a roulette table is 48.9%, what have you.
But the big thing is they don't let you bet on just how many fingers am I holding up or stuff like that.
That's the comment.
And the idea of, oh, I can hedge whether an outcome happens directly, feels like it's not even in, it's not even a financial market anymore.
It's not, you're not investing in, you're not actually investing in anything.
And this is because, this is why, by the way, Mormonism just made prediction markets against the religion.
I don't know if you heard about this.
No.
What?
Mormonism.
Yes.
So Mormonism, I've got to look this up.
Mormonism just made prediction markets because the argument is, yeah, it's, It's also illegal in Utah.
Yeah, there is that.
To be clear, we are not a pro-Mormon podcast, just getting that out there.
Yes, it's fostering greed, particularly amongst youths while producing nothing of value.
Gambling is built on the desire to obtain something for nothing, and this is the one and only thing I agree with the Mormons on, because that's the thing.
That's not a financial market.
Yeah.
The financial market is a market for financial instruments.
Unless you were saying that, I guess that there are probably financial instruments that aren't about, well, I mean, even commodities though, you're still betting.
You're still actually, I said betting, they're going to get me for that one.
You're still investing in a thing.
With this, it's I'm investing in and whether a thing happens, I guess.
I don't know.
I'm sure that someone's going to email me and say, well, there's an example here in finance.
I don't think anything like that should exist in finance.
I also think that we need to massively pare back almost every financial instrument.
I think that we are too speculative.
But it is interesting as well seeing the Mormons coming out as a moral side on this.
But that's what it comes down to.
That's the real problem with this.
It's not really betting on anything.
But I also think that you should make DraftKings illegal and Vangel illegal and Polymarket and all them illegal.
Send them a big boat.
Send them away.
If there's a million times more digital intelligence than there is biological intelligence, it's hard to imagine humans being in control in that scenario.
I'm Walter Isaacson, host of the new podcast, The Builders.
Right now, we're living through an AI arms race.
So I went directly to the people shaping that future.
Elon Musk, Dario Amadei, Alex Karp, Feifei Lee, Palmer Luckey, because I wanted to understand what the most consequential builders believe.
what they fear, and where they think this is all headed.
Silicon Valley is always saying the cliche thing about the way to predict the future is to create it.
Well, yeah, it's up to us.
But when you say us, who's us?
Is it 400 people that you know in Silicon Valley?
Is it me down here in New Orleans?
They're brilliant, controversial, and they're already shaping the future.
The question is, whose imagination do we want to live in?
This is going to determine the fate of nations and economies and the future of humanity.
Listen to The Builders on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
First thing I hate about eulogies is they never actually tell the truth.
I'm Dave, and I've been an a**hole for my life.
In October 2021, my brother David was diagnosed with pancreatic cancer.
A year later, he convinced me to make a podcast with him.
This podcast.
Okay, so here we go.
We didn't know what we were doing, so we just started recording.
We discussed cancer.
Since the radiation, I've lost about 10 more pounds.
We fought.
That pisses me off.
And we talked openly about the fact that David was going to die.
I am afraid of being forgotten.
My brother David is the story of the last chapter of my brother's life.
It's weird and messy and vulnerable and...
I'm going to share all of it with you.
The constant back and forth battle about how do I, how do I not just be alive, but actually live.
Listen to my brother David on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
There are thousands of podcasts that can tell you how to better yourself.
Get Worse with Kyle Pru is not one of those podcasts.
So if you're interested in getting thinner, going to therapy, starting peptides, setting boundaries, taking supplements, making your better, getting closure, then I would humbly recommend other podcasts.
But if you're interested in blackmail, love bombing, cloning yourself, or getting revenge, then we've got a little something something for a dastardly individual like you.
Take a listen to some of the incredible advice we've given so far.
Fake a back injury.
Get the spray tan.
Up your alcohol consumption.
Only women should be allowed to have guns.
Kill them.
Kill them.
Kill him with a gun.
Listen, it's already over.
I'm all about lying if it's something that really happened.
The next time a bear is running at you, you just calmly stop what you're doing.
You look the bear in the eye and you say, this isn't you.
Do not preserve relationships.
You don't need them.
You only need one thing, and that's the Get Worse podcast.
Listen to Get Worse with Kyle Pru on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
Yo, what's up?
This is Big Boy 1.5 for the legendary Outkast, and I'm here with my two sons.
This is Cross.
And I'm Bamboo.
And this is Bloodlines and Baselines, real conversations between the father and his citizens.
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Finance, romance.
We got to talk about them aliens too now.
Get in here before they cut us off.
We ain't going to go too deep on this.
You know what I'm saying?
Trying to get to season two.
He does that every episode.
There's some topics we got to save for later.
They got to get the real.
And we're going to give it to you straight, no chasing.
Like what happened to my brother's sneaker game?
And then once COVID hit, I kind of just like stopped being a sneaker head.
And then that's when I started wearing the Jesus sandals.
Damn, man.
That's when I started wearing the Jesus sandals.
So the COVIDs came out and brought you close to the Lord.
And now you just got the sandals.
Or the day dad told us what he really does on tour.
I'm a Pokemon master.
I'm level 56 now because I've been busy.
Bloodlines and Baselines, our new podcast with a K.
And that's Baselines, B-A-S-S, like the A-N-A.
Dropping three times a week.
I thought we might be on to something, boy.
Listen to Bloodlines and Baselines on the iHeartRadio app, Apple Podcasts, wherever you get your podcasts.
Well, the thing is about like on the pointing of like whether this is, I guess, the big question has been whether prediction markets are investing or not.
And should they sit alongside your 401ks, your ETF stocks, whatever?
Is that what people are suggesting?
Is that being put on the table?
Well, if you open Robinhood right now, you can liquidate your stock position and go put it all on football with prediction markets.
Yes, you can.
Like in the same app.
Is there a prediction market ETF though, which is just a fund of different options that you could...
buy into that usually it's like stocks or bonds there's no prediction market etf but i have seen that there is something and i need to do more reading and reporting on this so i don't want to get too into it and and tell your listeners but everyone should go look up um hockey etf because i'm pretty sure that you can now trade an etf tied to the performance of hockey teams and um yeah i i'll make that comment on that Volatility shares has filed to launch an exchange-traded fund for every NHL team, a set of products, unlike anything currently trading.
And I'm just not going to read the rest of that article because I'm going to put a gun in my app moving on.
But this is the thing.
Again, talking of Vegas, though we obviously love our gambling and we love our tax.
We don't have to pay state tax, but there are big guardrails around gambling there.
And I should be clear, this is not me being pro-gambling so as much as I am pro-responsibility and restraint wherever it can be found.
But there are big, like, if you look too young in a casino, they can and they will come over and tell you to leave.
If you look like you are too trash, they will actually pull you from a table.
They're hesitant to provide credit.
But I read a story the other day.
I think it was one of the DraftKings one.
It was ProPublica.
I might be wrong on this one.
pretended to be a problem gambler and within a week they had a personal sales rep.
Yeah, yeah, yeah, exactly.
Well, the thing is, Ed, like, what is the difference between a problem gambler and a profitable customer at a sports book?
I would argue that there is not one.
Something like, you know, I think there was a research in the Business Journal of Gambling and Sports, but I can't remember the exact journal, but some research published that, you know, Something like 5% of sports bettors are responsible for more than 80% of all of the profit and revenue that...
sportsbooks generate.
So a huge portion of profits come from a very small, potentially problematic source.
And that ratio roughly holds across vice industries.
It's the same in marijuana, alcohol.
This is called the addiction surplus.
So it's this argument that the addictive nature of the product inherently makes it easier to sell to people who are more prone to addiction.
And some Researchers have argued that this leads vice industries to tamp down on consumer protections because, you know, on a gambling site, their revenues are tied one to one to consumer losses.
So everything they do to protect consumers literally cuts into the bottom line.
Jesus.
I mean, yes, it does.
I think we need the Nevada Game Commission to come down on these people.
That's the actual thing that I don't get, though, because you spend your time in Vegas, people are like, oh, yeah, the NGC will mess you up, but it's somehow not effective on this one?
Yeah, I mean, there's only so much they can do to require them to do certain customer...
protection measures.
We're also just in the U.S.
like way far behind other countries.
You know, in the U.K., for example, there's a lot more stringent consumer protection and regulations on gambling than there is in the U.S.
just because for sports betting in particular, you know, it's less than a decade that we've had this kind of nationwide fascination and thing with it.
We're a much more, the U.S.
is a lot more like historically in the way that we think about gambling.
We think about Vegas, we think about slots.
Whereas in the UK and some more European countries, sports betting is synonymous with gambling in a way that it really wasn't in the US until 2018.
Yeah, I mean, it just feels like this isn't slowing down.
It's very worrying to me.
Yeah, I mean, we are seeing a bit of a taper in like...
and a plateauing, I should say, in terms of total dollars wagered on online sportsbooks.
But yeah, generally, yeah, generally gambling participation is going up.
I would say more people are gambling than ever.
That's an easy claim to make.
50% of American men under the age of 49 have an account.
on a digital sports book.
So that's half, half of men under 50 in the U.S.
have an account on a digital sports book.
So yeah, it's prevalent.
You know, you watch NFL and it's kind of built into the way that the commentators talk about the game now.
It's generally unavoidable, I would say.
And I think that...
There's a growing betting fatigue among the broader population, and we're starting to see that show up in rising tax rates in some states that have legal sports betting and a general questioning of whether state governments should have done this.
But the problem is legalizing gambling is a great way to raise...
state revenues and get more money into the coffers of a state without raising taxes.
Does Kalshi and Vandula and all them actually provide state tax revenue?
Yeah, the sportsbooks do.
The problem for states is that the prediction markets don't because they're federally regulated.
So they don't pay state taxes.
But if a state is like, well, Ohio, for example, Governor Mike DeWine I think he's still the governor.
Yeah, because the election's coming.
Anyway, Governor Mike DeWine has called his decision to legalize sports betting in Ohio to sign that bill into law one of the greatest mistakes of his 50-year political career.
He has said that he regrets it deeply.
But the problem is all of that tax revenue that comes from sports betting is now funding things like state pension funds and infrastructure.
And so once the state is seeing that money, it's very hard to then walk that back.
because they're putting it to use, you know?
It's kind of like data centers, data center construction.
I don't know.
There's all sorts of weird things that are happening with that as well.
I don't want to get into because I'm already pissed off enough already.
Yeah, yeah, yeah.
By the way, that, I was correct.
It was a ProPublica story by Jake Pearson, which I'll link in the notes, about how he blew $1,800 in one night by chasing losses with bigger bets.
And then the next day, he got invited to audition for its VIP program.
Truly evil.
Just, I see there's nothing other than actually evil.
And I don't know.
I know that casinos do the same thing.
I'm not defending them, but it's, I don't know.
There are also big signs that say gambling problems.
I find this whole thing just kind of repulsive and it's, America didn't need more gambling.
If there's a million times more digital intelligence than there is biological intelligence, it's hard to imagine humans being in control in that scenario.
I'm Walter Isaacson, host of the new podcast, The Builders.
Right now, living through an AI arms race.
So I went directly to the people shaping that future.
Elon Musk, Dario Amadei, Alex Carr, Feifei Lee, Palmer Luckey.
Because I wanted to understand what the most consequential builders believe, what they fear, and where they think this is all headed.
Silicon Valley is always saying the cliche thing about the way to predict the future is to create it.
Well, yeah, it's up to us.
But when you say us, who's us?
Is it 400 people that you know in Silicon Valley?
Is it me down here in New Orleans?
They're brilliant, controversial, and they're already shaping the future.
The question is, whose imagination do we want to live in?
This is going to determine the fate of nations and economies and the future of humanity.
Listen to The Builders on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
First thing I...
hate about eulogies is they never actually tell the truth.
I'm Dave and I've been an a**hole through my life.
In October 2021, my brother David was diagnosed with pancreatic cancer.
A year later, he convinced me to make a podcast with him.
This podcast.
Okay, so here we go.
We didn't know what we were doing, so we just started recording.
We discussed cancer.
Since the radiation, I've lost about 10 more pounds.
We fought.
That pisses me off.
And we talked openly about the fact that David was going to die.
I am afraid of being forgotten.
My brother David is the story of the last chapter of my brother's life.
It's weird and messy and vulnerable, and I'm gonna share all of it with you.
The constant back and forth battle about how do I, how do I not just be alive, but actually live.
Listen to My Brother David on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
There are thousands of podcasts that can tell you how to better yourself.
Get Worse with Kyle Pru is not one of those podcasts.
So if you're interested in getting thinner, going to therapy, starting peptides, setting boundaries, taking supplements, making your better, getting closure, then I would humbly recommend other podcasts.
But if you're interested in blackmail, love bombing, cloning yourself, or getting revenge, then we've got a little something something for a dastardly individual like you.
Take a listen to some of the incredible advice we've given so far.
Fake a back injury.
Get the spray tan.
Up your alcohol consumption.
Only women should be allowed to have guns.
Kill them.
Kill them.
Kill him with a gun.
Listen, it's already over.
I'm all about lying if it's something that really happened.
The next time a bear is running at you, you just calmly stop what you're doing.
You look the bear in the eye and you say, this isn't you.
Do not preserve relationships.
You don't need them.
You only need one thing, and that's the Get Worse podcast.
Listen to Get Worse with Kyle Pru on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
Yo, what's up?
This is Big Boy 1.5 for the legendary Outkast, and I'm here with my two sons.
This is Cross.
And I'm Bamboo.
And this is Bloodlines and Baselines, real conversations between the father and his citizens.
Talking about the music, the sports, the culture.
Finance, romance.
We gotta talk about them aliens too now.
Get in here before they cut us off.
Ain't gonna go too deep on me, you know what I'm saying?
Trying to get to season two.
Man, he does that every episode.
There's some topics we gotta save for later.
They gotta get the real.
And we gonna give it to you straight, no chasing.
Like what happened to my brother's sneaker cane?
And then once COVID hit, I kind of just like stopped being a sneaker head.
And then that's when I started wearing the Jesus sandals.
Damn, man.
That's when I started wearing the Jesus sandals.
So the COVIDs came out and brought you close to the Lord.
And now you just go to Sandals.
Or the day dad told us what he really does on tour.
I'm a Pokemon master.
I'm level 56 now because I've been busy.
Bloodlines and Baselines, our new podcast with a K.
You feel me?
And that's Baselines.
B-A-S-S.
Like the A-N-A.
Dropping three times a week.
I thought we might be on with something, boy.
Listen to Bloodlines and Baselines on the iHeartRadio app, Apple Podcasts, wherever you get your podcasts.
See ya.
While we are on the subject of problem gambling, you have a little story you're working on.
I don't mean little in a small way.
I mean, it's going to be very interesting that you're working on that will be out by the time this goes out, just to be clear.
Indeed, yes.
I am working on a story publishing, hopefully today as we're talking, about the National Council on Problem Gambling.
This is the largest nonprofit dedicated to mitigating problem gambling, gambling addiction harm, advocating at...
a federal level for more funding for gambling addiction, such and such.
They're the main voice advocating for gambling addiction in the United States.
And over the past, since January 2025, their organization has...
been going through a lot of turmoil, to put it gently.
So the way that your viewers are probably most familiar with the National Council on Problem Gambling is they used to operate 1-800-GAMBLER.
So when you watch a gambling advertisement, right now at the bottom, you'll see, you know, gambling problem question mark, call 1-800-GAMBLER or 1-800-MY-RESET.
So last year, when...
So, okay, I'll just, I'll give you the whole, there's a lot here.
So I'll give you.
Yeah, please, please.
So 1-800-GAMBLER, the phone number, is owned, the rights to it are owned by a affiliate organization of the NCPG, National Council on Problem Gambling, in New Jersey.
So it's a New Jersey affiliate of the NCPG that owns 1-800-GAMBLER.
And from 2021 or so, they were licensing the rights.
to operate 1-800-GAMBLER to the NCPG.
And the NCPG got like a $6 million donation from the NFL to basically modernize the problem gambling helpline system.
The way that it works is- How did they modernize it?
Yeah, they basically, you know, that's a great question.
They- put more focus on data collection.
So there was a question about, you know, you call the number and instead of getting help right away, you're being asked survey questions.
That's something that I found in my reporting was happening.
And basically there were questions about whether or not individual call centers in individual states were up to snuff, as it were, for the NCPG.
So the NCPG decided that in Nevada, the Nevada call center taking calls from, you know, area codes in Texas, Nevada, and oh, I'm sorry, forgive me, the New Mexico call center, you know, whether or not it was providing high quality care to people dialing 1-800-GAMBLER.
And one of the things that was happening at the New Mexico call center run by, you know, just a handful of people, there's really not a lot of people that work in problem gambling.
They had a Navajo speakers online at all times because the Navajo Nation is in New Mexico.
You know, Native Americans have a higher rate of gambling problems than the rest of the population.
And they would get a lot of calls from Navajo Nation, you know, seeking to speak to Navajo speakers, work with them, etc., administer therapy help.
And the NCPG made the decision to reroute calls away from the New Mexico call center, you know.
basically with very little explanation.
And this led to a number of calls being dropped, a number of Navajo speakers not getting help in a timely manner, calls getting transferred back to New Mexico in the middle of the night.
Something similar happened in Florida, where the Florida call centers were not up to snuff in the view of the NCPG, and Florida was rerouted away.
So New Jersey was getting wind of all of this.
And was like, all right, guys, we need to exercise more control over 1-800-GAMBLER.
You guys are getting, you're being a little too overzealous with what you're doing.
And the NCPG, you know, freaked out.
There was a legal battle sparked between the NCPG and the New Jersey Council.
And what happened is eventually the NCPG lost control of 1-800-GAMBLER.
So after spending $6 million from the NFL and putting all this effort and money into upgrading the system, they lost it all.
And one of the things that happened when they were modernizing the hotline is...
They worked with a lot of gambling firms to get it included into all of the ads.
So all of these gambling operators, your DraftKings, your MGMs, etc., had 1-800-GAMBLER in their advertisements.
And then all of a sudden, the organization that was operating it lost control of it.
So the operators are like, wait, what are we doing?
Are we promoting the right resource?
Basically, again, cutting into the way that service was happening.
And then in January...
The NCPG hires Heather Moorer, the new executive director of the NCPG.
She has a reputation as an effective fundraiser, but she has no prior experience in problem gambling.
And then in April, she tells board members that there is a potential new donor to the organization.
One of the roles of a board of directors at a nonprofit is to vet, you know.
corporate partnerships, talk about donations, the terms, etc.
And so for that reason, it would be normal to have a board meeting.
What wasn't normal is that before the meeting could begin, Heather Moore insisted that everybody sign an NDA.
Just before the meeting.
Just before the meeting.
And that had never been done before.
That's very normal.
Everyone needs to sign a non-disclosure agreement before I can tell you about this potential new partner.
Great.
Okay, fine.
Everyone signs.
And then Heather Moore reveals, okay, it's a $2 million donation, second largest in National Council on Problem Gambling history, and the potential donor is Kalshi, the prediction market.
So this raises a lot of red flags pretty much immediately.
A number of donors to the NCPG...
are in lawsuits with Calci.
A number of them have competing business interests.
And Calci, as we were talking about earlier, being regulated by the feds, doesn't have the kind of consumer protections that are built into the regulations that govern sportsbooks at the state levels.
So there's a question of whether or not Calci is in alignment with the NCPG's mission.
So all of these questions are coming up at the board meeting.
And Morris says, well, unfortunately, we can't do anything about that.
that because I actually already signed the deal with Kalshi.
It's too late.
Okay.
And then like two weeks later, news comes out and it basically, you know, drops like a bombshell in the, uh, you know, gambling addiction advocacy community.
I talked to this guy, Mark Lefkowitz.
He's been involved with the NCPG since the late 80s.
And he said, you know, the NCPG taking Cal Street's money is like, quote, a National Council on Teenage Sex Abuse taking money from Jeffrey Epstein, end quote.
Hell yeah.
Nailed it.
People are not happy.
People are not happy about this donation.
And then, you know, a bunch of other stuff at the NCPG starts going down, you know, The woman who is the director of programs for the NCPG, her name is Jamie Costello.
She resigned after four years.
She was the longest running staff member, and she was overseeing all the helpline operations.
So she had a very important job at the NCPG, and their staff was already spread pretty thin.
So she put her three weeks in.
And, you know, it wasn't connected to the Kalshi donation.
She told me, you know, quote, I hold myself to things like respect and compassion and open, uncomfortable, transparent communication.
And that just wasn't what I was experiencing as a staff member, end quote.
So she resigns and then gives three weeks notice on a Monday.
And Tuesday morning, she gets an email.
It's her last day.
You're done.
And she gets cut out of her systems.
So any assistance that she could have given to her staff members to help continue to run the National Problem Gambling Helpline, which is like the widest known addiction resource in the country, is now lost.
And so there's a lot of turmoil going on there.
And then that was on Tuesday.
By Saturday, Heather Moore turns in her resignation to the board as well after fewer than 10 months on the job.
Amid all of this, a bunch of donors to the NCPG have been pulling out the gambling regulators in Ohio and Michigan, the problem gambling councils in Nevada and Washington all pulled out of the NCPG after decades-long relationships.
Basically, the upshot is that at a time when gambling addiction and gambling participation are on the rise, because remember, they're tied together, The main organization that advocates at a federal level for there to be federal funding for gambling addiction and research, all of that stuff, they are in complete disarray.
And there's no one else to pick up the slack, really.
Pretty much, yeah.
There's no one else that's necessarily seen as kind of the top.
person, the top voice.
And so, yeah, it's a very, I think, you know, I hope that your listeners go on and read the story because, you know, it's quite a like a step by step retelling of what's been going on.
But yeah, I mean, it's it's pretty concerning for a lot of advocates and people that work in the problem gambling space because this organization, which for the past, you know, since the 70s has been the primary org, you know, coordinating response to rising levels of gambling addiction is now you know, in the wind as it were.
All right.
So I just want to repeat this.
Email me if you hear any gambling ads on this show, anything like that.
I want to hear.
I want them off the show.
Fuck these people.
I don't know.
I find that I didn't think that things would have improved since we last talked, but the idea of the main gambling addiction site being fucked over, not cited, sorry, the idea of the main gambling helpline.
being basically destroyed and the organization behind it is extremely grim.
Is there any effort to make any of this illegal though?
Is there any efforts to try and bring this down as we wrap up here?
Honestly, not really.
I mean, it makes so much money, Ed.
That's the thing.
How much money does it make in comparison to the other industries?
How much money does the gambling industry make in comparison to the other industries?
Yeah, I mean specifically the prediction markets and such.
Well, prediction markets, they don't have as great of revenues as the sportsbooks.
I don't have those numbers right in front of me for the comparison.
But I mean, even with the online sportsbooks, the DraftKings and the FanDuel and such.
Yeah, they're making a lot.
I mean, suffice it to say that their margins are very good because they are selling a product that is very easy to sell.
It's easy to sell and get people into gambling because it makes your brain feel great.
You know, people that were selling cigarettes did not exactly have a very difficult job because people were addicted to cigarettes.
And the main way that people engage with gambling these days, online sports betting, is very frictionless.
You know, it used to be that you would go to the horse track and there were...
a dozen races in a single day and all of your, you know, your gambling, the highs and the lows of it were spread out throughout the course of a day.
Now, within a single quarter of a football game, you can be placing dozens of bets every minute and It's in your phone.
Everyone has a casino in their pocket these days.
And as I say, there is less and less ability for the people who want to do good and protect people who are being harmed by this product to actually step in and make things happen.
Is there anything that people can do?
I'm trying to find some way through.
Are there organizations that are worth donating to?
Jesus Christ.
Yeah, I don't know if I can make that kind of recommendation, but I would just say that everyone here.
Here's my like one thing.
If you have a friend who ever says to you, oh, I lost X amount of money, so I have to keep betting to win it back.
You need to have a conversation with them right then and there.
That's called chasing losses.
That's one of the strongest predictors of gambling related harm.
And, you know.
Gambling addiction.
I know you keep searching for a silver lining here, Ed, but I'm going to keep bombarding you with depressing statistics.
Sounds good.
Gambling disorder, you know, is one of the hardest addictions to necessarily spot.
There's no urine test you can take that shows you've been spinning roulette all night, right?
There's no track marks on your arm.
People can hide their financials from their families.
But the difference is that, you know.
Gambling addiction is one of the most dangerous.
If you have a gambling disorder, there's a 20% chance that you'll attempt suicide in your lifetime.
That's the highest of nearly any mental health disorder.
It's got a ton of comorbidities.
You're more likely to have a substance use disorder, depression, anxiety.
It's associated with homelessness, crime, financial desperation, child neglect, domestic abuse, all of this stuff.
And again, there's no federal funding.
There's no federal funding for gambling addiction research.
None.
Zero.
I'm just going to say, then, I think the thing you have to do is, if you have a friend who has a gambling addiction, do not try and just morally attack them.
That's the one thing I'll say.
I've known a few people who have had that in Vegas.
It's like, be there and listen to them and try and work out what it is they're trying to feel and why they're trying to feel that.
I think it's the best I can say.
Nobody starts drinking because they think they're going to become an alcoholic.
Because they're having a great time.
Because they're having a great time.
And I think that there is a...
kind of notion that gambling addiction is a moral failing.
And if you were only responsible enough, you wouldn't have a gambling addiction.
But, you know, this idea of responsible gambling, that's been pushed a lot by the industry because you'll note that puts the onus on the consumer to be responsible rather than on the corporation that's selling the addictive product to do so in a more responsible or better way.
So this idea that, you know, individual consumers have the power.
to stop themselves when they begin to experience addictive behaviors.
It's just incorrect.
And I think hopefully as it becomes more widespread, which is very unfortunate, hopefully one of the positives of that is that there's more understanding of the fact that this is just brain chemistry.
People can't help themselves.
And so we need to be there for them and understand what they're going through and not moralize it.
Hey, I like that as an ending point.
Nick, where can people find you?
You can find me on Barron's.com, B-A-R-R-O-N-S.
Or if you're in New York City, you can pick up a copy of our print issue out on newsstands every Saturday, every week.
Hell yeah.
And you can find me on betteroffline.com and google.com slash poison.
That's where you find me now, slash poison.
All right, you've been listening to Better Offline.
We'll be back with the monologue this week.
Cheers.
Thank you for listening to Better Offline.
The editor and composer of the Better Offline theme song is Matt Ossowski.
You can check out more of his music and audio projects at matasowski.com.
M-A-T-T-O-S-O-W-S-K-I.com.
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