Inside the world of sports betting

Make Me Smart January 7, 2023 Transcript

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Kimberly Adams 

There’s music

Kai Ryssdal 

There it is, here it comes. Hey everybody, I’m Kai Ryssdal. Welcome back to Make Me Smart, where none of us is as smart as all of us.

Kimberly Adams 

And I’m Kimberly Adams, thank you for joining us. It’s Tuesday, which means it’s time to dive deep into a single topic. And today, we’re all going to get smarter about the business of sports betting. With the Super Bowl coming up this weekend, it’s almost certain that most of the people who will be legally betting it will make this the most legally bet on sports event ever.

Kai Ryssdal 

And betting is of course, a huge part of American professional sports, both legal and not. But we’re gonna talk about the legal side, because there’s plenty of that who really wins and loses, other than the house and what it might mean, actually, for the future of sports in this economy.

Kimberly Adams 

Here to help us understand all this is Danny Funt editor at The Week magazine and freelance sports journalist. Welcome to the show.

Danny Funt 

Hi, thanks for having me.

Kimberly Adams 

So when those who choose to sit down and watch the Super Bowl this weekend, assuming that they’re not just watching for the ads, how much legal betting will be going on?

Danny Funt 

So as far as legal betting goes, the estimate is over a billion dollars, which is, as you said, going to make it the most legally bet on sports event in US history. Betting is legal in 33 states and Washington DC. And there’s just enormous opportunities in so many of these states that, yeah, it’s going to shatter these records.

Kai Ryssdal 

What’s the back of the envelope calculation for not legal betting on the Super Bowl. Have you got any idea?

Danny Funt 

The American gaming Association, the industry trade group, estimates 16 billion, so that counts offshore betting, betting among your friends, just a staggering number.

Kimberly Adams 

No wonder people want to capture some of that. Walk us through what placing a bet on one of these sporting events looks like well, how does it work, at least on the legal side.

Danny Funt 

So the the big area of growth, and now the big majority of betting action is online. And that opens so many doors for these businesses to have betters betting throughout games, just constantly. That’s one of the hottest trends in the sector. But one of the interesting things about the Super Bowl is in addition to betting on who’s going to win, how many points are going to be scored, those sort of standard bets. There’s enormous opportunities to bet on just about every component of the game, and some aspects outside of the game. So at BetMGM, for example, there are 1000 of these “prop bets”. How many yards is Patrick Mahomes going to throw. At some other sports books you could bet on how long is Chris Stapleton’s national anthem going to last? What song will Rihanna start with at the halftime show? Basically, every possible component of the Super Bowl is now a betting opportunity.

Kai Ryssdal 

Isn’t it true that not very long ago in this country sports betting was illegal on a federal basis. And how did we get to where now it’s illegal in 30 whatever it is states?

Danny Funt 

Right. So betting is as old as American professional sports, but as you said, it had been outlawed for the most part outside of Nevada until 2018 when the Supreme Court said that a federal law that prohibited states from legalizing sports betting violated state sovereignty and that opened the floodgates for initially Delaware and New Jersey and now 33 states to legalize betting. Interstate betting is still illegal on the federal level. So a Californian where betting is illegal can’t place a bet at a Colorado sportsbook. But as we’ve seen the intrastate betting is just exploding.

Kimberly Adams 

But I mean, does it even matter about betting on a Colorado sportsbook? If you can still bet on the Colorado game in your California sportsbook? I feel like I’m using these words wrong.

Danny Funt 

No, I’m with you. So yeah, that is a key distinction. If you’re in a state where betting is illegal, there’s geo locating on all of these sportsbook apps. So they police that very aggressively. You can’t bet in a state that’s illegal through a operator where it is legal. So that’s why, you know there’s so much pressure on states that haven’t legalized to join the band bandwagon and you know there’s been several states this year that are legalizing and the projection is that that’s going to continue

Kai Ryssdal 

Are you a better by the way?

Danny Funt 

You know I think my dear mother might be listening so I’m not gonna comment on that one

Kimberly Adams 

You’re just like I just know a lot about it….

Kai Ryssdal 

So look so here’s here’s why I ask right I mean, you’re obviously a sports fan, you’re knowledgeable about betting and I guess my question is do you think “gaming” to use the industry term, influences how changes how fans watch a given sport?

Danny Funt 

Oh, absolutely. Whether you’re betting or not, and I think that’s a big source of frustration for the you know, traditional casual sports fan is that betting advertisements are just totally inescapable. Whether you’re watching the game, reading about the game, listening to your favorite podcast, you’re inundated with betting ads. So yeah, that’s a that’s just fundamentally changing how American sports are consumed whether you’re betting or not.

Kimberly Adams 

The NFL once opposed legalizing sports betting and now the league has like official, this word is so strange to me “sportsbook partners.” So first of all, why why is it called the sportsbook? And then why did the NFL change its mind on this?

Danny Funt 

So a sports book is just the place that you go to place a bet. That can be a brick and mortar, retail sportsbook or places like FanDuel and DraftKings that do most of their business online. Yeah, as you said, the NFL and all the other professional sports leagues and the NCAA, were adamantly opposed to legalizing sports betting until that Supreme Court decision and then very quickly, they said, “Well, if companies are going to be profiting on our product, we absolutely want a piece of that pie.” And they’ve signed extremely lucrative deals with sportsbook operators, since 2018.

Kai Ryssdal 

And they get a cut like the NFL gets a cut.

Danny Funt 

It’s not literally a cut. They sometimes they’ve tried to impose what they call an “integrity fee”, which is basically saying “if we have to make sure there isn’t point shaving and other corruption, we ought to get paid for that.” But they also have deals to provide their data, you know, their proprietary data to the sportsbooks. And there’s the teams have individual deals with sportsbooks. So more and more you’re seeing, like literal betting locations in the venue’s which is pretty remarkable.

Kai Ryssdal 

Well, so look along those lines…

Kimberly Adams 

They have space in stadiums and arenas that’s physical space they can rent out,

Kai Ryssdal 

Right it’s crazy.

Danny Funt 

Yeah, in the DC area, every pro sports venue now has a onsite sportsbook, where fans can bet during the game.

Kai Ryssdal 

Alright, so look, it’s not like I’m you know, purer than the driven snow but but do you and by you, I mean, you know, the people you talk to you and those in your orbit, do they worry at all about about the corrosive nature of of gambling and sports? I mean, you go from Shoeless Joe, to Paul Hornung, to Pete Rose. And there are some really high profile examples.

Danny Funt

Yeah, and that’s what led to the crackdown in the first place. I think even if we don’t yet have a major case of some sort of corruption, and you had an NFL player who was suspended for the entire season last year for betting on football. So the league’s are definitely policing it aggressively. But even beyond that, every time nowadays, you see a questionable call by the referee, there’s just an explosion of “aha, the game is rigged. There you go. The refs are betting on the game.” So even the fear or the the suspicion has a corrosive impact.

Kimberly Adams 

And beyond just sort of the corrosive impact for you know, like fixing the game and breaking the law in that way, there’s also sort of the social effects of this much gambling, like you mentioned, the sportsbooks in DC there have been some shootings outside of them here. And I wonder what this expansion of gambling in so many places has done to people dealing with gambling related addictions?

Danny Funt

Yeah, that’s an inevitability. And a lot of people say, “you know, imagine if you struggled with gambling, and now you basically have a casino in your pocket”, the temptation must just be devastating. I think one area where that’s really pronounced and you’re seeing a lot of backlash is with some of these sportsbooks that advertise, they have marketing deals with colleges, and there’s some data seems to suggest that younger people struggle with gambling problems more than older adults. So that just magnifies why that’s so controversial.

Kimberly Adams 

Are states like getting a tax windfall from all of this when they sign on?

Danny Funt 

Yeah, I mean, that’s clearly the biggest driver for why they’ve changed course and started legalizing. Some of the tax revenue has failed to meet expectations, and we’ll see how that impacts the business and also the tax rates. But yeah, that that’s certainly top of mind for any lawmaker who’s decided to allow this in their state.

Kimberly Adams 

Alright Danny Funt, editor at The Week magazine and a freelance sports journalist. Now I fully understand what sportsbook means. And I feel a lot smarter. Thank you.

Kai Ryssdal 

Danny thanks a lot.

Danny Funt 

Thanks so much.

Kai Ryssdal 

There you go. This is one of those where I learned something I didn’t I didn’t know…

Kimberly Adams 

I learned quite a lot

Kai Ryssdal 

Gaming establishments had slots in stadiums and all that jazz. I don’t know

Kimberly Adams 

Yeah, I was down at Capital One Arena, which is the hockey/best basketball stadium here for a media tour a while back and they were showing like it’s kind of big, it’s nice looking, too. It’s got like really good chairs. And it’s like a section you can only go into if you’re doing that. And when I was in Vegas for a convention a while back there was like a whole section of Caesars Palace dedicated to it that was super elaborate. And yeah, wow. It’s it’s alive. Are you Are you do you like to place a friendly wager on the game?

Kai Ryssdal 

I am I am not I’m a terrible gambler. I don’t enjoy it. I don’t like Las Vegas. I don’t it’s not my gig. And so be it, you know?

Kimberly Adams 

So you know when to hold them and know when to fold them? You know…

Kai Ryssdal 

I never I never get that. Stop it. I just never get the hand of the cards… Alright, anyway

Kimberly Adams 

There’ll be time enough to coun… Okay real quick before we go to the break. I know we’ve been having fun with this. But we did want to let folks know that if you or someone you know is struggling with a gambling disorder, the National Gambling Hotline is available 24/7. That number is 1-800-522-4700. We’re also going to add a list of resources to our show page. And once again, that number is 1-800-522-4700 and we will be right back

Kai Ryssdal 

Alright, time for the news fix. I’m so intrigued by item one here on your list. Yes, it’s funny because I am not watching despite many, many recommendations, of many, many people, The Last of Us on HBO and I imagine you and I aren’t watching for the same reason: because we’re cowards when it comes to zombie movies.

Kimberly Adams 

And I’m fine with it. I’m being shamed by my own family, my wife and my kids are shaming me. And I’m like, no, no, watch it. I get terrible nightmares every time I watch anything zombie related. And I’m really torn because everyone’s like, “Oh my gosh, it’s so good. It’s so well produced” and I’m like, but is it worth the nightmares? Anyway, my story about The Last of Us, which I haven’t seen, is that there was this big to do about how it’s such a good show and it’s so popular. They’re going right up against the Super Bowl and that they were, their episode was gonna drop, you know the same time as the Super Bowl, because that was the regular schedule. But now it turns out that according to E News and elsewhere, The Last of Us will not be coming out at the same time as the Super Bowl. They’re actually going to make the next episode available two days early. Just to get, to not have to compete with the Super Bowl, but it will still air at the same time in like, the HBO lineup on cable, though, I’m sure just by everybody streaming it at this point. But anyway, it’s going to be coming out two days early, so they’re not up against the Super Bowl. Apparently, the show’s already been renewed for a second season, after becoming quote “HBO’s second largest debut ever falling just behind the Game of Thrones prequel House of Dragons.” But he is saying that there’s little chance that could actually compete with football’s big game.

Kai Ryssdal 

It’s supposed to be really, really good, but I’m still not watching.

Kimberly Adams 

I don’t know, I may have to give into this. I mean, I still want to watch. I wish I could watch The Walking Dead because I’ve heard really good things about that, as well

Kai Ryssdal 

Again zombies!

Kimberly Adams 

I’m afraid. It’s zombie man. And, and I think what bothers me the most about zombies is of all the sort of like, mythical fictional sort of horror movie tropes. It’s the one that feels the most realistic that it could actually like legit happen. This idea of like, some sort of disease or whatever that makes people do zombie-ish things. And, you know, I don’t know, it bothers me a great deal.

Kai Ryssdal 

Yeah, same.

Kimberly Adams 

So why don’t you do yours then I have a second one.

Kai Ryssdal 

So I don’t want to be all dorky and everything. But there was a an interview.

Kimberly Adams 

Yes you do.

Kai Ryssdal 

No, no, I really don’t. And here’s why. So Jay Powell, the chairman of the Fed, as you know, there was a meeting last week, the Fed announced their interest rate increase, blah, blah, blah. There were questions from the Washington press corps, the Federal Reserve press corps, etcetera, etcetera, et cetera, it was covered everywhere. Today, Powell did a sit down with the head of the Economic Club of Washington, DC. His name is David Rubenstein. He’s a bazillionaire. But he does these sit downs with Powell, like probably it’s like twice a week, twice a year, maybe maybe it’s once a year anyway. Always super interesting. I especially recommend this one. Because number one, it’s reasonably short. It’s like a half an hour. Number two Rubenstein style. And I don’t know if it’s Rubenstein or Rubensteen. Anyway, his style is really well suited to this environment, just chit chatting with Powell. Powell knows him. He’s comfortable with them. And it’s a really good explanation of what Powell is trying to do. What’s going on in the economy a little bit behind the scenes of the Fed, Powell is humanized, Rubenstein is asking good questions. It’s really interesting. They will put it out on a podcast and you can you can listen to it while like you’re doing the dishes or something. We’ll get it on the show page when we can but it’s super interesting, in a not at all geeky kind of way. And that’s why I’m recommending.

Kimberly Adams 

All right. I’ll go look at that. Yeah, um, well, while we’re recommending things I’m going to recommend, even though I know it’s challenging to find these days is every so often, it’s worth picking up a paper newspaper, for a variety of reasons. But also, because of the sort of the serendipity of news. I feel like I stumble across stories in the paper version of the newspaper that I would not find, you know, on the internet, either because it’s not curated, or it’s not going to drive clicks, but it’s still really interesting. So I was at my uncle’s house this weekend. And he had, sitting on his dining room table, a newspaper that his, you know, recently departed husband had delivered from his hometown in Maine, that they get in Maryland, right? And so he’s still getting it. But in this newspaper, was an article called, you know, the obligate “obligatory tomato”, which is about how all gardeners kind of grow tomatoes, whether you really like them or not, because it’s just the thing that gardeners do, and how this is the time of year that all gardeners really want to be like starting seeds indoors, and it’s just too early in most places. And you have to fight that urge. And I have I felt so very seen and targeted by that article. So I’ll share it in the show notes. But the actual link that I put in was a story that I came across in the Washington Post. And I was chuckling with Juan Carlos before the show because I had it in front of me in the newspaper, but I couldn’t find it on the website for the longest. Because it gets, it’s not ranked up as high. But anyway, it’s a story about something that has become near and dear to my heart over the last A couple of weeks, which is the “Buy Nothing” group. I have been, as Kai knows, in this massive decluttering effort over the last couple of weeks, and I’ve been posting unbelievable numbers of things on the local Buy Nothing group. And it’s this big article about how it’s astonishing the things that people will take when they’re free. And sort of the culture of these Buy Nothing groups, where there’s no expectation of barter, there’s no expectation of money exchange or anything. It’s people just giving stuff away, and how astonishing it is like the stuff that people will take. And I’ve been really surprised at things that I was ready to chuck in the garbage and someone’s like, “oh, no, I want to do a project with that.” Or, “yeah, I will totally take your rusted iron teapot, because I want to like redo it, and I love it” or “I needed a Swiffer anyway, and rather than buy one from the store and generate extra plastic, I’ll take yours.” And you know, it’s kind of cool. And anyway, it was a really interesting article, looking at Buy Nothing groups.

Kai Ryssdal 

That’s excellent. That’s really good and sustainable and all that good stuff. That’s very cool.

Kimberly Adams 

Yes. Okay. Those are the news fixes. Let us do the mailbag.

Mailbag 

Hi Kai and Kimberly. This is Godfrey from San Francisco. Jessie from Charleston, South Carolina. And I have a follow up question. It has me thinking and feeling a lot of things.

Kimberly Adams 

Okay, yesterday, we asked you to let us know what you thought about Biden skipping the State of the Union speech. Tonya in California emailed us saying she watches every year and used to make a drinking game out of it but says she feels too old for that now.  So. I am too old? Yeah. All right. And also Dominique wrote in and says, quote, this is the email, “I thought you might like to know that in 1801 President Thomas Jefferson broke with the tradition of delivering the State of the Union orally that was set by George Washington and every president afterward followed his example until Woodrow Wilson resumed the oral presentation of the SOTU in 1913.” I did not know that

Kai Ryssdal 

Among the many bad things that Woodrow Wilson did, that was one of them. I’m just saying, all right, Ray in Oregon, here:

Ray  

Last week, I heard Kai mentioned tiddlywinks, and I thought to myself, “I have not heard that word in a very long time.” Then I also thought to myself, “this is the information age, I wonder what Wikipedia has to say about tiddlywinks?” So I took a look. The wiki entry for tiddlywinks was huge and I found out the game was over 100 years old. What an amazing world we live in!

Kai Ryssdal 

Tiddlywinks sorry, I’m doing it now in real time.

Kimberly Adams 

I keep thinking of that… tiddlywinks. I keep thinking of that that, Sharon I suppose it is Sharon, Lois & Bram’s Elephant Show song.

Kai Ryssdal 

I don’t know.

Kimberly Adams 

God, it’s.. So first of all, I did not know that this was an actual game.

Kai Ryssdal 

Oh, yeah.

Kimberly Adams 

I’m looking at this now.

Kai Ryssdal 

I’m dating myself. I played tiddlywinks as a kid.

Kimberly Adams 

Okay. Yeah. Okay. No, don’t worry, there are there. Look, there are many things that would age any of us. So it’s and and what is old is will always become new. You might be the cause of the resurgence of tiddlywinks. Although I’m sure that the Gen Z years would come for a different come up with a different term for it. And then it would be a young thing like they’re bringing back accordion headbands, like the which I don’t know why. And it’s this type. Remember when I guess it was like the early 2000s Those headbands that were like stretchy and they were kind of zigzaggy

Kai Ryssdal 

Yes I do. They’re coming back?

Kimberly Adams 

So apparently those are there they’re coming back along with God help us all low rise jeans. And which I don’t know, given everything that womankind did to move past that phase why why we would voluntarily go back? Anywho before we go, we are going to leave you with this week’s answer to the make me smart question, which is “what is something you thought you knew but later found out you were wrong about?”

Kevin Fritz 

This is Kevin Fritz from Charlotte, North Carolina. Something I thought I knew and later found out I was wrong about is that the only non alcoholic beer available are the macro lagers that have been around for decades. I recently discovered that there are a bunch of non alcoholic craft beers available as well. Some are so good you can’t even tell that they’re non alcoholic. I find them great for rehydrating after a bike ride, relaxing at the end of a long day while still being sharp to play with my kids, and bringing to social events that you have to drive to. Between established brands and startups dedicated to non alcoholic craft beer, there are a lot of good options out there with trying. Happy tasting. Cheers!

Kai Ryssdal 

Yeah, that is definitely true. There are lots of options craft and otherwise that is that is for sure. True. You betcha.

Kimberly Adams 

Actually, one of the things that I got on the Buy Nothing group last week, were three cases of non alcoholic beer that I wanted to try, because I guess whoever had them didn’t like them. But I’ve got them sitting downstairs and I need to chill them and and and try them. But it’s from a local brewer, local craft breweries. And so I was like, “Yeah, you know, I’ll do the beer thing.” Yeah, I will. I will report back. But Kevin, send us your recommendations, specifically of which ones you like as well. We got to we maybe we need to make a list or something of all of our fave non alcoholic. What did we land on?

Kai Ryssdal 

Well, we disagree. You landed on cleverage. And I landed on zero proof cocktails.

Kimberly Adams 

I have I don’t feel like I’ve landed on anything. And like cleverage because I just think it’s cute, but I don’t know that it’s what I would say in public. So so I’m still processing. Okay. Yeah, so if there’s something that you’ve been wrong about lately, we want to know. Send us your answer to the make me smart question. Our number is 508- 827-6278 also known as 508-U-B-SMART! Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Our intern is Antonio Barreras. Today’s program was engineered by Juan Carlos Torrado with mixing by Charlton Thorp.

Kai Ryssdal 

Ben Tolliday and Daniel Ramirez composed our theme music. Our acting senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcasts. Francesca Levy is the executive director of Digital. And Marketplace’s Vice President and General Manager is Neal Scarbrough. There you have it.

Kimberly Adams 

Alright. Maybe I’ll try to a non-alcoholic beer for economics on tap this week.

Kai Ryssdal 

There you go.