Nobody wants, seriously, find me someone who thinks, yeah, you know what? We should let Marlboro advertise during Sesame Street.

you're spot on.

Like this is the, this is where it lives.

This tension is where it's all about.

And like, it's like these addictive products where like a small number of people account for like such a large share of revenue is really tricky, right? Like that's why for me, VIP is like really interesting.

I'd be actually curious about your thoughts on like VIP, because on the one hand there are, and have always been like true whales, right? Like, and when you talk to the old industry guys, like from Vegas, they'll tell you like fun stories about like, knowing the guys coming in, flying them out, you know, giving them $25,000 for credit, maybe letting them do $10,000 more, then buying them a dinner, comping his room and trying to tuck them in.

And if they see him getting to the line, the cab line to go over to the Bellagio, they call their sort of like counterparty over there.

You shouldn't be allowed to graduate high school without knowing, you know, why parlays seem so easy, but are not, you

Was part of your strategy like, I'm going to do all of the sort of problem gambling things that problem gamblers do.

Yeah, correct.

So for the first week of my betting, I was totally unremarkable, right? I was a just for fun, 20 bucks here, 30 bucks there.

I was just a, you know, I'm in New York.

The Knicks were just starting the playoffs.

You know, the Yankees, my kid loves the Yankees.

So I was just sort of building my profile of a New York super fan just for fun.

And

Not the same kind of gambling as prediction markets, but do you see similar risks across these different platforms? Are they operating under similar legal frameworks?

Right.

So in 2018, the Supreme Court sort of paved the way for states to legalize.

39 states in DC have.

And literally, as I'm doing this experiment, what you're talking about, these prediction markets sort of become version 2.0.

They claim not to be gambling, right? They are trading.

They believe that they are governed by a different regulator, a federal regulator, that these are sort of swaps like commodities, futures.

But is it like in the app? Is it does it feel like, you know, the Instagram algorithm or like it's continuing to sort of pull somebody in? Does it feel like nefarious when you're in there as from your perspective?

It doesn't always work, right? But what were you trying to learn about how these apps work? What gave you this idea?

Yeah, this was an all-time pitch, I should say, and I'm happy my bosses went for it.

But look, I mean, as you say, sports gambling, betting on sports is ubiquitous.

You can't watch TV.

You can't go to a game without seeing the advertisements.

So we wanted to know more about the business, its ubiquity, and the potential harmful side effects by using the product.

And the industry points to what they call responsible gaming as sort of being their safety net system, their guardrails, because while they obviously are... seeking to generate revenue and maximize profit, they don't want to build, they say, their business on the backs of addicts.

Not the same kind of gambling as prediction markets, but do you see similar risks across these different platforms? Are they operating under similar legal frameworks?

How much were you betting, and I, and I guess more importantly, how much were you losing?

I'll give you all the figures.

So, so net loss, uh, to the company was $10,700.

I had $22,000 at my disposal for this experiment, and there were upswings and downswings.

Um, but something I learned over the course of doing this reporting from my, um, experts, it, it's not just about the net loss.

It's the pattern of the bets.

So for example, I would often do what's called loss chasing.

What did these sports books have to say when you brought them your reporting and raised the concerns that came up?

How much were you betting? And I, and I guess more importantly, how much were you losing?

I'll give you all the figures.

So, so net loss, uh, to the company was $10,700.

I had $22,000 at my disposal for this experiment, and there were upswings and downswings.

Um, but something I learned over the course of doing this reporting from my, um, experts, it, it's not just about the net loss.

It's the pattern of the bets.

So for example, I would often do what's called loss chasing.

What did these sportsbooks have to say when you brought them your reporting and raised the concerns that came up?

Did you ever have a moment, was there ever a time that DraftKings said, "Stop this"?

Yeah.

So you're exactly right.

I, I, I did exactly that.

I sort of continued the escalation trajectory.

I switched to random sports.

I played late at night.

So after all of this reporting, after this lengthy experiment, um, and talking to so many experts across the board, are there consumer protections that need to be increased? What's your take on this? Are there laws that need to be created? Are there laws that need to be enforced better? What's going on?

Walk us through your experience, what you learned about DraftKings.

Well, thanks for having me.

I mean, the premise of this whole project was to, in as controlled a way as we could, simulate and emulate the betting behaviors of somebody who is really problematic, who couldn't control themselves on the app.

And I wasn't just winging it.

I had sort of a panel of advisors, you know, recovering addicts, addiction specialists, actually sharp bettors, pro sports bettors.

Wow.

who were sort of counseling me on what I should do or what would be the most accurate depiction on the app of somebody who was really struggling with this stuff.

So so what has their response been? I know they gave you an interview.

But as I read your piece, the ratio of bet more was much higher than the slow down.

Yeah, obviously the sports betting, online sports betting is ubiquitous.

The ads are everywhere.

Survey after survey tells us that more people are betting than ever.

And the industry has presented what they call responsible gaming as the way to put some safety net system in place, sort of guardrails to exactly, as you say, keep tabs on users and make sure nobody goes off the deep end.

So this...

This experiment, this sort of reporting project, was meant to sort of test that system to see what would happen in real life in sort of a controlled way, faced with somebody who was waving all the red flags of a problem gambling, based just off the betting behavior, just off the patterns of the betting.

So for the audience's benefit, Jake, what are the red flag behaviors?