Alycia: If you are around my age and I'm 31, you probably know someone who is fairly deeply involved on the online sports betting space. And I think that there's a lot of these platforms that are popping up now that are meant to extract from our population, particularly our population of young men. And young men, I'm talking to you when I say this, but I think it's getting a little bit out of hand. So that's what I want to talk about today on this episode is the sports betting, the prediction markets and how all of that is kind of I won't say built to extract and distract, but that's kind of what it looks like to me as someone who is not involved in those types of activities. So I'm Alycia, your host, of course, and welcome back to Fathom There have been a couple of scandals that have popped up in the last call it six months around the online betting space. So not just sports betting, where you have athletes who are they're betting on their own sport, right? They're betting on their own outcomes and then they are changing those outcomes. You've seen a couple of those stories. You've also seen stories around these markets that are not sports betting. They're prediction markets. And some of them are binary, where they're saying, I'm gonna bet $100 that Donald Trump says this particular thing. Five times in his speech on this day, right? And so like you have a binary outcome. He either does that thing and you win money, or he doesn't do that thing and you lose money. Now, one of the scandals that come up that came up recently is about Gabriel Perez, who is Trump's longtime teleprompter operator. And he made over $100,000 on Kalshi which is one of the betting markets that I'm talking about, the prediction markets, betting on specific words and phrases that Trump would say in speeches. And you can see how if you're a person and you have this script. In advance for a presidential speech, how you could like successfully make a bet for or against certain words being said. So that's one example. The second example is Ganon, I don't know how to say his name correctly, but Ganon Ken Van Dyck, who's a special ops soldier on the Maduro capture team. So don't know if you guys remember, but some months back, the United States went into Venezuela, just went and snatched up the president and brought him back here. Now, one of the guys on that operation, Excuse the interruption here, I have been advised to say supposedly on this next part. Thank you very much for listening. he won roughly $400,000. using classified knowledge about that raid, about that operation before it happened. And I think this is something where we we now technically these betting markets, these are regulated things, and but it only works and you can only make the argument that these types of platform even have any sliver of benefit if you assume that there is informational integrity, right? No one's making bets on the information that only they have, because that would not really be a fair betting market. To the extent that this is actually a fair space. Now, let's go into the details and the history behind sports betting, because sports betting was the original thing to pop up. And then it was these prediction markets, so your Kalshis and your poly markets. These are the ones that is kind of developing. And the ones that I actually think are particularly, I don't want to say nefarious. Nefarious is not the right word for it, but they could be construed as nefarious from a conspiratorial-minded perspective. So let's go through the history here. Now, how it got legal. So it sports betting was actually illegal from nineteen ninety-two to twenty eighteen. You guys are gonna have to forgive me as I look down at my notes because I'm not great with dates in particular. I don't wanna get things things wrong here. So I've got show notes. but we have the Professional and Amateur Sports Protection Act, which was a federal ban on sports betting throughout that period of time. In 2019, the Supreme Court struck that down and said that no, that infringes on the state's rights to legalize Sports betting. And so that's what they started to do almost immediately. New Jersey was live within a month of that regulation being struck down. And now most of the states allow some version of sports betting. Now, why do they allow sports betting would be the question. I think there's a couple reasons. So, number one, it's fun. You men seem to think that this is a fun thing to do. It's to even though you're probably gonna lose statistically, you're almost certainly going to lose. People think it's fun to bet on sports. the second thing is that it generates a certain tax dollar value for the states that are allowing this type of activity now. Same as any other thing. So since we they repealed, since the the Supreme Court struck down that law in 2018, there have been over $300 billion in regulated sports beds. And the state and governments took in roughly $2 billion of that as tax revenue. Okay, so that's what the governments have made. So there's a really there is a real dollar value associated with the betting markets now, and it is not insignificant. And it's only growing. and I think that that is something that we really need to examine here as a society. And I granted, I am a woman, I've got plenty of valuable things in my life. I have things that I'm growing and things that I'm really interested in doing, and like I have a lot of intellectual stimulation on a daily basis. I think the people that trend towards these betting markets. I don't want to generalize, but may not have as directed of energy as I have. So I am an outsider speaking about this. But I think that this isn't an industry that's growing and we need to keep it a watch on it. Now, the prediction markets, separate to sports betting. So sports betting, I forget the big one, DraftKings, I think is the big one there. And drop it in the comments if I'm wrong, because I don't really care about that part. But there's different platforms to bet on sports games, right? And theoretically, you are not supposed to be an athlete betting on your own sport. Because that is a bastardization of the free market betting that's supposed to be happening, right? The gambling nature of it. you are seeing that and you're seeing people get it actively caught up in that because they're addicted to gambling and then they're betting on their own sports to make money and then they're perpetual loss. It's a whole thing, right? So there's one of those stories I think is actually kind sad, like genuinely sad, right? People that are losing their whole livelihoods over this thing that they cannot get out of because it is an addiction. so outside of the sports betting, you have these prediction markets. The biggest one. Far as I know. It's called Calchi. Now, Kalshi was founded by two very young people. So Tarek Mansoor and Luana Lopez Lara. Both were 29, at least when I pulled this statistic, both are not billionaires, right? And I think the the girl, Luana, she's the youngest quote unquote self-made female billionaire in the world, I think. she hit that mark, right? Because Kalshi got so big so fast. Now it's valued at $22 billion with more than five million users. 75% of those users are men, and 25% of those users are women. And the interesting thing thing about that is that Kalshi has doubled its women, its female percentage in a really quick time frame. So it was a vast majority men, and now they're starting to push the tide. And women now, we seem to be joining the Kalshi betting game. So we'll have a separate discussion about that at the end of the episode. But Kalchi, they spent the first two years pre-launch getting approval. So they're now they're the first regulated prediction market exchange in the United States. And the product really you've got binary contracts. So it's a yes or a no that this particular thing happened. You can get really specific on on these particular like, did it rain at th was it raining at three o'clock in Memphis, Tennessee, yesterday, right? Like at on a certain date. You can get very specific, but these are binary outcomes and people can take bets on them if they want. And if I had to play the steel man, right, like the say that why could this ever possibly be s construed as valuable for our society, it would be that theoretically, like when you look at the markets, the stock market, stock exchange, that the people who are investing in mass, right? So you have a ton of people, thousands, hundreds of thousands of people who are putting small dollar bets up on the stock market or on Kalshi or on poly market. Theoretically, the dollar value of the masses, those bets that are being made, is more accurate. than other sources of information. And that I think holds true where the the prediction markets, the betting markets, are going to be more accurate than your people like your pundits or your people that do polling, those types of companies. So that may stand as somewhat true. I think overall it's a net negative. Like I don't know that when people are taking bets on whether or not it's going to rain tomorrow at 2 p.m Eastern time in a particular zip code. I don't think that that is a particularly valuable piece of information. I think some of the bets that get interesting are the ones where they're betting on political activity, some of the ones where they're betting on movement of certain companies. So whether or not Tim Cook was going to retire or step down. And like there's I I think there's certain markets that are interesting for people who might be interested in those things. To take monetary bets on them. However, I don't see why. It would be necessary. So I'll just I'll just leave that there for now. Now, the nature of these products, the sports betting products and the prediction markets, they are very similar to your social media feeds almost, where you have a constant stream of dopamine, like you're it's it's generating chemicals for your brain, your very primitive brain, on a certain low or high frequency cadence. That's kind of how these these products are built. And that is also why they are so addictive. And they're particularly addictive to young men. Young men, y'all seem to be the ones that are getting roped into these and unable to pull yourselves back from them. And that is the part that I actually find genuinely really, really concerning. Now, the people the when it comes to economics, the people who are actually on these platforms, again, are largely male. on Kalshi, you have 75% of you active users that are male, 25% that are female. And the notable part about the 25% though is they they doubled that percentage, went from 13% to 25% in the span of a year. So they did something there that might be worth looking into. Maybe they're betting on Love Island, which girls, we also please, I'm begging you to stop watching it. I'm literally, please putting that aside. 48% of American men aged 18 to 49 have an active online sportsbook account. And this is according to the Sienna poll. The other thing that I'm gonna try to do here is put all of the links for this data in the description, in the show notes. So if you wanna go down and look through all of these links to verify, by all means do that. but 48% of the men, 18 to 49, have a sports sportsbook betting account. 58, 54% of betters place bets at least once or twice a week. 58% of 18 to 22 year olds had bet on sports in the past. And that and I think if if you just think about like the perspective on that, that is a wild percentage. That is a wild percentage of young men who are now taking up this activity to bet money that they do not have. It's not like they're rolling in dollars and discretionary income. To go ahead and start betting this money. It's like they're doing it for fun and entertainment and distraction, is what's happening. And 58% of them have done this. And even in that teeny sliver of in age range. Additional stats for you. Because I've got a whole list of them to make my argument. Okay. Three to five percent, only three to five percent of sports betters are actually profitable over a year. 95 to 97% of them. are going to lose money in the long term. So the vast when I say you the vast majority of you guys are going to lose money on these platforms, that's just the statistics. Okay. That's just the house always wins. Because the house is always going to win. That is the nature of betting. You don't you are not going to win if you place bets. The house is going to win, which means the platforms are going to win. And your average American male who's deciding to bet on these platforms, he is going to lose. Now the motivations to play in the betting gambling games, right? I think the least depressing version of that is that people are bored, right? Young men are bored and they want something to do. They want to go you know, play, enjoy themselves, right? It's for entertainment. You might say that. I think the larger underlying trends, as we look at these underlying currents. I think a lot of people are placing bets. A lot of men are placing bets because they are hoping that they get lucky. They're going to the casino in need of cash, right? Basically, is like is what's happening. And I don't think that that is healthy. I think it's a very unproductive outlet for what they see as a lack of an lack of ability to get ahead in today's day and age. And they're doing it for distraction. So even if it's just entertainment. They're trying to distract from other underlying hopelessness. And the age bracket, it actually comes up here for me, just because we at like I've hired interns, we have had a lot of interns that have come on and then had to go because they can't do the work that we have is required of them. And something about this younger generation, it seems like they are really truly hopeless. not they themselves are hopeless, but they feel. Hopeless. And I get the sense that they don't really feel like anything is going to go in their favor from here forward. I know that we are just coming up on new generations that are less literate than their previous generations. That's never happened before in history, I think. Well, in a timeline of history that we are cognizant of. And they also look at so the the two examples that I gave, the teleprompter guy and the special ops guy who made those bets, both of them are at least one of them is being prosecute it now. I think he the the special ops guy. The other one, the teleprompter guy, he didn't win that that much money. He made like a hundred grand. And he is not, I think they're settling out with him in s in some fashion. But they look at that and they say like this hypocrisy is unreal. It's unreal because if you look at Congress and the way that Congress, like you're not supposed to in j in any of our markets, right? Stock market or otherwise, you're not supposed to be making in investing money, making bets, as I like to call it. on insider information, at least in the public exchanges. Okay, you're not supposed to be doing that. Now, if you look at accounts like Unusual Whales, Unusual Ways is a great one. They track Congress people's trading activity. And you would be surprised to see that there are a fair number of examples of unusual bets that have been taken, unusual trades that have happened within our Congress, within the Senate, around You know, particular events before they've happened, though not after. I mean, sure there's stuff after, but they're the before they've happened. There seems like there's people that are on committees that happen to be making the policy and also taking bets, making investments based on the policy that they themselves have made. Now, I can draw an additional tangent, if you like, to the Trump administration. And Trump just gave us there was like the financial disclosure, whatever that was, and the vast majority of the billions in income that Trump has made has come from crypto. Some say people some people say crypto scams. I don't say crypto scams because I've not actually looked into it and I don't want to give you guys bad information, but it's from crypto. And if you look at what he's doing in the crypto space, what his family is doing in the crypto space, he is also on the flip side of that controlling the policy, championing the policy, and also the repercussions of that policy, to his own benefit. So I think young men see a lot of these things. It's not like they're blind, it's not like they're stupid. They see these things. And they question, okay, if the system itself has no integrity, then maybe all I can do is just attempt to get ahead this one time. And I think that is more what we're seeing than the they just want entertainment side of it. I think they look at our current system and how the policy makers are the ones that are benefiting from the policy that they then create in a financial fashion, also known as corruption. Like there's a word for that, it's called corruption. They look at that and that feels really hopeless because this has been the same system that has been in place for the last 50 years, right? We have Congress people who are well into their 80s working on the same playbooks that they have been working on. It's not as if this is a new thing. I think the level of corruption and like the the public nature of it that has gotten a lot more It seems to be getting a lot more well known. Like people are looking at it a little bit more and diving into it a little bit more. But this has always been the system. This has always been the system. I don't know if there was a point at which America was an actual democracy rather than an oligarchy, which is what we kind of have now. But I I think that the general public, young men, are not stupid. And their outlet is looks like gambling because they're trying to find a way in a hopeless scenario. to just like, what if I get lucky one time, maybe I'll make a hundred grand and then that hundred grand I'll go make some investments. Like they're trying to find a way out. It's not directed properly and it's not productive. And I think it is largely a way that they're just yet another way that big corporations are going to continue to extract from that population of of men in America. So I think the takeaway from this episode, if it makes it through, because I had a camera snafu right in the middle, is that if you're on the betting markets, okay, if you're on the betting markets, the house will always win. It is not a productive use of your time, it is not a productive use of your money. It's also largely not good for society to not have any other outlet or any other way that people think that they can get ahead. Because it seems to a lot of young men, and I'm just talking to I'm not a young man, obviously, but the young men of today. In America, like you're the you're they're in a hopeless situation. What feels like a hopeless situation, it may or may not be actually hopeless. Like you could ba debate that all day, whether or not they actually have opportunity to do better than their parents did, whether or not the boomers are locked up on the on the Capitol and now the houses you get like I think there's a lot of discussion to be had around that, and we will have those discussions. But at a baseline from what people are feeling, that population of guys doesn't feel like they can get ahead. And so they're turning to these things, these outlets that have recently been made legal. Right in 2018, which is strange timing, if you ask me. and all of a sudden, okay, well, here's yet another distraction for you. Here's yet another way you can try to, you know, incentivize your brain to just keep going one more day, right? Keep going one more day. It's a little bit of dopamine, may place another bet, right? Do another follow another person on social media that's gonna try to give you the answers for what you buy another little digital course thing, right? And all of this is being offered to the public as a solution or as an outlet. And there I don't think it's a coincidence that the uptick, the $300 billion that have been bet on sports over the last eight years, is also the point in time where our politics is getting particularly tumultuous. There's like a there's a ton going on in politics, geopolitics, and the violent nature of the events over the last like three years, I think that that's another thing. It's just here's more distraction. Here's more distraction, more ways to not think about how shitty your life probably is and how much groceries cost and how much your utilities bills are and the fact that you can't pay your credit card bill because now you've been outstanding running on credit cards for the last 12 months, your credit is getting absolutely fucked. Like I I think it's just another way for us to distract ourselves. So on that happy note, thank you. Again, for spending your time with me. Of course, if you decide to subscribe, I appreciate you. And please share this video with a friend if you have a friend who is a participant in the gambling markets. I'm Alycia and this is Fathom