Almost every tech platform is designed to grab your attention and never let it go. You give it clicks, and it gives you dopamine. Games, news updates, social media hits \u2014 they all run on the same logic. We can add a new activity to the list: gambling. In just a few years, sports betting has gone from a legal gray area to a mainstream multibillion-dollar industry.<\/p>\n
And this isn\u2019t just about sports. It\u2019s about how our economy increasingly exploits our cognitive biases and our irrationality, and how institutions \u2014 governments, media companies, even the sports leagues \u2014 have partnered in this system, because they all want a cut of the action.<\/p>\n
Jonathan Cohen is the author of Losing Big: America\u2019s Reckless Bet on Sports Gambling<\/a>. It\u2019s a new book about the financial infrastructures that we\u2019ve built on top of psychological vulnerabilities. I invited him onto The Gray Area<\/a> to talk about how this happened so fast, what online gambling shares with social media and crypto, and how destructive \u2014 on a human level \u2014 all of this has been.<\/p>\n As always, there\u2019s much more in the full podcast, so listen and follow The Gray Area<\/a> on Apple Podcasts<\/a>, Spotify<\/a>, Pandora<\/a>, or wherever you find podcasts. New episodes drop every Monday.<\/p>\n This interview has been edited for length and clarity.<\/p>\n Tell me about the 2018 Supreme Court case<\/a> that opened the floodgates for sports gambling seemingly overnight.<\/p>\n In 1992, the sports leagues went to Congress because of a threat, that was real at the time, of states legalizing sports gambling. And Congress passed a law called The Professional Amateur Sports Protection Act<\/a> that banned states from legalizing sports betting. And then, in 2018, the Supreme Court rendered PASPA, as it was called, unconstitutional on the grounds of basically states\u2019 rights. And so, starting in 2018 with the Supreme Court decision, states are allowed to legalize sports gambling if they so choose.<\/p>\n How many states have chosen to do it? And how quickly?<\/p>\n Delaware did within six weeks. Today, as we\u2019re talking in July of 2025, we have 38 states and Washington, DC, with legal sports gambling; 30 with online legal sports gambling; probably soon to be 39 and 31 later this year with Missouri<\/a>.<\/p>\n FanDuel and DraftKings are the names almost everyone knows. How much of the pie do they control?<\/p>\n A lot. Those are the major players, almost to the point of a duopoly, defining the industry. And they have, I would say, around 80 percent, maybe 85 percent of market share. And of course it depends on some states. There are lots of other companies out there fighting for third, fourth, fifth place.<\/p>\n What happened to online gambling during the COVID era?<\/p>\n It takes off politically in places like New York<\/a> because of the fiscal crunch faced by states. And this isn\u2019t a new thing. It goes back to the lottery, and even during the Great Depression<\/a>, when slot machines were legalized in four states because they needed the revenue.<\/p>\n Lawmakers have this belief that there\u2019s always more money in the gambling cookie jar. Oh, we need money. Let\u2019s just legalize more forms of gambling, and that will make up for our revenue shortfalls. Politically, that\u2019s exactly what happens during COVID in places like New York and in other states.<\/p>\n But to your point about COVID, we have a lot of people sitting on their couches and a lot of professional sports are starting to come back. And lo and behold, there\u2019s a new app on their phone where they can legally, seamlessly, frictionlessly gamble. So you can imagine the way the industry grows its market share and grows its foothold in that time.<\/p>\n The gambling companies promise the states all this easy revenue, and they go all in. How does that bet work out for them?<\/p>\n This is what\u2019s tough about gambling in general and sports betting in particular. In most cases, it actually has met expectations if you were the fiscally responsible person who is reading the budget projections. But the question is at what cost?<\/p>\n Let\u2019s talk about the cost, especially the human cost. <\/p>\n You open the book with this story about a young guy named Kyle whose life was completely ripped apart. Why did you start there? What does his story capture about these gambling apps and how they\u2019re designed?<\/p>\n I thought Kyle was emblematic of what\u2019s happened here. He\u2019s a 26-year-old white guy who ran into trouble gambling on sports, but then even more specifically because he was someone who had gambled before sports betting went live but had never run into trouble until it appeared on his phone. But he was just really excited for sports. He was a sports fan, and he started betting pretty quickly.<\/p>\n At some point, I don\u2019t know when his personal tipping point came, but it came, and gambling went from being something he did as part of his life to being basically his entire life. He wasn\u2019t going out; he wasn\u2019t hanging out with friends. He was just gambling. It was so instantly accessible to him. That was all he was doing. And he was drinking, he was smoking more because he was so stressed out from his gambling. He falls behind on his rent. His dad has to bail him out. Things go very badly very quickly.<\/p>\n To paint a picture: Kyle was making $65,000 a year, and at one point, he wagered close to $93,000 on bets in a single month. Eventually, he gets fired. He goes on unemployment, and then blows all the unemployment money on betting. And then he moves back in with his parents. <\/p>\n Yeah. I picked him because he is a young man, and this is the demographic it\u2019s happening to. It completely interrupted his life. There\u2019s a black hole in his life for two or three years, where he was consumed by gambling and the stress from gambling and the financial and mental health deterioration wrought by gambling.<\/p>\n Why are young men in particular so vulnerable to this?<\/p>\n First of all, young men are not exactly known for being judicious and careful, especially when it comes to money. They don\u2019t have great impulse control. You could already imagine how that would set them up poorly for something like this.<\/p>\n They\u2019re also \u2014 and I\u2019ll speak for myself as a formerly young male sports fan \u2014 overconfident about their knowledge of sports. Sports gambling companies absolutely take advantage of this. There\u2019s a FanDuel ad saying something like \u201cnever waste a hunch,\u201d challenging you to prove that you \u201cknow ball\u201d by betting on your hunches.<\/p>\n Young men want to prove to their friends [and] to talk show radio hosts that they know ball, and gambling is presented as a way for them to do so.<\/p>\n And then [there is] \u201cfinancial nihilism\u201d among young people and young men in particular. Many young men have disposable income, [but it\u2019s] maybe not so much that they\u2019re ever going to realistically buy a house or pay off their student loan or start a business. So they might as well gamble.<\/p>\n Whether it\u2019s on sports betting, whether it\u2019s on crypto, whether it\u2019s on stock markets, whether it\u2019s on video game skins \u2014 it\u2019s not worth having $10,000 in their pocket. It\u2019s worth having a chance at $100,000 or a million dollars. And they\u2019re willing, as a result, to gamble and gamble more and gamble in riskier ways than they otherwise would.<\/p>\n What percentage of the industry\u2019s revenue comes from the Kyles of the world? Not the pros or high rollers \u2014 regular working people who are addicted to gambling?<\/p>\n