The story behind the sports betting boom
DAVE DAVIES, HOST:
This is FRESH AIR. I'm Dave Davies, in for Terry Gross. If you watch TV, especially if you watch sports, you've no doubt seen ads like this lately.
(SOUNDBITE OF ARCHIVED RECORDING)
JAMIE FOXX: You want to make every game interesting? Step one - open the BetMGM sportsbook. Step two - put some skin in the game. And step three - showtime.
DAVIES: That's Jamie Foxx, one of a host of celebrities appearing in ads promoting online sports betting. Just four years ago, it was illegal to gamble on sports most places in the United States. Today, it seems it's everywhere. A recent series in The New York Times noted that the availability of online sports betting has spurred the fastest expansion of legalized gambling in American history. Our guest today, New York Times investigative reporter Eric Lipton, worked with a team of Times reporters to examine the explosion of sports betting, the court battles and lobbying campaigns that led to its legalization, the favorable terms and light regulatory touch that many states bestowed upon gambling operators, the partnerships that betting companies have struck with sports leagues, universities and media organizations, and the impact of sports betting on problem gamblers, Native American tribes and others.
Eric Lipton is an investigative reporter for The New York Times based in Washington. He's a three-time winner of the Pulitzer Prize for Explanatory Reporting, Investigative Reporting and as part of a team for Foreign Reporting. You can find the Times series, titled "A Risky Wager," on the Times website. Eric Lipton, welcome back to FRESH AIR.
ERIC LIPTON: Thank you.
DAVIES: You know, five years ago, as I said, you know, sports betting was banned under federal law, except in, you know, Nevada casinos and a handful of other places. And the sports leagues had long said, we don't want gambling involved with sports because we need to protect the integrity of the games, right?
LIPTON: That's right. For, you know, going back to Pete Rose or all the way back to, you know, a century ago, when there was a, you know, belief that, in fact, a World Series game was thrown because of the intervention of betting, there was a perception that if you allowed betting around sports, that it was going to corrupt the game. And it was something that - it was really, you know, just an area that professional sports leagues stayed away from with incredible intensity and punished anyone like Pete Rose and banished him from the sport if a player or a coach participated in betting illegally.
DAVIES: So how did it get reversed?
LIPTON: It was really a long road that started with the movement to legalize what they call daily fantasy sports, which became quite popular in the United States. And the people who were behind that daily fantasy sports from early on saw that this was potentially a way, if you could get daily fantasy sports, which was essentially betting around fantasy games that were not, you know, live, real players, if you could get that legalized in a bunch of states, it was only then one step away from going back to the same state legislatures and arguing, can we legalize real sports betting? So it started with, you know, FanDuel and DraftKings moving from state to state, getting legal authority to have daily fantasy sports, and then a separate - a legal action in the courts to challenge that long-standing federal law that prohibited betting on live sports.
DAVIES: Yeah. Maybe we should just take a moment and explain what fantasy sports are. Not everybody knows.
LIPTON: Essentially, as a player, you pick your own team. And you assemble a group of players. And then it's a - you - there are other people who are playing. And the game kind of plays out based on a group of people who have imaginary teams. And you place bets on whether or not you're going to win or lose. And so a lot of the the skill in daily fantasy sports comes with your assembly of different players who you believe are most likely to win.
DAVIES: Right. And we should note that the players that you assemble are actually real athletes that have real performance records. And you assemble your own imaginary team based on these athletes. And then the wins and losses depend on how those actual real athletes perform that week. It's a weird kind of thing. It's something in between betting on sports and a game of chance, kind of, isn't it?
LIPTON: Yeah. And it became extremely popular because it was using your cellphone to game on a - in a way that had never previously been used as intensively. The mobile phone, the ability to use a mobile phone as a betting application in a legally sanctioned betting venue is sort of, like, the Uber-ization (ph) of gambling took place through daily fantasy sports. And to some extent, the old brick and mortar gambling folks were looking at that and saying, wait a minute, you know, look at the way that this technology is potentially bringing us new customers. We've got to get into this, and we've got to bring sports on - live sports - as part of this.
DAVIES: So New Jersey wants to shore up Atlantic City casinos, many of which were struggling. And they bring a lawsuit. And the Supreme Court says, yeah, you can't ban sports betting. What was the court's logic?
LIPTON: The court's logic was that, how can you allow one state like Nevada to have sports betting but then say other states can't have it? It's an unconstitutional treatment of the individual states' rights. And it was an argument that had been contemplated for a long time. But it really took New Jersey's deciding to say, forget about it, we're going to go all the way with this. And it was Chris Christie who was - then was the governor who was willing to lose repeatedly in lower courts and had, you know, a legal team that was, you know, pretty experienced in the federal appeals court. And they took it all the way. And they won. And as it was coming to a close, this court fight, it became apparent that the Supreme Court was sort of siding with the argument that New Jersey was making. And it was at that point that the professional sports leagues began to, you know, line up with FanDuel and DraftKings and began to move more aggressively to embrace the notion that - you know what? - if sports betting is going to be legalized, we want to be part of this.
DAVIES: Yeah. Fanduel and DraftKings are two of the bigger sports betting operations. Yeah. It is fascinating that the sports leagues, which had for so long said we can't have gambling in our sports, it's going to undermine the integrity of the games, quickly got on board. They stood to make money here or what?
LIPTON: It was fascinating because, you know, they were - their having participated in the Supreme Court legal battle and arguing in the court that this was going to undermine the integrity of professional sports, and at the same time, behind the scenes, they were negotiating an agreement with the lobbyists that work with FanDuel and DraftKings to join a partnership to begin to legalize sports betting. So they were, you know, before the Supreme Court, when they - essentially, it became clear where the Supreme Court was headed. They were already switching sides and embracing it. And if there was money to be made, that they wanted to be a part of that money making venture. And they also, you know, the argument they make is that they also wanted to help set the terms of how sports betting was going to be legalized across the United States in addition to potentially profiting from it.
DAVIES: Right. So the Supreme Court decision didn't make it legal everywhere. It gave states the right to legalize it. And, of course, the fact that we now have, you know, smartphones meant that if you could place sports bets online, it would change the whole game. You have a casino in your pocket, in effect. But one thing that always puzzled me is if one state, say Pennsylvania, has legal online sports betting, can someone who lives in a state where it is still banned use that app to bet on sports? Does it, in effect, nationalize this?
LIPTON: No, it doesn't. And again, the technology, the explosive growth of sports betting in the United States - most of it is happening on mobile phones - is really only possible because of the rapid transformation of, you know, Uber and Yelp and, you know, the way that technology has changed cellular phones. And that's because every time you place a bet, a sports bet, any place in the United States, there is software application behind that. GeoComply is the contractor that does this, which actually sees - geolocates your exact location, even what side of the street that you're on, you know, because if, like, in Washington, D.C. - if you're in a national park in Washington, D.C., in Rock Creek Park or in any - you can't bet on that land. But if you're in D.C. proper and not in the federal lands, then you can bet.
So GeoComply is seeing that ping at every bet that you make, and it is - within a millisecond, it is authorizing that bet and allowing it to go through, or it is denying that bet. So if you - that's why there were people who were crossing the George Washington Bridge to bet in New Jersey. At the time before New York state legalized betting, people would just go across the bridge because GeoComply and other contractors were determining their exact location with incredible precision that allowed you to bet. And that's - each state and each operator relies on a contractor that is confirming the location of the better.
DAVIES: We need to take a break here. Let me reintroduce you. We are speaking with Eric Lipton. He's an investigative reporter for The New York Times. He worked with a team of Times reporters on a series of stories about the sports betting boom in the United States. It's titled "A Risky Wager," and it's available online. He'll be back to talk more in a moment. This is FRESH AIR.
(SOUNDBITE OF DAN AUERBACH SONG, "HEARTBROKEN, IN DISREPAIR")
DAVIES: This is FRESH AIR. And we're speaking with Eric Lipton. He's an investigative reporter for The New York Times. He worked with a team of reporters from the paper on a series of stories about sports betting in the United States. It's titled "A Risky Wager."
So when the federal ban on sports betting was overturned, it meant that every state could legalize it, or decline to, and write their own rules for it, which meant, boy, that was a lobbying opportunity for a lot of people in that business. And you wrote a lengthy story about that. You focused on Kansas, but other states as well. How did you get information about this? I mean, lobbyists do their business privately, a lot of it.
LIPTON: Right. Well, right now, approximately half of the people in the United States live in states where you can legally bet. There's 33 states where there is - sports betting has been legalized. And 24 of those states, you can bet on your phone, mobile betting. And so, you know, every year - right now, for example, it's in Texas and in Missouri - you know, there are debates going on. Georgia debated it, but it failed. So every year there are different states where essentially the debate is live as to whether or not they're going to legalize it. It's a bit of a crapshoot for me as a reporter picking the states - which ones to focus on.
So I ended up picking Missouri and Kansas, and I was just shuttling between, you know, Jefferson City and Topeka, driving back and forth between the two capitals and just embedding myself inside the Capitols, standing there in the rotundas and just watching like a planter, watching them - you know, the lobbyists work their magic. And I spent many, many hours just standing there and observing them and getting to know all the lobbyists and watching them, you know, work the various legislators as they were trying to get their language into the bills.
DAVIES: Right. And eventually, there are some lobbying reports and campaign finance reports that help you flesh things out. You know, you open that story with an anecdote about a state representative with an expensive cigar and some aged Irish whiskey. Tell us about what was going on here.
LIPTON: This was just before Kansas was going to legalize sports betting. It was just two days before, and the bills were lined up to be passed. And this was the chairman of the House committee in Kansas that - he was the sponsor of the legislation. And two of the lobbyists that were the lead sponsors of - you know, the lead advocates of this bill had a reception, you know, a few blocks from the Capitol - cigars, cars and bars. And it was - you know, many legislators were there, but as I walked in, I saw the chairman of this House committee that was a sponsor of the bill who, you know, had this cigar in his hand and the whiskey in the other hand and big smile on his face and was walking around so proud of the fact that this special whiskey had been procured for him.
And, you know, that was the - and he was - he told me while I was in there, you know, just walking around, you know, saying hello to the various lobbyists and lawmakers that I'd met, that he actually inserted a provision into the legislation to benefit the sponsor of this event that was going to give his client, you know, more access to the sports betting in the state. And so it was very transactional. And the - in Kansas, the lobbyists were able to get a lower tax rate. They were able to get a provision in the law that allowed them to give out millions of dollars of free bets that they were not going to be taxed on. They got a small amount of money set aside for problem gambling prevention, and they also got - most of the money was - 80% of the money was - that was made in taxes was going to go to help build a new sports stadium for professional teams. So there was very little money that was actually going to go to the general fund to benefit the residents of Kansas themselves.
DAVIES: Right. There's a photo of you at this event along with these folks. Did the lobbyists and the legislators - I mean, they knew you're from The New York Times. I mean, you didn't hide your identity, right? Did they say, what? Wait a minute. How does this guy get in here?
LIPTON: Yeah, I just showed up. I mean, I was in the Capitol, and I saw a bunch of the lobbyists and lawmakers were, like, rushing for the door. And it was clear that they still had many more hours of debate on legislation that night. And I asked one of the aides where they were going, and she gave me a copy of the invitation, and I just showed up. And we went with our photographer, and the photographer was taking photos. And at one point, the lobbyist who was the main organizer of the event came over and asked me if we could stop taking pictures, and I said, sure. You know, I mean, I think part of the issue here is that they were all very nice people, and it's - the club of lobbyists and lawmakers is a very small club in many of these state capitals. They all know each other extremely well. Many of the lobbyists are former lawmakers themselves. And there aren't - there are not many local reporters left, and there's not many - you know, and the reporters that are there are covering the bills that are passing, and they're not stepping back and spending, you know, weeks like we did on one story. And so they just weren't - they were not really thinking that someone was observing them the way that I was.
DAVIES: You know, I would commend the story to people because there's a lot of detail here that we don't have a lot of - all the time to get into. But there were, you know, amendments inserted into the bill at the eleventh hour that helped the gambling industry as well as some specific real estate interests. And you identify all the folks involved here and the folks enjoying the cigars. And there are some pretty embarrassing anecdotes. Were any of them bothered by this? Were they embarrassed? Did it have an impact?
LIPTON: I think that - and the story came out. The governor said that she wanted to reopen the legislation and relook at the fact that, for example, 80% of the revenue that was going to come to the state was going to be set aside for professional sports and the fact that - you know, that I learned in doing the reporting that that was done at the request of the - a group of investors that controlled, you know, hundreds of acres of land near the two - intersection of two interstates. That was where - the most likely location for a professional sports team. And so they - and that they were the ones that pushed for this provision to be put into the bill. So, yeah, I think there was some regret. And the fact that the tax rate is as low as it is and that - you know, that Kansas residents are not really benefiting that much. So there's been - you know, so far, there's been a - $1.1 billion in bets in Kansas since the law went into effect. And it's generated only about $500,000 in tax revenues to the general fund in Kansas. So $1.1 billion in bets - you know, unless - and now - they've taken in $2.7 million in taxes, but most of that is - will go to the stadium fund. So, you know, it really - the lobbyists were able to negotiate a bill that that doesn't benefit the citizens of Kansas that much.
DAVIES: And there was talk about reopening it and amending it, but that hasn't happened yet.
LIPTON: Has not happened. No. I mean, one of the things that happened across the United States was that not only did states legalize sports betting, but they effectively, you know, embraced the marketing of it by giving out, like, a billion dollars - more than a billion dollars in promotional bets across the United States are being distributed tax-free. So when you get all these incentives to say, you know, we'll give you $500, a thousand dollars - in some states, you can get thousands of dollars - in, quote, "free bets" to get you started on sports betting, the states in many places have become kind of partners in that marketing because there's no taxes being paid by the sports betting platforms when they offer you those, quote, "free bets." And some places see that as a problem because it's incentivizing people who - you know, to think that that's not their own money if they're going to be betting. And it's getting people started on a betting habit that maybe shouldn't be getting started on a betting habit.
DAVIES: And so the money that the betting operators spend on these promotions is counted as a business loss and thus a tax deduction. Wow. One of the issues that came up was can you use your credit card to bet or to put money into your - an account with a sports betting - a sportsbook? Explain the significance of this and how that was dealt with.
LIPTON: Yeah, this is a very touchy question because if you're going to allow people to borrow money to make bets and someone is a problem gambler, that's going to quickly turn into a potentially serious financial problem and, you know, even bankruptcy for a person if they get in over their head, they're making bets that they can't afford to make. And so certain states have said that that there shall be now no, you know, credit cards, you know, to front bets. But then what happened in some states is because the - is that, in fact, the credit cards were being used to process bets. And you know, there are different places in the - around the world that have struggled with this question as to whether or not - you know, in some states, they actually allow payday lenders - can - have been - gotten into financing sports bets.
And so there's a lot of open questions at the moment. As you know, sports betting - the thing is that it's not only sports betting. It's mobile betting, you know, around the clock every day of the year. There's no limitations on it now because it's in your pocket. You don't have to go to the casino or you don't have to go to the store to buy a lottery ticket. You can - you physically are capable of betting at any moment that you choose to bet just like social media, you know. And should you then also have the capacity to be borrowing money to place those bets? And is that a dangerous precedent?
DAVIES: Right. Right. And so how is that dealt with? I mean, we use our credit cards for buying, you know, sandwiches and gum these days. I mean, is it excluded from placing gambling bets in a lot of places?
LIPTON: Many states prohibit the use of credit cards for betting. Some states that prohibited it, because of failures in oversight, at least temporarily, were allowing credit card bets to be placed. And one of the issues that's happened is that as betting has exploded in mobile phones, the states have not built up their regulatory systems to ensure that all of these betting platforms are following all the rules. It's, you know, a massive expansion in the scale of betting. And a lot of it is being delegated to the companies themselves to self-regulate and then report failures to the state regulators who then will punish them if they get self-reports of them not following the rules.
DAVIES: So the issue of credit card betting is something that is still an area of contention, then?
LIPTON: Yeah. I mean, for example, Maine is one of the latest states that's coming on board now with sports betting. And Maine is going to have one of the more restrictive regulatory systems around it. There's going to be a ban on promotional advertising in many places. There's going to be a ban on marketing on college campuses. And there's also going to be a ban on the use of celebrities in advertising. And the promotional credits are going to be - not going to be deductible like they are in other states. So different states are taking different approaches.
DAVIES: Let me reintroduce you. We're going to take another break here.
DAVIES: We are speaking with Eric Lipton. He's an investigative reporter for The New York Times. He worked with a team of reporters on a series of stories about the sports betting boom in the United States. It's titled "A Risky Wager," and you can find it online. He'll be back to talk more after this short break. I'm Dave Davies, and this is FRESH AIR.
(SOUNDBITE OF CHRISTIAN MCBRIDE TRIO'S "CHEROKEE")
DAVIES: This is FRESH AIR. I'm Dave Davies, in for Terry Gross. Our guest is New York Times investigative reporter Eric Lipton. He recently worked with a team of Times reporters on an investigation of the explosion of sports betting in the United States over the past four years. The stories cover the lawsuits and lobbying campaigns that led to its legalization, the favorable terms many state legislatures granted to gambling operators, partnerships that sports betting companies have struck with sports leagues, universities and media organizations, and the human impact of sports betting. The Times series is titled "A Risky Wager," and you can find it online.
You know, when this happened, when sports betting, you know, became legalized in a lot of states, the level of advertising was just astonishing. I mean, if you watched sports, they were everywhere. And online, it was everywhere, on Instagram and Twitter and everywhere. And I'm interested in the strategies that they use to get new gamblers into the game. They'll say, you know, you can get - your first bets are risk free up to $2,000. What does that even mean?
LIPTON: What they were doing is that they were giving you money, like, putting money on the table and saying, you can bet with our money on your first collection of bets. And if you lose, that you're essentially losing - you're not going to be losing your own money. And what was - what's happening is a kind of a loss leader fight for market share among the major companies. And they were willing to lose money up front in order to build - to dominate the market. And once you download an app and you register with a particular company, you're more likely to continue betting with that company. And so they desperately want you as a customer to get you in the door, so they're willing to give you, quote, "free money" up front to try to entice you to pick their platform. So there was an enormous amount of competition among these different companies. And what it resulted in was a kind of a, you know, competition as to who was willing to give out more free bets.
DAVIES: You know, I wanted to talk about some of the partnerships that the gambling operators have developed with different institutions, including colleges and universities. And this was just fascinating. The story about this had a photo of a banner ad at a Michigan State football game, which said Caesars Sportsbook and Casino, official sports betting partner of Spartan Athletics - Spartans are the team name at Michigan State - download the Caesars Sportsbook and Casino app. Really targeting people who are young; is there a special concern about people of that age getting involved in sports betting?
LIPTON: Yes. And part of our series was looking at these marketing arrangements that - one of our reporters, with a group of students from Columbia University journalism students, produced that story. And it is, you know, pretty extraordinary that there's, you know, nearly a dozen of these deals with state schools - Louisiana State, Michigan State University of Colorado, University of Maryland, University of Denver, Arkansas State and then two University of Nevada campuses that, although those ended, they had originally been negotiated. And in each of these deals, in exchange for marketing sports betting platforms, the universities were making money. And obviously, many of their student body is either younger than 18 or younger than 21. Different states have different age cutoffs in which betting is legal.
But it - you know, it was clear that they, the betting platforms, wanted the young demographic. But now they're basically targeting, in some cases, minors. Marketing was going to minors. And it has - that practice has drawn a lot of criticism, even from - some of the other betting platforms have said this is something that they're not going to participate in. But it is something that has caused a lot of controversy on a number of these college campuses. But it just shows you how desperate these companies are to get market share. And young people are potentially a great target market for them.
DAVIES: What's been the impact of legalized sports betting on Native American tribes, many of whom which really counted on a lot of casino revenue?
LIPTON: I mean, every state is different. But, you know, casinos have been a vital part in the West and, you know, actually across the United States, in Connecticut and New York and Florida. And in, you know, many states for decades now, casinos have been a primary source of revenue for Native American tribes. And so now you have these national players coming in that are completely disrupting the gambling environment. And it's been - in individual states - in Florida, the Native American tribes, the Seminoles, negotiated an incredibly good deal. In Arizona, the tribes did not get as good of a deal. And so it depends on the clout and the ability of the individual tribes to negotiate a deal. But clearly, this is a threat to a major source of revenue for Native American tribes. And if they're not careful and they don't have enough clout in their state legislatures, they're going to lose a major means of supporting their education and health programs.
DAVIES: Talking a bit more about the kind of gambling that happens here, what is a parlay bet?
LIPTON: One of the things that's happened is that the sports betting apps have realized that they can make even more money if they make a bet that pays out a bigger win but that you have much lower odds of actually winning. A parlay bet is a bet in which you will simultaneously bet on the outcome of multiple games and the different media companies that have, like, radio shows or podcasts that are promoting betting will propose a bunch of complicated parlays. And the parlays have become really popular with many sports betting fans because, again, it's sort of like a lottery ticket where, you know, you can get a really big payout, but the odds of you getting that payout are lower and lower. So you are much more likely to win in sports betting if you bet on an individual game than you are with a parlay. But the parlays have become incredibly attractive, and the sports betting companies are getting a larger share of their net revenues from these parlay bets, and they are marketing them very intensely.
DAVIES: Wow. So you pick three things, and sometimes it's not even a game, right? It can be, you know, whether a good guard leads in assists or something like that.
LIPTON: So the options in parlay bets are - it's a pretty complex and huge range. But for example, in baseball, you can bet over how many total bases, how many hits, how many innings will pass without a hit. And that can be, you know, one part of a multi-part bet that can also include a win or a loss of a particular team. And you line up these different wagers. And each layer makes that bet more complex because you have to hit each of the outcomes in order to win. And so your odds get lower as the bet gets more complex, but your payout gets bigger.
DAVIES: Wow. That (laughter) - it sort of takes you beyond being a fan and being, like, a technical analyst, right? I mean, how many total bases the team is going to get before the fourth inning, that's tricky, isn't it?
LIPTON: It goes back to - I mean, you know, Daily Fantasy Sports started off as a real aficionado of sports who loves the data and loves to compare the data and loves to get into the intricacies of the sport. And this feeds into that same habit, that people, you know, want to really drill down on the details of the game itself and bet on it.
DAVIES: Let me reintroduce you. We're going to take another break here. We are speaking with Eric Lipton. He's an investigative reporter for The New York Times. He worked with a team of reporters on a series of stories about the sports betting boom in the United States. It's titled "A Risky Wager." And it's available at the Times website. We'll be back to talk more in just a moment. This is FRESH AIR.
(SOUNDBITE OF THE ROOTS SONG, "PROCEED IV (AJ SHINE MIX)")
DAVIES: This is FRESH AIR, and we're speaking with Eric Lipton. He's an investigative reporter for The New York Times. He worked with a team of Times reporters on a series of stories about the sports betting boom in the United States. It's called "A Risky Wager." And you can find it on the Times website.
You know, in other forms of gambling, you have to go to a casino or a racetrack or at least call a bookie if you want to make a bet that you probably shouldn't. So there's some interval of time and effort between your impulse to gamble and the act of placing a bet. Now, you know, if gambling is legal and you have a smartphone, you can be watching a game on your TV set into your third alcoholic beverage, see commercials promoting sports apps, gambling apps on the game you're watching, pick up this phone right next to you and start betting on that game. It seems like a dream scenario for a gambling operator. You know, do we know how much betting has increased problem gambling?
LIPTON: I mean, one thing - the reasons that sports - professional sports teams have embraced sports betting, not only is it that it can - there's some revenue that can come their way through sponsorships, but it does increase engagement in games because there's - you now have a financial incentive. You're not only a fan, but you have money riding on this game. And you're more likely to watch it through to the end. And so it does increase engagement. But there is also a reason to believe that, at least for a share of the population, that they are going to have a hard time managing, you know, the bets and the debts that come from those bets, and the ability to be betting any time of the day or night on sports that are happening at different places around the United States or even around the world. And it is relatively new in the United States, outside of Nevada - but even in Nevada, it was a, you know, brick-and-mortar activity for the most part until recently. And in New Jersey as well, it's still maturing.
But the best place to look for evidence of how this will play out is in the U.K. or Australia or in other countries where sports betting has been, you know, a developed phenomenon for some time. And there is pretty compelling evidence there of a growing portion of the population, of young men in particular, who have become truly addicted to sports betting. And the National Health Service has been quite vocal about this and publicly writing letters to the sports betting platforms in Britain saying, there is a major social problem that has emerged in Britain. And we really need you to take steps. For example, you know, their high-loss customers. And these platforms know that they're high-loss customers. But then these platforms in the U.K. have been giving them, quote, "VIP treatment."
The NHS, the National Health Service, wrote letters to these platforms and said, you've got to stop doing this. You've got to stop, like, you know, enticing these people who you know have lost lots of money with special treatment to entice them to bet even more. You have to stop taking credit card bets. You have to, you know, end some of these commercial deals which are, you know, promoting betting so intensely at all hours and particularly during games. So the social consequences - if you want to see where the United States is headed, then you need to probably look overseas where the betting has - at a more mature place. And I think that the sports betting operators realize that they control, in part, their own destiny, and that they need to get ahead of this and figure out ways to help manage it, to prevent the social consequences being so great that there will be a backlash against them.
DAVIES: You know, I have to say, I was amazed when, you know, this crept into broadcasting to see, you know, veteran broadcasters at - doing live events, seeming to give their personal endorsements to gambling. I mean, they would, like, give the name of the sports book that they are in partnership with and say who they think might do well in, you know, the back nine of a golf tournament or in the second half of a game. Do the networks have any second thoughts about doing this stuff?
LIPTON: I mean, there is a - the media has become a part of this enterprise. And there are media companies that take cuts on betting as well. And, you know, the - it's a huge, you know, economy at this point. That is - not only is it the sports betting platforms and the teams, but even players are now being sponsored by sports betting platforms. And then, you know, there are podcasts. And there are, you know, popular media figures who are both broadcasters, but then they're also being paid by the sports betting companies to promote sports betting. And, you know, there's a lot of lines that are hard to determine, you know, exactly. Is this person a sports, you know, journalist? Or are they a sports betting marketing agent? A lot of lines have been blurred as, you know, professional sports has become, effectively, a gambling enterprise in the United States now.
DAVIES: Wow. Yeah. And we should note that the - in full disclosure, the Athletic, which is, you know, a prestigious sports online journalism organization, which is owned by The New York Times, has a partnership with BetMGM. So it's everywhere, isn't it?
LIPTON: Right. It's - you know, there are many newspapers that have embraced sports betting as a source of revenue. And it is definitely something that is - you know, it's part of our culture now.
DAVIES: You know, one of the things that I wonder is - you know, for a long time, the sports leagues didn't want sports gambling because they wanted to protect the integrity of the sport. And there are some famous scandals - the Black Sox scandal. And it occurred to me that once you can place a bet on your phone in a minute, what's to stop a player or even a sportswriter who is at a game and finds out that - you know what? The star starting pitcher here has some elbow soreness that nobody knows about yet. I can place a bet. Do we have any idea if this is either happening or if regulators are worried about it happening?
LIPTON: The players themselves are being monitored pretty closely for potential bets that they're placing, and then they are punished pretty intensely if that does occur. And - because they - you know, again, all of this data - you know, unless you're - if you're registering under your own name - and in order to register, you generally have to produce identification. And, you know, there's some verification check of your identity when you register as a player. I mean, you could, you know, figure out a way to probably - to falsify that.
But if a professional sports player does attempt to place a bet, there are companies like - you know, I mentioned GeoComply, which is checking your physical location. There are other companies that are checking who's betting. And there are yet other companies that are monitoring patterns in betting. So if suddenly there's an enormous flood of bets to suggest, you know, an unusual thing, there are companies who are tracking those patterns to see whether or not there is some type of insider information that is driving people to bet in a way in which, you know, some - perhaps illegally there's been, you know, an injury or a player is going to be out that day. There - that type of monitoring is also occurring, although it's occurring by contractors for the most part, not by state regulators. And so there is monitoring like that that is going on as well.
DAVIES: You talked about gambling addiction, which could be a problem as this developed. Are there other issues that we should be concerned about from this explosion of sports betting?
LIPTON: I think that the lines that are crossed when you're promoting the sport - are you promoting the sport, or are you promoting gambling? I think that it's one of the issues - is the conflicts of interest that emerge in - for the teams themselves, for the media. And I think that it's just something that's going to take, you know, a fair amount of scrutiny as time goes on as to - you know, are you here as - calling the game? Or are you here trying to sell betting? And the lines get a bit murky. And I think that, you know, this is still a sport, and it is - and is it - you know, and - but it has become a gambling enterprise. And so I think that, you know, the - and what are the incentives for the person that is calling the game and has information about particular players?
Another issue is just, you know, sports is a part of our culture, and it is such a prominent place in American society. And just the fact that it is now a part - and sports has always been a multibillion dollar business with incredible marketing and sponsorships. But the extent to which it is now a part of a gambling enterprise is - it sort of changes the nature of this pastime that is so much a part of American fabric. And it's just something I think we're all going to have to watch and - just to see to the extent that it maintains its role as an important and - you know, part of our culture. And how much does the gambling begin to overshadow the sports playing is an open question.
DAVIES: Well, Eric Lipton, thanks so much for speaking with us.
LIPTON: Thank you.
DAVIES: Eric Lipton is an investigative reporter for The New York Times. He worked with a team of reporters on a series of stories about the sports betting boom in the United States. You can find the series, titled "A Risky Wager," on the Times website. Coming up, Kevin Whitehead tells us the story of a 21-year-old Louis Armstrong's first recording session which wrapped up a hundred years ago today. This is FRESH AIR.
(SOUNDBITE OF HORACE SILVER'S "OPUS DE FUNK") Transcript provided by NPR, Copyright NPR.