We Legalized Sports Gambling. Now We're Paying for It — ft. Jonathan D. Cohen
Episode
39 min
Read time
2 min
Topics
Investing, Fundraising & VC, Design & UX
AI-Generated Summary
Key Takeaways
- ✓Bankruptcy correlation: States legalizing online sports betting see bankruptcies surge roughly 30% within a few financial quarters. Additional measurable effects include rising credit card and auto loan delinquencies, increased debt collection accounts, reduced savings in low-income households, and a spike in child protective services calls — all appearing within one to two years of legalization.
- ✓Self-exclusion as harm proxy: Pennsylvania's self-exclusion program enrolled roughly 50 young adults aged 18–35 annually from 2006–2018. After legalizing online sports betting in 2019, that number jumped to approximately 1,500 per year — a 30x increase — representing the clearest current data point for measuring rising gambling addiction rates among younger populations.
- ✓Friction as the primary policy lever: Cohen advocates replacing opt-in safeguards (deposit limits, time limits nobody uses) with opt-out default protections modeled on Flutter/FanDuel's UK and Ireland policy, which automatically caps monthly losses for users under 25. A national cross-platform self-exclusion registry would prevent addicted users from simply switching apps.
- ✓Prediction markets are sports gambling: Roughly 90% of trading volume on platforms like Kalshi involves sports. Because these platforms are classified as 18-plus rather than 21-plus and operate in all 50 states versus 32 for licensed sportsbooks, they effectively deliver sports gambling to 19-year-olds in states like Utah and Texas where it remains otherwise illegal.
- ✓Regulatory mandate reform: The single highest-leverage reform Cohen identifies is rewriting state gambling agency mandates. Maryland's current mandate explicitly prioritizes maximizing tax revenue from sports betting. Changing that North Star to prioritize resident well-being would organically produce downstream friction policies without requiring legislators to specify every individual consumer protection measure.
What It Covers
Scott Galloway interviews Jonathan D. Cohen, gambling policy lead at the American Institute for Boys and Men, examining how the 2018 Supreme Court decision legalizing sports betting across 39 states created a $148 billion industry that disproportionately harms young men through frictionless mobile apps and predatory design.
Key Questions Answered
- •Bankruptcy correlation: States legalizing online sports betting see bankruptcies surge roughly 30% within a few financial quarters. Additional measurable effects include rising credit card and auto loan delinquencies, increased debt collection accounts, reduced savings in low-income households, and a spike in child protective services calls — all appearing within one to two years of legalization.
- •Self-exclusion as harm proxy: Pennsylvania's self-exclusion program enrolled roughly 50 young adults aged 18–35 annually from 2006–2018. After legalizing online sports betting in 2019, that number jumped to approximately 1,500 per year — a 30x increase — representing the clearest current data point for measuring rising gambling addiction rates among younger populations.
- •Friction as the primary policy lever: Cohen advocates replacing opt-in safeguards (deposit limits, time limits nobody uses) with opt-out default protections modeled on Flutter/FanDuel's UK and Ireland policy, which automatically caps monthly losses for users under 25. A national cross-platform self-exclusion registry would prevent addicted users from simply switching apps.
- •Prediction markets are sports gambling: Roughly 90% of trading volume on platforms like Kalshi involves sports. Because these platforms are classified as 18-plus rather than 21-plus and operate in all 50 states versus 32 for licensed sportsbooks, they effectively deliver sports gambling to 19-year-olds in states like Utah and Texas where it remains otherwise illegal.
- •Regulatory mandate reform: The single highest-leverage reform Cohen identifies is rewriting state gambling agency mandates. Maryland's current mandate explicitly prioritizes maximizing tax revenue from sports betting. Changing that North Star to prioritize resident well-being would organically produce downstream friction policies without requiring legislators to specify every individual consumer protection measure.
Notable Moment
Cohen reveals that gambling carries the highest suicide rate of any addiction — surpassing alcohol, cocaine, and meth — because financial losses remain invisible to family and friends. Unlike substance abuse, gambling addiction leaves no physical signs, allowing people to silently lose everything before anyone intervenes.
Episode Transcript
Marvel Television's Wonder Man, an eight episode series, now streaming on Disney plus. A superhero remake, not exactly what we'd expect from an Oscar winning director. Action. Simon Williams Audition for Wonder Man. I'm gonna need you to sign this, assuming you don't have superpowers. I'll never work again if anyone found out. My lips are sealed. Marvel Television's Wonder Man. All eight episodes now streaming only on Disney plus. Will America recover its political decency after Trump leaves office? I think the bigger concern I have than Trump's staying power is, let's say he's cratering. He has had an effect on the civic mind that is not going to go away. I'm Preet Bharara. And this week, George Packer of the Atlantic joins me to discuss Trump's lasting effect on the American mind. The episode is out now. Search and follow Stay Tuned with Preet wherever you get your podcasts. Episode 396. 396 is the call code belonging to Johnson Island. In 1996, Motorola released the first flip phone. This year, the Apple iPhone is the most popular handheld. No. It's my always in the other hand. I don't like that. Today's episode, we ask, do you really need a new smartphone every year? Brought to you by Apple. That's better. Go. Welcome to the 396 episode of the Prop GPod. What's happening? In today's episode, we speak with Jonathan d Cohen, who leads gambling policy at the American Institute for Boys and Men. He's also the founder of Losing Big, America's reckless bet on sports gambling. This is something I think about a lot. So I gamble. I don't do it as much, but I buy or I actually write options contracts, and I've convinced myself that it's a means of hedging and a way to make money. The reality is whatever that dopa releases you get from gambling, that's why I do it. I know that over the long term, there's probably someone smarter on the other side of the trade. It's very risky, but I continue to do it anyways. This is something that is really the term is preying on the young male brain. They're bored, they're at home, they have their smartphone, they basically have Vegas in their pocket. But, if I'd had the ability in class to bet on the speed of the next pitch, I don't know if I'd been able I would have been able to resist that. It is just absolutely everywhere. And, six out of seven gambling addicts are, are men. And the thing that always struck me or the fact about gambling that always stuck with me, my mom when my mom was retiring, we looked at Arizona, Palm Springs, and Las Vegas. And we chose Las Vegas because in addition to it being beautiful ten months of the year, July and August, it's a little bit rough. Little bit rough, but the desert is beautiful. Desert's the most underrated topography in the world in my view. But …
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