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 — 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.
And this isn’t just about sports. It’s about how our economy increasingly exploits our cognitive biases and our irrationality, and how institutions — governments, media companies, even the sports leagues — have partnered in this system, because they all want a cut of the action.
Jonathan Cohen is the author of Losing Big: America’s Reckless Bet on Sports Gambling. It’s a new book about the financial infrastructures that we’ve built on top of psychological vulnerabilities. I invited him onto The Gray Area to talk about how this happened so fast, what online gambling shares with social media and crypto, and how destructive — on a human level — all of this has been.
As always, there’s much more in the full podcast, so listen and follow The Gray Area on Apple Podcasts, Spotify, Pandora, or wherever you find podcasts. New episodes drop every Monday.
This interview has been edited for length and clarity.
Tell me about the 2018 Supreme Court case that opened the floodgates for sports gambling seemingly overnight.
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 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’ rights. And so, starting in 2018 with the Supreme Court decision, states are allowed to legalize sports gambling if they so choose.
How many states have chosen to do it? And how quickly?
Delaware did within six weeks. Today, as we’re 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.
FanDuel and DraftKings are the names almost everyone knows. How much of the pie do they control?
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.
What happened to online gambling during the COVID era?
It takes off politically in places like New York because of the fiscal crunch faced by states. And this isn’t a new thing. It goes back to the lottery, and even during the Great Depression, when slot machines were legalized in four states because they needed the revenue.
Lawmakers have this belief that there’s always more money in the gambling cookie jar. Oh, we need money. Let’s just legalize more forms of gambling, and that will make up for our revenue shortfalls. Politically, that’s exactly what happens during COVID in places like New York and in other states.
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’s 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.
The gambling companies promise the states all this easy revenue, and they go all in. How does that bet work out for them?
This is what’s 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?
Let’s talk about the cost, especially the human cost.
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’re designed?
I thought Kyle was emblematic of what’s happened here. He’s 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.
At some point, I don’t 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’t going out; he wasn’t 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.
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.
Yeah. I picked him because he is a young man, and this is the demographic it’s happening to. It completely interrupted his life. There’s 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.
Why are young men in particular so vulnerable to this?
First of all, young men are not exactly known for being judicious and careful, especially when it comes to money. They don’t have great impulse control. You could already imagine how that would set them up poorly for something like this.
They’re also — and I’ll speak for myself as a formerly young male sports fan — overconfident about their knowledge of sports. Sports gambling companies absolutely take advantage of this. There’s a FanDuel ad saying something like “never waste a hunch,” challenging you to prove that you “know ball” by betting on your hunches.
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.
And then [there is] “financial nihilism” among young people and young men in particular. Many young men have disposable income, [but it’s] maybe not so much that they’re ever going to realistically buy a house or pay off their student loan or start a business. So they might as well gamble.
Whether it’s on sports betting, whether it’s on crypto, whether it’s on stock markets, whether it’s on video game skins — it’s not worth having $10,000 in their pocket. It’s worth having a chance at $100,000 or a million dollars. And they’re willing, as a result, to gamble and gamble more and gamble in riskier ways than they otherwise would.
What percentage of the industry’s revenue comes from the Kyles of the world? Not the pros or high rollers — regular working people who are addicted to gambling?
Sixty percent of betters account for 1 percent of revenue from NFL bets. If you do the flip side, 82 percent of the money is coming from 3 percent of betters. Some of those people I’ll flag are going to be really rich VIP betters like Phil Mickelson, who gambles a ton. But you can imagine there’s a lot of Kyles caught up in that group or in the interstitial group between them.
What makes online sports betting fundamentally different — and more seductive — than traditional gambling?
What makes it different from everything that we had before 2018 is the seamlessness. It’s the app design that’s just as good and just as seamless and just as frictionless as social media or a shopping app. And there’s an endless, endless, endless menu of betting options.
You can bet on, sure, the LSU Tigers to win the game. You can also bet on whether the first half kickoff is going to be a touchback. And then you can bet on whether the next pitch in a baseball game is going to be 88 miles an hour or faster. You can bet on a tennis serve. And then at 3:00 in the morning when you’re on this bender, you’re in this rabbit hole and you lost all [your] money all day, you can bet on Malaysian women’s doubles badminton.
It’s not a brick-and-mortar casino. They can’t pump oxygen into the room. They can’t pull the clocks off the wall like they can at the casino. But they can, with little behavioral nudges, design into the app some of those tricks of the trade.
When these platforms detect — and they have plenty of data to do it — that someone is trying to wean themselves off betting, or when they spot problematic play, what do they do? Do they leave that person alone and let them wean themselves off? Or do they slam them with promotional credits and deals trying to hook them back in?
The anecdotal evidence suggests that they do the latter. I’ve seen reports suggesting that they even figure out when your payday is, and they’ll send you more promotional credits and offers on those days.
The data that they have on gamblers would make Las Vegas of the 1950s weep. It’s incredible how much data they must have on every single one of us. They claim that this allows them to protect people and to flag users who are betting problematically, who are logging in too many times. But I have seen no indications that that’s how they’re using the data. It seems like they’re instead using it to pair someone who’s betting a lot with a VIP host and offer behavioral nudges and emails, auspiciously timed to re-engage them and to keep them in the cycle.
Do they kick people off when they’re consistently winning? They’re clearly capable of identifying problems and responding to them.
Yes, absolutely. And some professional gamblers I talked to, they make a habit of every once in a while placing a really, really vanilla ice cream–looking bet. They’ll bet on Aaron Judge to hit a home run or the LA Lakers to win the championship, because they want to look as stupid as possible, so that the sportsbook thinks that they’re a normie and not a professional gambler.
Because the second [companies] realize that they’re a professional gambler or that they can win money, they’ll just kick them off the platform. But as long as [the professional gamblers] can make [the companies] think they’re an idiot and that they’re going to lose or that they’re addicted, the platforms want to keep them playing.
The industry loves to use phrases like “responsible gambling.” What is your issue with people being personally responsible, Jonathan?
I don’t have an issue with personal responsibility, and I do think people have agency and should have agency over their own life. Fine. That being said, it’s not simply that it’s Kyle against the sportsbook. It’s Kyle against a multibillion-dollar corporation that is doing everything in its power to hook him and extract every last dollar of his discretionary income.
They say, Oh, if you want to set a deposit limit, if you want to set a time limit, you can do that. But [those tools] are rooted in a user opting in to decide to set a time limit, deciding to set a deposit limit.
Fundamentally, what it’s doing is putting the onus of responsibility of “responsible play” onto the gambler, onto the individual, rather than onto the company to responsibly provision the gambler with a non-addictive product or a product that is not maliciously designed to extract every last dollar that they have in their bank account.
Are there signs that the companies are getting better at this? That policymakers are taking this more seriously in terms of identifying problem gamblers and offering resources to help them get over that problem?
Not on their own. If there’s a reason for hope, I would say it’s coming from outside.
There are advocacy groups that are filing class action lawsuits over some of these companies’ most insidious behaviors, these crazy promotions that offer $25,000 in bonus cash, but you actually need to bet $100,000 to get the $25,000 bonus or whatever it may be. There’s also a lawsuit ongoing in New Jersey over VIP hosts, the company’s employees whose job it is to find big bettors and keep them betting.
Maybe we’re going to have some of the regulation that I wished we had initially had seven years ago. To the degree that there was momentum for it, I don’t think it’s coming yet from the companies themselves, as much as it is from advocates who are waking up to the harms.