Itemoids

Supreme Court

Trump Tries to Seize ‘the Power of the Purse’

The Atlantic

www.theatlantic.com › politics › archive › 2025 › 01 › trump-executive-order-spending-congress › 681484

Buried within one of the dozens of executive orders that President Donald Trump issued in his first days in office is a section titled “Terminating the Green New Deal.” As presidential directives go, this one initially seemed like a joke. The Green New Deal exists mostly in the dreams of climate activists; it has never been fully enacted into law.

The next line of Trump’s order, however, made clear he is quite serious: “All agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 or the Infrastructure Investment and Jobs Act.” The president is apparently using “the Green New Deal” as a shorthand for any federal spending on climate change. But the two laws he targets address much more than that: The $900 billion IRA not only funds clean-energy programs but also lowers prescription-drug prices, while the $1.2 trillion bipartisan infrastructure law represents the biggest investment in roads, bridges, airports, and public transportation in decades. And the government has spent only a portion of each.

In one sentence, Trump appears to have cut off hundreds of billions of dollars in spending that Congress has already approved, torching Joe Biden’s two most significant legislative accomplishments. The order stunned even some Republicans, many of whom supported the infrastructure law and have taken credit for its investments.

And Trump didn’t stop there. Yesterday, the White House ordered a pause on all federal grants and loans—a move that could put on hold an additional tens of billions of dollars already approved by Congress, touching many corners of American life. Democrats and government watchdogs see the directives as an opening salvo in a fight over the separation of powers, launched by a president bent on defying Congress’s will. “It’s an illegal executive order, and it’s stealing,” Representative Rosa DeLauro of Connecticut, the top Democrat on the House Appropriations Committee, told me, referring to the order targeting the IRA and infrastructure law.

Withholding money approved by Congress “undermines the entire architecture of the Constitution,” Democratic Senator Chris Van Hollen of Maryland told me. “It essentially makes the president into a king.” Last night, Senate Minority Leader Chuck Schumer said that Trump’s freeze on federal grants and loans “blatantly disobeys the law.”

The Constitution gives Congress the so-called power of the purse—that is, the House and the Senate decide how much money the government spends and where it goes. Since 1974, a federal law known as the Impoundment Control Act has prohibited the executive branch from spending less than the amount of money that Congress appropriates for a given program or purpose. During Trump’s first term, the nonpartisan Government Accountability Office found that the administration had violated that law by holding up aid to Ukraine—a move that became central to Trump’s 2019 impeachment.

[Jonathan Chait: Trump’s second term might have already peaked]

Trump has argued that the Impoundment Control Act is unconstitutional, and so has his nominee for budget director, Russell Vought, who had the same job at the end of the president’s first term. Vought also helped write Project 2025, the conservative-governing blueprint that attracted so many attacks from Democrats that Trump disavowed it during the campaign.

In his Senate confirmation hearings this month, Vought repeatedly refused to commit to abiding by the impoundment act even as he acknowledged that it is “the law of the land.” “For 200 years, presidents had the ability to spend less than an appropriation if they could do it for less,” he told senators at his first hearing. During his second appearance, when Van Hollen asked him whether he would comply with the law, Vought did not answer directly. “Senator, the president ran against the Impoundment Control Act,” he replied. His defiance astonished Democrats. “It’s absolutely outrageous,” Van Hollen told me.

The pause on funds for the Biden-signed laws did not draw as much attention as other moves Trump made on his first day back in the White House, especially his blanket pardons for January 6 defendants. Nor was it the only one that appeared to test the limits of his authority. A separate executive order froze nearly all foreign aid for 90 days, while others targeted birthright citizenship and civil-service protections for federal employees.

But the order cutting off spending for the IRA and the infrastructure law could have far-reaching implications. State and municipal governments in both Democratic and Republican jurisdictions worry that they may not be able to use investments and grants that the federal government promised them. “It’s creating chaos,” DeLauro said. “I honestly don’t think the people who are dealing with this know what they are doing.” She listed a range of popular and economically significant programs that appear to be on pause, including assistance for home-energy bills and money to replace lead pipes that contaminate drinking water.

“It was alarming,” Representative Don Bacon of Nebraska told me. Bacon, a Republican who narrowly won reelection in a district Trump lost, called the White House after reading the text of last week’s executive order to seek assurance that money he’d secured for Nebraska—including $73 million to upgrade Omaha’s airport—wouldn’t be stopped.

The immediate confusion became so intense that a day after Trump signed the order, the White House issued a memo seeking to clarify its scope that seemed to slightly narrow its impact and open the door for some spending to continue. Bacon told me that he was assured the directive applied mostly to Biden’s electric-vehicle mandate, which Trump railed against on the campaign trail and is part of the IRA. DeLauro, however, said the memo offered little clarity: “Everything is at risk.”

Yesterday’s memo extending the funding pause to all federal grant and loan programs set off another frenzy. The directive sought to exempt Medicare and Social Security recipients, as well as other direct aid to individuals. But according to a copy of the memo published by The Washington Post, it explicitly targets “financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”

Whether the funding pause constitutes an illegal impoundment is unclear. The executive branch does have some latitude in how it spends money. And yesterday’s memo instructs federal agencies to halt funding only “to the extent permissible under applicable law.” Describing last week’s order targeting the IRA and infrastructure law, Vought told senators that it was merely a “programmatic delay,” a term that arguably falls within what federal departments are allowed to do.

More broadly, executive orders are frequently less consequential than they appear, Nicholas Bagley, a law professor at the University of Michigan and occasional Atlantic contributor, told me about last week’s directive. “It’s one thing to try to get a really nice headline for cutting back on government spending. It’s another thing altogether to decline to spend money that people are expecting you to spend,” Bagley said. “I would not be surprised if rhetoric does not match reality.”

To Charlie Ellsworth, a senior adviser with the nonprofit watchdog Congressional Integrity Project, Trump’s executive order on clean energy unmistakably oversteps the law. “They could have done this legally, but they didn’t,” Ellsworth, a former Schumer aide, told me. A new administration, for example, could have justified a pause in spending to ensure that a program was being funded in accordance with the law. But the order instead instructs agencies to ensure that the spending aligns with new policies set by the Trump administration. Ellsworth said that the order is “self-evidently” illegal.

The fight is almost certain to wind up in the courts, which have repeatedly ruled against the president’s ability to withhold funds appropriated by Congress. Indeed, Vought’s Senate testimony seemed to invite a legal challenge that could lead the Supreme Court, now with a 6–3 conservative majority and three Trump-appointed justices, to reconsider the question. “That seems to be their game plan,” Ellsworth said. “They want to get sued. They want to go to the Supreme Court.”

Van Hollen told me that he believes the Court would rule against Trump but that preferably the dispute won’t get that far. “You would hope that Republicans in Congress recognize they have an institutional interest in protecting Article I [of the Constitution] and the power of the purse, which is clearly congressional,” Van Hollen said.

[David A. Graham: It’s already different]

Beyond the question of legality, Van Hollen warned that Trump’s orders would jeopardize virtually all negotiations over spending on Capitol Hill, because Democrats would not be able to trust the administration to keep its end of any agreement. Although Republicans have majorities in both the House and the Senate, they will need to strike deals with Democrats to avert government shutdowns and a catastrophic default on U.S. debt.

There were early signs of GOP pushback on last week’s spending freeze, but it fell well short of a revolt. Senator Rand Paul of Kentucky, the chair of the Homeland and Governmental Affairs Committee, said at one of Vought’s hearings that he disagreed with the administration’s view on spending and impoundments. “I think if we appropriate something for a cause, that’s where it’s supposed to go, and that will still be my position,” Paul said. And Senator Lindsey Graham of South Carolina, the chair of the Budget Committee, said at a second Vought hearing that he, too, had “concerns” about impoundment. But neither of them planned to stand in the way of the nominee who has argued for the president to wrest control of spending from Congress. “When you win, you get to pick people,” Graham told Vought. “And I’m glad he picked you.”

On the Republican side, the fight might be left to lawmakers such as Bacon, who has some protection from presidential retribution because he represents a purple district where voters might reward him for standing up to Trump. The GOP, he said, should go after policies it opposes through legislation, not executive order. “You just can’t determine what laws you want to execute and what you don’t,” Bacon said of Trump. Executive orders, he added, “have gotten out of hand” from presidents in both parties. “You can’t change the law,” Bacon said. “I think Republicans should stay true to that notion.”

The Strategy Behind Trump’s Policy Blitz

The Atlantic

www.theatlantic.com › politics › archive › 2025 › 01 › trump-executive-actions-week-one › 681486

The staff was still setting up dinner on Mar-a-Lago’s outdoor patio on a balmy early-January evening when Donald Trump sat down. He was surrounded by several top advisers who would soon join him in the West Wing and who wanted to get his input before his attention shifted to his wealthy guests and Palm Beach club members.

Susie Wiles, the incoming chief of staff, led the conversation, listing some of the dozens of executive orders that had been teed up for Trump’s signature once he reclaimed the presidency. She wanted to talk about sequencing, according to a Trump adviser present at the meeting, speaking on the condition of anonymity to discuss private conversations. How would he like to stagger the orders over the first few weeks back in office?

“No,” Trump replied, this person told me. “I want to sign as many as possible as soon as we show up.”

“Day one,” he said.

Trump has followed through on the promise of an onslaught, unleashing in his first week more than two dozen executive orders, holding a nearly hour-long news conference and other question-and-answer-filled public appearances, and posting several times a day on social media. Some of this, of course, is in Trump’s nature. He is an inveterate showman whose instincts are to seek attention and dominate the discussion.

[Jonathan Chait: Trump’s second term might have already peaked]

But this time around, Trump’s ubiquity is also a deliberate strategy, several of his aides and allies told me. Part of the point is to send a message to the American people that their self-declared “favorite” president is getting things done. The person at the Palm Beach meeting and another Trump adviser, who also requested anonymity to describe private conversations, told me that the White House’s flood of orders and news is also designed to disorient already despairing Democratic foes, leaving them so battered that they won’t be able to mount a cohesive opposition.

Trump’s actions in his first week have been a mix of signal and noise, of distraction and seriousness. He has taken some defeats. But Trump has succeeded, at least, in creating a stark contrast with the quiet of his predecessor, and in (yet again) shifting the nation’s political discourse back toward him. And compared with 2017, the resistance has been far more muted. The Democrats, without an obvious head of the party and still digging out from November’s election disappointment, have yet to make a focused counterargument to Trump, instead getting largely drowned out in the national discourse.

“This is four years in the making. It’s days of thunder. The scale and the depth of this has blown the Democrats out. It’s blown out the media,” Steve Bannon, a former senior White House aide who still informally advises Trump, told me. “He vowed to start fast and now knows what he’s doing. This is a totally different guy than in 2017.”

When Trump left office in disgrace after the January 6, 2021, insurrection, former administration officials, conservative lawyers, and think-tank researchers began drafting orders and legislation—most famously, the Heritage Foundation initiative known as Project 2025—that could act as the foundation of a Trump revival. And after he won, his inner circle made clear that this time the administration would be staffed with true loyalists.

Wiles, who also co-chaired Trump’s campaign, told a closed-door gathering of Republican donors in Las Vegas in the early days of the transition that the president’s first moves would be to reinstate some executive orders from his first term that President Joe Biden had revoked, according one of the Trump advisers and another person familiar with the meeting. Wiles told the private gathering, for a group called the Rockbridge Network, that Trump would begin by withdrawing from the Paris climate treaty and the World Health Organization. Trump, indeed, signed those orders on his first day back in office, but they were only two of the directives to which he affixed his signature—with a giant Sharpie—in ceremonies held at the Capitol; inside a sports arena in Washington, D.C.; and in the Oval Office during his inauguration festivities and in the days that followed.

His executive orders so far have covered immigration, trade, demographic diversity, civil rights, and the hiring of federal workers. Trump ordered DEI (diversity, equity, and inclusion) programs in the federal government to be eliminated. He curtailed the Department of Justice’s civil-rights investigations. Federal health agencies were ordered to halt public communications. And he moved to expand presidential power by eliminating protections for federal workers—so he could more easily staff agencies with supporters—and by refusing, without citing any legal authority, to uphold the U.S. ban on TikTok despite a unanimous Supreme Court ruling in the ban’s favor.

“The EOs are so much better-executed now,” Bannon told me. “Back in 2017, we were writing things on the back of envelopes. It was like a playground game, shirts and skins. Now they have good people working, real lawyers.”

Some of Trump’s moves have been symbolic, such as one order to rename the Gulf of Mexico as the Gulf of America and another to insist that, even in national times of mourning, flags be flown at full staff on Inauguration Day. Others ordered government reviews—to examine China’s compliance with trade deals, for example, or the feasibility of creating an External Revenue Service to collect tariffs—but might not have real heft. If it was hard to tell the difference between what was real and what was for show, that was by design, the two advisers told me—to make it difficult for Trump’s opponents to focus their outrage.

His aides debated for weeks about how to enact his campaign pledge to pardon the January 6 rioters, whom the incoming president had declared “hostages.” Days before Trump took office, many advisers, including Vice President J. D. Vance, expected that pardons would be issued for many of the offenders but not, at least immediately, for those convicted of violent crimes, including assaulting police officers. But Trump overruled them, issuing a blanket pardon, and he included commutations for the leaders of the Oath Keepers and Proud Boys, each of whom had been sentenced to more than 15 years in prison for seditious conspiracy. The two Trump advisers said that Trump thought leaving anyone out would invalidate the underpinning of the Capitol riot—his insistence that he won the 2020 presidential election. Trump also decided that any blowback would be manageable.

[Read: Trump’s first shot in his war on the ‘deep state’]

Not everything has worked out for Trump in his first week. Even some staunch Trump allies recoiled from the pardons for violent January 6 offenders; Senator Lindsey Graham called them “a mistake” on Meet the Press. Perhaps most notable, Trump’s move to end birthright citizenship generated a wave of legal action and was blocked by a federal judge. On his first day in office, Trump took on the Fourteenth Amendment by issuing a directive to federal agencies to stop issuing citizenship documents to children born on U.S. soil to parents in the country illegally or under temporary visas. The U.S. government has long interpreted the Fourteenth Amendment to mean that those born on American soil are citizens at birth, regardless of their parents’ immigration status. The U.S. district court judge who blocked the order, John Coughenour, called it “blatantly unconstitutional” and told a Trump administration attorney, “I have difficulty understanding how a member of the bar could state unequivocally that this is a constitutional order.”

Trump has also struggled to achieve his goal of fast-tracking Cabinet confirmations in the early days of his administration. His choice for secretary of defense, Pete Hegseth, became the first Pentagon nominee to require the tie-breaking vote of the vice president to be confirmed. And Trump’s team is even more concerned about his pick for director of national intelligence, former Representative Tulsi Gabbard. The president’s aides are not certain that she has the needed support, and Trump himself has expressed some doubt that she’ll be confirmed, the two Trump advisers told me.

Despite these stumbles, the White House has reveled in Trump’s bombastic, over-the-top style, believing that his message is breaking through. Immigration officers have conducted raids in Chicago; Newark, New Jersey; and other cities. A dozen Guatemalan men in shackles were boarded onto a military aircraft in El Paso, Texas, for the deportation flight to their native country, according to the Department of Homeland Security. Trump threatened tariffs on Colombia in a tiff, now seemingly resolved, over deportation flights. His advisers have also aimed to keep the media off-balance. The White House press office has not sent out a daily schedule to reporters, and has given little notice for Trump’s events. White House Press Secretary Karoline Leavitt has yet to hold a formal briefing (though the first is tentatively slated for later today).

The speed and volume of Trump’s orders so far seem to be scrambling the left. Millions of protesters marched in cities across the nation on January 21, 2017. Democratic civic groups exploded in popularity, liberals organized voter-registration drives, and cable-TV ratings and newspaper subscriptions soared. Late-night comics made Trump their top punch line. Trump’s hastily written travel ban on Muslim-majority countries went into effect seven days into his term in 2017, sending lawyers and even ordinary citizens sprinting to airports to assist those who were suddenly subject to detainment. That moment, in many ways, was the early high-water mark of the resistance and set a template for the Democrats’ defiance going forward.

Yesterday marked the first week of Trump’s second term. No large-scale protests have taken place. House Minority Leader Hakeem Jeffries argued during last week’s caucus meeting that Democrats cannot chase every outrage, because the Trump administration will “flood the zone” with maddening changes, one person in the room told me. In a Saturday Night Live sketch this past weekend, the show’s Trump character shut down a performance based on Lin-Manuel Miranda’s Hamilton, which became a liberal totem a decade ago. The mood among Democrats, at least in some quarters, feels more like resignation than resistance.

So far, the action on the left has been centered more in the courtrooms than in the streets. Deirdre Schifeling, the chief political and advocacy officer of the American Civil Liberties Union, told me that the organization has filed lawsuits to contest a variety of Trump’s immigration orders and has worked to train volunteers in dozens of states to help local officials in responding to the administration’s plans.

“We’re in a different moment. People are not as surprised as the first time. But I would not mistake that for a lack of willingness to fight,” Schifeling said. “It seems like this first week is one giant test balloon—seeing what will stick, seeing what they can get away with. It’s incumbent on all of us to stay calm and firmly push back on them. Don’t give them an inch.”

[David A. Graham: It’s already different]

Jennifer Palmieri, a longtime Democratic strategist who served as White House communications director for Barack Obama and worked on Hillary Clinton’s and Kamala Harris’s campaigns, told me that Democrats “can’t stay demoralized” and must recognize that Trump proposed “an agenda that people bought into”—that even gave him a popular-vote victory.

“Now [we need] to stay most focused on those issues—like prices—which he is the most vulnerable on,” Palmieri said. Inflation was a core campaign issue, and Trump himself noted during the transition that he “won on groceries,” telling Meet the Press in December, “We’re going to bring those prices way down.”

“It’s a tangible thing, and he needs to deliver,” Palmieri said.

That hasn’t started happening yet. For all the shock and awe of Trump’s first week, none of his initial actions directly took on inflation. But nor are Democrats making Trump look particularly vulnerable.

Why States Took a Gamble on Sports Betting

The Atlantic

www.theatlantic.com › podcasts › archive › 2025 › 01 › why-states-legalized-sports-betting › 681483

This story seems to be about:

Subscribe here: Apple Podcasts | Spotify | YouTube | Overcast | Pocket Casts

Addiction comes in many forms and a lot of them are perfectly legal.

Daily, I fight the urge to scroll—for hours—on various social-media apps, yet I can go months without drinking alcohol and not even think about it.

The question of whether to ban harmful behaviors or substances is one laden with competing priorities: How intrusive is the government intervention? How harmful is the substance? Would banning it even work to curb the behavior? What about the economic impact of a ban? What sorts of revenues can be gained from taxation instead?

On today’s episode of Good on Paper, I talk with the journalist Danny Funt, who has been reporting for years on a behavior that’s come under much scrutiny lately: sports betting. Renewed debate over bans on sports betting erupted into public view nearly seven years ago in a pivotal Supreme Court case. The decision opened the door to a variety of new state legalization schemes and the outcomes have been mixed, at best. Although states may have stumbled onto a new source of revenue (albeit weaker than some were expecting), it has come at a cost to gamblers’ financial and mental health. The results have turned even vocal proponents into skeptics.

“I interviewed Charlie Baker, the former governor of Massachusetts who signed the bill legalizing bookmaking there in 2022, and then a few months later became president of the NCAA and has become a really vocal champion for limiting the amount of betting on college sports, particularly in light of the brutal harassment that college athletes and coaches get whenever their performance costs someone a bet,” Funt recalled. “It’s honestly horrifying, the sort of stuff they see on social media and in real life. And he has said point-blank, ‘I wish, in hindsight, this had stayed in Las Vegas.’”

The following is a transcript of the episode:

Jerusalem Demsas: The Super Bowl is coming up, and so today we’re talking about the most important part of sports: gambling.

In 2018, the Supreme Court struck down a federal ban on sports betting that spurred four years of nonstop ads enticing me and you and everyone I know to spend all our discretionary income on FanDuel or DraftKings. At the time, advocates believed that the revenue streams that could come from sports betting were too good to pass up. After the Great Recession, states were cash-strapped and hungry for new sources of money.

States have unevenly legalized, meaning in some places, you can log onto your phone to place a bet, and in others, you might still need to go to a physical location. The Court left open other pathways for the federal government to curb or ban sports betting, and as many of the negative impacts of gambling have metastasized, more policy makers are questioning whether legalization is worth the revenue.

My name is Jerusalem Demsas. I’m a staff writer at The Atlantic. And this is Good on Paper, a policy show that questions what we really know about popular narratives. My guest today is Danny Funt, a journalist who has tracked the rise of sports betting for The Washington Post and is now working on a wide-ranging book on the topic.

[Music]

Demsas: Danny, welcome to the show.

Danny Funt: Thank you for having me.

Demsas: So I have actually never bet on sports. I grew up in a Christian household—I am Christian—and it’s just not a thing that my parents ever allowed. We couldn’t even make dollar bets at home. Like, it was just not allowed. And I feel like I knew later on that I had kind of an addictive personality. So I was like, I’m not going to do this. I’m just never going to get into betting or gambling. Have you bet on sports? Is this something that you do?

Funt: Oh yeah. I’m trying to be more honest about that. I used to be like, Well, if you were a restaurant reporter, you’d have to eat out. You’d sort of be obligated to see what the culinary scene is like. So I do the same with sports betting. But truthfully, I was betting on sports long before I ever wrote about it.

I will say that the more you learn about how significant the house’s upper hand is, it definitely gets in the back of your head, and I do a lot less now just knowing I don’t stand a chance.

Demsas: How significant is it?

Funt: It depends on what you’re betting. The standard is actually pretty low. They’ll win $5 for every $100 you bet. But nowadays, that’s getting jacked up. So you might have heard of things like parlays. The parlay hold percentage, which is like the house revenue or the house edge, can be as high as 20 percent. So you’re getting beat pretty bad if you bet a lot of parlays.

Demsas: So sports betting, I feel like, I really did not hear a lot about, other than just when the World Cup is on, and your friend might bet you 20 bucks about the outcome or something like that. And now I feel like it’s everywhere. I feel like I’m seeing ads everywhere. I feel like every time I look over on the Metro, like, there’s some 17-year-old guy on DraftKings—well, let’s hope he’s 19, not 17. But it feels like it came out of nowhere. What happened?

Funt: It really did. That’s really what got my attention: It just felt like, overnight this went from something that we had all been taught was this existential threat to sports, that the professional leagues and the NCAA would never support—there were basically a century’s worth of scandals involving gambling that motivated that concern—and then, suddenly, there was a Supreme Court decision in 2018 that struck down a federal ban on bookmaking outside of Nevada.

And that really was a starting gun for all of these states to say, Hey. This is a way we can raise money and cash in on this opportunity. And it was incredible how night and day it was, where what I described as this existential evil was suddenly repackaged as this wholesome way of enjoying sports that every sports fan ought to consider.

Demsas: So take us back to 1992, where that federal ban was enacted. It’s called the Professional and Amateur Sports Protection Act. What led to that effort? Who was pushing for it, and why did they think it was necessary?

Funt: Yeah, I was surprised to learn that it was the professional sports leagues, mainly the NFL, that went to Congress and said, Hey—we need this. So a lot of states back then were facing severe budget deficits. You know, it’s the tail end of the Reagan era; there’s a lot of resistance to tax hikes.

And naturally, when you need to raise money, but you don’t want to raise taxes, states will look at gambling. And there was sort of a groundswell of loosening the laws around tribal casinos and state lotteries. And a lot of states began looking at, basically, a version of state-sanctioned sports betting, where a state lottery is giving people the chance to wager on sporting events.

And the sports league said, We hate this idea. We’ve allowed it in Nevada because it’s been there forever, but we don’t want this to be the way that our fans engage with our product.

Demsas: Why? Why were they opposed?

Funt: For one, the 1919 Chicago White Sox scandal, where, famously, the team rigged the World Series in cahoots with gamblers—that is front and center still. Pete Rose had just been banned for life for betting on baseball as a player and as a coach. Really every decade, if you look back in the history books, there’s a major scandal involving college sports or professional sports or whatever. Beyond that, they just thought, We like the idea of fans liking the games for the games’ sake, and if they’re looking at it through this cynical gambling lens, it’ll kind of cheapen their relationship with sports and diminish our product.

Demsas: That’s very altruistic, right? I mean, I would imagine these sports leagues are just like, What can make us money? You know what I mean?

Funt: Definitely. At the same time, that does make them a lot of money. Think of all the jerseys and pennants and other merch that people buy because they’re lifelong sports fans. It fuels a lot of irrational, obsessive behavior. And then again, so does gambling.

So you can understand why it was very tempting, over time, for the leagues to flip-flop and come around on that. But the Senate and the House held these really robust hearings to evaluate the threat of gambling, the benefit that state-sanctioned gambling might pose. And it was just so striking, to me, that they laid it all out on the table in the early ’90s, and then fast-forward: 25 years later, there was really none of that. It was just, Okay, let’s cash in.

Demsas: So Nevada, you mentioned, has always been exempt from PASPA. What has been their experience?

Funt: Around the ’50s, when casinos were taking off in Nevada, sports betting was sort of an amenity, kind of like an all-you-can-eat buffet, you know? It’s just one more thing to draw people in so that they go to the table games and the slot machines that really make money. So in a lot of ways, sports betting was an afterthought.

And yet, many of us thought, If we ever wanted to bet legally on sports, that’s the place to do it. So people would schedule March Madness trips to bet on college basketball, or they’d go during the Super Bowl to bet on that. So it was a pretty big draw, but it was also very marginal in terms of the bottom line for Nevada gambling operators.

But gambling on sports still existed well beyond Nevada in the U.S., because there’s this thriving black market. And one of the big arguments for legalization, just like with cannabis, was, People are going to find a way to do it, so let’s bring it above board, tax it, implement consumer protections. And at least that was a pretty convincing argument in favor.

Demsas: You mentioned the Supreme Court decision, Murphy v. NCAA. That’s the Supreme Court decision that basically strikes down this federal ban. What was the legal argument at issue there? Why did the Supreme Court find that the federal government cannot ban sports betting?

Funt: So crucially, they very explicitly said they can ban sports betting—they had just gone about doing it with a defective bill. So naturally, Supreme Court decisions tend to get oversimplified in the public conscience, but this one is so crucial because sports betting’s advocates took the decision and said, Aha! The Supreme Court has given the green light for sports betting or okayed sports betting.

Really, the case turned on a fairly obscure Tenth Amendment concept about states’ rights. And sports betting was the focus, but it was also kind of beside the point. So New Jersey said that what the federal government has done, in essence, is said, We want to ban sports betting, but we don’t want to regulate it. So we’re going to commandeer the states to do the federal government’s bidding. If they had legalized sports betting before 1992, that’s grandfathered in; it can remain on the books. If they hadn’t, they’re prohibited from changing their mind and legalizing it.

So this argument before the Court wasn’t, Should the federal government be allowed to ban sports betting? It was, Should they be able to tell the states that if they have an existing law, they can’t change it? And, you know, it sounds like the most thrilling Supreme Court oral argument. It was actually pretty dry because it’s so obscure in that way. But the effect was to overturn this ban that had been on the books for a quarter century.

Demsas: What was the state interest in legalization? This is Murphy v. NCAA. That’s Governor Phil Murphy of New Jersey, a Democrat. Why was he so hell-bent on taking this on?

Funt: The funny thing is: It was really Chris Christie, his predecessor, who was hell-bent on taking it on, and it really annoys Christie, who views bringing sports betting to New Jersey as one of his crowning achievements. It pains him to this day that the title of that case was updated to reflect Murphy because he took office before the decision came out.

But they had this long-standing economy, mainly in Atlantic City, that was really struggling. They looked at Nevada and were quite envious that sports betting brings people to the state around these major sporting events, year after year, and they said this would be a way to revitalize Atlantic City.

So the argument they brought to the Court wasn’t, Let’s have online sports betting across the country. It was, Let’s have in-person sports betting in these casinos in Atlantic City to jumpstart this ailing economy. As you can imagine, after that, all these states said, Hey—we also could use a lot of tax revenue and jumpstart our economies. Especially during COVID, when so many states were facing pretty dire budget deficits, they said, This is a fairly easy way to snap our fingers and have access to this influx of cash.

And that tends to happen a lot with gambling—is you’re facing some sort of economic or state budgetary issue, and this is a quick fix. So once New Jersey did it, and Delaware and Pennsylvania and a number of other early adopters, there was this ripple effect, where states look to their neighbors and say, Hey—they’re making money off this. We feel like chumps because we’re not. Let’s get on board. And the bandwagon really got off and running.

Demsas: So one thing that’s interesting is that—I’m confused why there’s been such a big focus or why sports betting has been so central to this story, when it feels like all types of online gambling are legal in lots of places now. So can you help me understand why that’s been so front and center?

Funt: I mean there’s so many video games or phone-based apps where it’s like, Hey—do you want to buy some tokens with real money? And then you’re playing with tokens, and then you convert the tokens back to real money, so it’s very sly.

There’s this whole phenomenon of what are branded as sweepstakes, where it’s essentially a loophole to allow people of all ages to risk money on sports, but it’s not called gambling. And you might remember: There’s a long history of things finding loopholes to offer gambling by a different name, most notably the whole daily-fantasy-sports boom that paved the way for sports betting.

So you’re right. It is part of a wider phenomenon. It’s interesting that true online casino gambling, like slots and roulette and poker, was predicted to follow from legal sports gambling. That was what a lot of these companies were banking on. And although about a half dozen states have legalized it, it hasn’t caught on quite as quickly as some of their investors’ hopes, and we could get into that.

Demsas: Yeah, why not?

Funt: The main reason is that the brick-and-mortar casinos think it’ll cannibalize their business, that if people can bet on those games on their phones, they’re not going to bother to make the trek to a retail casino to do the same thing. So I still think that’s going to be in the headlines a lot in the coming years, as states look for more ways to bring in tax revenue.

But to your question about why sports betting seems so dominant, part of it is just: The advertising is unbelievable. These companies are spending billions of dollars every year to get it in front of potential customers in as many ways as possible. As you were saying, you see it on the train. Same here in North Carolina. Billboards, signs downtown—everywhere you look there’s an appeal to get you to start betting on sports, not to mention all the TV ads. So the marketing is just overwhelming.

And then beyond that, it is startling, in that this was seen as something that was done in the shadows, and now it’s so mainstream and really being rammed down people’s throats in a way that a lot of people are quite concerned about.

Demsas: So what is the landscape now, right? Like, after Murphy, states had to pass their own legalization schemes. Right now, D.C. and 27 states allow online sports gambling, and there’s some regional concentration here that I thought was interesting—basically, the entire Northeast and the mid-Atlantic, as well as the Midwest. But lots of the South hasn’t. The Pacific Northwest hasn’t. California and Texas haven’t. What kind of explains this regional variation?

Funt: I think in the Northeast, state lotteries are so deeply rooted. Massachusetts, for example, has the highest-grossing state lottery per capita. So I think it’s easier to transition people into a new form of gambling. In a lot of parts of the country, like California and Texas, tribal interests are so powerful—they’re resisting anything that would threaten their business. In parts of the South, there’s a strong conservative Christian aversion to gambling still, although I think that’s dissipated a lot from one of the main reasons why the country didn’t adopt more gambling sooner. So yeah, it’s a lot of cultural and political reasons.

Demsas: One story of yours really kind of shows how haphazard the legalization process has been. Can you tell us about the Abunai gambler in D.C.?

Funt: Yes, so as you mentioned, D.C. is one of the places that legalized sports betting. Like many places, they did it quite hurriedly and sort of made things up as they go. And one interesting decision the D.C. government made was to have a city-sponsored sports-betting operation, as opposed to letting these companies like FanDuel and DraftKings run the show. So you could bet through those companies at stadiums and arenas, but if you are out and about on your phone or at a lot of these betting terminals in cafés and restaurants and bars, you are betting with a city-sponsored sportsbook called Gambet[DC].

And these terminals—they sort of look like ATM machines. They popped up all over the place, including at this tiny poke shop called Abunai. And one of the interesting things about betting terminals that professional gamblers were quick to pick up on is: Unlike if you’re going to a brick-and-mortar sportsbook, where you give your ID and they pay close attention to who it is betting, you bet anonymously through these terminals. So if you’ve sort of cracked the code and figured out an edge, you can bet anonymously, basically limitlessly, through these terminals and make a killing.

And this one guy found deficiencies in the odds in this poorly run city-sponsored sportsbook. It’s kind of incredible how bad the odds were compared to the rest of the market. Like, it didn’t take a genius to pick off vulnerable games to bet on. So he just finds a list of places in the city that have these betting terminals. Abunai was the first alphabetically on the list. So he says, Okay, great. They have a nice owner and staff, who didn’t mind him basically turning it into his home office.

And day after day, he would just dump cash in this machine and bet as much as he could—so much so that it swung the entire city’s betting numbers so that an overwhelming amount of money was being bet through this one store. He was winning so much that the entire city-run sportsbook was net negative for an entire month, which is unheard of. We all know the house always wins. D.C.’s sportsbook was run so poorly the house lost, in a month.

Demsas: How does that happen? Like, what is going on there?

Funt: So basically, sports-betting odds are often like efficient markets. So just like it’s really hard to beat the stock market, it’s really hard to beat who’s gonna win, you know, a football game or a basketball game, over the long haul, because, basically, the world’s collective wisdom is informing the spreads and the odds on these games.

But the people who are running Gambet[DC], this D.C. sportsbook, were very slow to update the odds. Sometimes, they would just have errors in how they input the information, so they just clearly have the equivalent of a typo in inputting the odds. Just not a lot of oversight. Even though it’s a pretty airtight business, you still need a lot of smart people running it and automation to manage it.

So this guy just picked off all these bad lines and bad odds. And statistically, he gained the upper hand, because if Gambet[DC]’s odds are way out of sync with the rest of the market, chances are the rest of the market’s right.

Demsas: So you literally just have to look at what the market is telling you, what the odds are in other places, and then just go sit down at Abunai Poke and just say like, All right, looking at my phone, what’s going on, on DraftKings or whatever, and then just do that.

Funt: Precisely. He was betting on sports that he didn’t follow at all. He had no expert insights into them. It was just, A respected sportsbook has the odds at this number. Gambet[DC]’s are off in this way. I’m gonna err on the side of the respected sportsbook and bet against Gambet[DC]. And it was hugely profitable, at least as long as he got away with it.

Demsas: Do you know how much money he made?

Funt: Yes, so thanks to some public records that were turned over, only over the course of three months, he profited more than $400,000—pretty unheard of, even for an incredibly successful bettor. That rate of return is just remarkable.

Demsas: Wow. So I went down a rabbit hole, when I was researching for this episode, about American history on sports gambling. And I did not know the role of Attorney General Bobby Kennedy—the OG Bobby Kennedy—his crusade against sports gambling. And learning that, kind of in the middle of the 20th century—you touch on this a little bit, but—that the real focus on outlawing sports gambling was about combating organized-crime syndicates.

Bobby Kennedy wrote an article in The Atlantic in April 1962 about this issue. And just quoting from it:

As I sit down today to write this article, a business executive with an industrial firm on the Eastern seaboard is telephoning a bookmaker to place a fifty-dollar bet on a horse race; a factory worker in a Midwestern town is standing at a lunch counter filling out a basketball parlay card on which he will wager two dollars; a housewife in a West Coast suburb is handing a dime to a policy writer who operates a newsstand as a front near the supermarket where she shops.

These people, and millions like them who follow similar routines every day, see nothing wrong in what they are doing. Many of them can afford the luxury of this type of gambling. They look upon it simply as taking a chance.

He continues:

But they are taking a chance which the nation and its economy cannot afford. They are pouring dimes and dollars day by day into a vast stream of cash which finances most illegal underworld activities. The housewife, the factory worker, and the businessman will tell you that they are against such things as narcotics, bootlegging, prostitution, gang murders, the corruption of public officials and police, and the bribery of college athletes. And yet this is where their money goes.

So I did not have a sense that this was a big part of the modern conversation around sports gambling. Is this kind of resolved, or are we still worried about gambling, kind of, going to these underworld activities?

Funt: Yeah, first of all, it’s a great article you turned up. I’m excited to find it myself and read it. That was definitely one of the arguments for legalizing sports betting around 2018, after that Supreme Court decision, because a huge amount of money was being bet through offshore sportsbooks that operated illegally online, taking tens of billions of dollars in wagers from Americans. And there was some evidence that the criminal syndicates that were operating those sportsbooks did a bunch of other criminal activity.

So just as RFK was saying, you’re, in effect, patronizing those sorts of criminal activities. That’s not always the case. Some of them were just Americans who were bookmakers in the U.S. and got tired of getting arrested, so they went to Latin America and set up websites where they could take bets. It wasn’t quite as sinister as that. But at least as the argument went, it was a real boogeyman, that you’re funding criminal organizations, and, Why not fund taxed, legitimate companies by making this legal? So yes, that was definitely a significant argument.

And I think as far as that kind of conscious capitalism goes, well, the sportsbooks that operate today definitely aren’t, you know, also selling drugs and prostitution and all those things. There definitely is some hand-wringing among people of, Does gambling exploit vulnerable people? Do we know that this is making problem gambling more prevalent? And by betting safely, are you still, in effect, funding companies that take advantage of people? So it’s not quite as potent as the argument RFK laid out, but it’s definitely still relevant.

Demsas: And what has the impact been on legalization? Has legalization reduced off-book gambling. Can we even really measure that?

Funt: So you’re right. It’s impossible to know exactly how much gambling is going on under the table. It always has been. I think some of the estimates were inflated to make the argument seem more convincing, but it by no means has eliminated it or even put the dent in it that a lot of the advocates for legalization promised.

Again, in 1992, they looked at all these different types of cause-and-effect things to think about, and one of them was: If you legalize an illegal activity, do you snuff out the black market, or do you just grow the pool of people doing it and, in fact, actually convert some people who might not have been doing it, who are then going to look to the black market, for a variety of reasons? So when it comes to sports betting, yes—there are definitely those offshore, illegal sportsbooks that are hurting because of this.

But there are also people who took up sports betting because they saw ads everywhere and all these generous new-customer offers and started legally, and then they said, Hey. There’s a bunch of different reasons why betting illegally might be advantageous. Maybe I don’t want it showing up on my bank statement. Maybe I don’t want my winnings taxed. Maybe I want to be able to bet much more illegally than you’re able to do so legally, if I’m a winning bettor. So yeah, in some respects, it’s put the offshore business on the ropes, and in other respects, it’s sort of created a funnel of new customers for them.

[Music]

Demsas: After the break: what’s gained and what’s lost in states where online sports betting is legal.

[Break]

Demsas: I want to delve into the welfare harms of people who are engaging in sports gambling. But before I do that, I think because of your articles and a lot of other arguments being made and research coming out, there’s a growing narrative about the potential mistake that this was in legalizing gambling. But I think that can be helpful to go back and think in the minds of states who were interested in legalizing gambling. What was going on with them? Like, how much money are they actually making off of this? And what sorts of things is it going to?

Funt: Yeah, that was definitely the No. 1 argument, was, Hey. Let’s just bring in more revenue without taxing people—always, you know, a strong selling point for at least some people.

So whether tax revenue has exceeded or failed to meet expectations varies state by state. In total, since that Supreme Court decision and all these states started legalizing, a little more than $7 billion has been raised in taxes from sports betting for state governments. It’s important to note that $2.6 billion of that has gone to New York State alone, the largest legal sports-betting state, which also has the largest tax rate, so they’re just getting an epic windfall compared to the rest of the country.

Many states simply send the money to their general fund. Some states, like Colorado, specifically earmarked it—in Colorado’s case, for water-conservation issues. But you know, tax revenue is definitely a worthwhile thing to look at, but it’s not the whole picture. I think it’s appropriate to look at a more holistic view of, Sure, states are generating this money, but it’s not like loose change they’re finding in their couch cushions. This is coming from somewhere. It’s coming from their constituents.

We know gambling is, in many respects, kind of a regressive tax in that it, you know, pulls money from a lot of vulnerable people, as opposed to a more progressive tax that proportionately takes from people who can afford to lose. And that’s why some states, like Washington State, have been much more restrictive in the way that, yes, they’ve legalized sports betting, but you can only do it on the grounds at tribal reservations. So their idea was, Let’s give a boost to tribal economies, but we don’t want to depend on revenue from gambling to fund our state’s growing needs. We’d rather do that through progressive taxes, more sustainable, healthier for our society, something that definitely not all states have taken into account.

Demsas: I have seen a lot of that research around the regressivity of these sorts of tax revenues, but I was surprised with sports betting. And there was a Pew poll looking at the demographics of people who engage in sports betting. And they don’t really find any significant differences in educational attainment or household income. They see that men are more likely than women to say they have bet on sports, and adults under the age of 50 (when compared to those over 50), and Black Americans and Hispanic adults are more likely than white and Asian American adults. But I’m surprised that there’s not more of a difference in household income here.

Funt: You’re right. In some respects, I think sports bettors skew a little bit more middle class and well-educated, compared to other forms of gambling. But when we think about the regressivity of it or just whether it’s the healthiest way for society to generate money, it’s not just that the poor are the ones doing the gambling. It’s also—think about that people with gambling problems are, in many respects, these companies’ best customers. They’re losing such a disproportionate amount of money, compared to the rest of the clientele.

Are we comfortable generating money on the backs of people who just find this ruinous, in a lot of ways beyond financially? So that, I think, should give people pause. But you’re right—for a lot of cultural reasons, the people who bet on sports tend to be much more middle class than the people who, say, do scratch-offs or play the lottery.

Demsas: So I want to now turn to all of the harms that have now become evident over the past several years. Can you walk us through the financial impacts of gambling? What are we finding about the legalization of sports gambling on the impact on households’ financial well-being?

Funt: Yes. So last year, I’d say two of the most-buzzed-about studies that came out on that topic—one of them found a direct correlation between states that had legalized sports betting and a demonstrable impact on credit scores and other measures of financial health. A similar study, also last year, found that household savings go down in places where sports betting is legal. So you are seeing a demonstrable impact on people’s financial well-being as a result of the availability of sports betting.

Part of what I find, honestly, quite frustrating about the way this has played out in the U.S. is it’s been treated like this experiment where, We’re entering an uncharted territory. We’ll see how it goes. We’ll discover things. Like, Does this hurt people financially, or does this create a public-health problem that we didn’t anticipate? There’s a whole bunch of countries that are far ahead of the U.S. in terms of legalizing, and there’s a vast body of research that looks at the consequences. This didn’t have to be this shot in the dark for the U.S. We could have looked at Europe and Australia and Latin America and Asia and a lot of other places that are farther along and have had to reconcile the consequences of making gambling so accessible.

So in the U.K., for example, where online gambling was legalized in 2005, one study recently found that Brits lose about £5.5 billion every year betting online, which results in lost economic activity of £1.3 billion. The government estimates conservatively that gambling-related health consequences cost the population more than a billion pounds every year. And again, the people who did that study said: If you actually look at the second- and third-degree consequences, on a mental-health level and all the family trauma that it causes, it’s probably much bigger than a billion pounds, but we can safely say that.

So yes, again, the evidence is starting to trickle out in the U.S., but it’s been there overseas, and I think it’s pretty irresponsible that the states that were establishing regulations didn’t heed those warnings before getting this off and running.

Demsas: Yeah, I mean, I want to underscore this. I can imagine someone going like, All right, someone is going to, you know, buy some bad fast food out there rather than cook, or they might gamble on some sports. These are all just consumption, and they’re different levels of bad, but is it really that big of a deal?

You know, one of the studies you referenced, a Northwestern University study by Scott Baker and his co-authors—they’re finding that it’s not just displacing other gambling and consumption. People are falling into debt over this. So for every dollar spent on betting, households are putting a dollar less into investment accounts. You’re more at risk of overdrafting your bank account, maxing out credit cards.

And these effects are strongest among households that are already kind of financially precarious. Charles Lehman actually wrote a great article about this for us in The Atlantic. And this is not a situation, I think, where it’s, you know, We’re just getting money reallocated from other places. People are experiencing a lot more debt delinquency over this.

The other study that you referenced, the economist Brett Hollenbeck at UCLA and his co-authors also find, similarly, that the increase of the risk that a household goes bankrupt [goes up] by 25 to 30 percent. I mean, these are really big numbers that we’re seeing here. And can you just walk us through this kind of gambling addiction? Is this a situation where it’s a very small number of people who are getting addicted, and that’s what’s driving these stats? Or are large shares of Americans experiencing financial precarity here? What do you think?

Funt: Right. So the rate of problem gambling is definitely increasing. So for a long time, it was perceived that about 1 to 2 percent of the population is prone to problem gambling. In states that have had legal sports betting and other legal online gambling for a while, they’re seeing that rate closer to 6 or even 8 percent, and it’s even higher among young men, who are often the target audience for sports betting.

But I think it’s important to look beyond problem gambling. Even though those numbers are quite alarming, it can sort of make it seem like a marginal issue. Like, As long as I’m not in that sliver of the population, I’m good. I think that those sorts of consequences that you were describing go beyond people who have diagnosable problems.

So I find quite striking or even alarming the explosion of gambling among college students. And there was a survey recently that found that one in five college students who bet on sports dips into their tuition funds to fund their betting. So obviously, fewer than 20 percent of college students have gambling problems, but you’re still seeing people affect themselves financially because of their betting. So it’s a vast problem, and it’s an under-researched area.

It’s also something that is a developing story. So you’re not going to get a full picture out the gates. Gambling disorder, unlike some addictions where you might experience something once and become hooked on it—that can happen with gambling, but—it’s often a progressive disorder, so it can take several years or even longer to develop a problem. So if you think about it, we’re really in the early innings of this. And that sort of data and that sort of picture of how this is affecting society as a whole is still going to be emerging in the coming years.

Demsas: And, I mean, you talked a little about the mental-health impacts of gambling addiction here, but there was a paper that came out recently—it’s actually what spurred me to want to do this episode with you—about domestic violence. Can you talk to us about what that found?

Funt: Yes, it’s one of those things that’s terrible but, honestly, not totally surprising—that, again, you can see a correlation between the states that have legalized sports betting and those that haven’t, and when people lose bets, they’re more prone to commit acts of domestic violence.

There’s, similarly, a correlation, in that same respect, where sports betting is legal and higher rates of binge drinking. So you can think about it either fueling or just coinciding with a lot of other problematic activity. And it’s why, to really take stock of what this means for society, you’ve got to look at the bigger picture, not just some of these raw numbers that are thrown in our faces all the time.

Demsas: Yeah, I mean, I think that most people have probably heard there’s an older study that’s not about sports betting, but it’s just about, you know, an NFL home team’s upset loss can cause a 10 percent increase in the rate of at-home violence. This is a famous David Card study.

And the thing that I think is really interesting about the Card-Dahl study is that when we’re talking about upset losses—these are, like, unexpected losses, when the home team was predicted to win, and then they lose—you would think, Oh well, maybe in the states where there was an upset win, when the home team was predicted to lose and they actually win, maybe you see a decline in domestic violence, but that doesn’t happen. There’s basically an asymmetry here—

Funt: Oh gosh.

Demsas: —in the gain-loss utility function. So it’s like: You’re actually just gonna get more domestic violence. You’re not gonna even it out or something like that. And that, I think, becomes a really big problem when you are thinking about this paternalism issue here, because I can imagine people hearing this episode are just like, Yeah, this sounds really bad, but do I think the government should be in charge of banning something just because people are making bad decisions?

The downstream effects here are what I think are really convincing. You know, no one consents to having domestic violence happen to them, obviously, ever. But that that might increase as a result of someone else choosing to bet on sports seems, you know, even beyond the pale.

Funt: Yeah, absolutely. I think this debate often gets reduced to, Should this be outlawed, or should it be legal with hardly any restrictions? And I think it oversimplifies the argument, and it—we’re really past that. I don’t know how many states that have legalized it are going to go ahead and say, This was a mistake. Let’s outlaw it.

But there’s such a spectrum within that dichotomy, of: Should there be restrictions on advertising? Should there be restrictions on the enticements for customers? Should we require affordability checks to make sure people are betting at least vaguely within their means? All these different regulations that ought to be debated instead of, Should we ban this? which, of course—you’re right—is going to get a bad reaction from a lot of people who don’t like the government overstepping in the decisions we make.

I think consumer protections were the main argument for legalization. So whether we’re living up to that promise and delivering actual protections that protect the people who were betting illegally, and now we’ve said this is a safer way to do things—that, I hope, is where the conversation goes.

Demsas: I actually was surprised. I was trying to look up what people actually want to happen with legalization here, and I was shocked. Only 8 percent of people—there’s a Pew poll about this—only 8 percent of people thought it was good for the country that sports betting was legal. And 34 percent said it was a bad thing. The rest said they thought it was neither good nor bad. I would not have expected that. Is that what you find when you’re reporting, that people are saying that they think it’s bad that we’re allowing this?

Funt: Yeah, I try not to put too much stock in the anecdotal. Even though I’ve interviewed so many hundreds of people for my work, I’d rather rely on an academic who’s doing a proper study.

That said, yeah, I find it interesting, not only how many average people feel that way, but how many professional bettors, who you’d think would be the biggest evangelists for legalization and defending the way they make their livelihood—a lot of them are some of the most vocal about, This has gotten out of control. It’s crazy that there aren’t more guardrails to protect ordinary people.

I even hear plenty of people who work in the industry say, States and even perhaps the federal government could be doing more to protect customers. So it’s not just casual people who see all the ads and say, Gee, this has run amok. It’s people who are right in the middle of it who feel that way.

Demsas: So you mentioned that other countries have had experiences with this as well. Are there regulations you would copy from other places that maybe can improve our situation?

Funt: Yeah, and I try not to be, you know, a public-policy advocate as a reporter, but I will just say things that a lot of people, whether they’re health experts or player-safety advocates, are encouraging to at least be debated.

So one of them is: Countries that have banned advertisements that use expressions like free or risk-free or no sweat or bonus deceptively—so they’re basically making it sound like a can’t-lose proposition, when either you can lose the money you’re betting on the bonus, this offer, or you might get a little money through the bonus, but you’re obviously going to lose money over time—some countries have tried to weed that out.

There have been a lot of countries that have restricted when and how you can advertise, to try to minimize the number of young people that are seeing gambling ads day after day. So they might say you can’t advertise during sporting events or during certain hours of the day when kids are more likely to be watching TV.

Affordability checks are a polarizing one because that does tend to feel quite paternalistic, but in a lot of the places that have imposed those, the thresholds are sky-high. They’re not telling you, You should spend your money here or there. They’re saying, If someone’s spending hundreds of thousands of dollars within a day of signing up, maybe you ought to check in and see if they can afford to be doing that—things that are a lot more palatable than you might think when you hear a phrase like affordability check.

So there’s so many different reforms. Another one that is getting a lot of buzz at the federal level is this idea of a national self-exclusion list. So one thing that’s quite helpful for people with problems is they say, I’d like to cut myself off from gambling, to remove that temptation. But currently, let’s say I live in New Jersey—I can do that in New Jersey, but if I drive 15 minutes into New York or Pennsylvania, that exclusion doesn’t apply in those states. So it’s enormously tempting to do that. It might make sense to have a national self-exclusion list. So operators that are functioning across state lines have to honor exclusion, no matter where you are.

Things like that, again, it’s not about, Should we outlaw this? or, Should we backpedal on the decision to legalize? There’s this whole host of consumer protections that might be worth considering.

Demsas: Yeah, one thing I’d heard talked about is also not allowing people to make bets with credit cards, such that you have to have the money, so you can’t run up these large bills that you literally cannot pay back. And it seems like something about allowing it everywhere you are is a problem, right?

There’s a level to which I don’t know that we’re putting the genie back in the bottle on online betting, but the idea that you can pull out your phone at any point when you’re stressed out, that you don’t have to go somewhere, seems like a problem. And maybe creating some sort of temporal bounds, like maybe you can’t do it on college campuses or something like that—you can’t do it in schools in general, or you can’t do it at bars or something—you know, that might create some backlash here, but it indicates that, you know, there are ways to reduce the problem here.

Funt: You’re right that you have to use geolocation when you use these apps so that they can tell that you’re in a legal betting state, and it’s extraordinarily precise and effective. So if you’re in D.C. and you go into a federal building, suddenly your sports-betting app no longer works. It literally, like, works if I’m in a yard within the okay zone versus the not-okay zone. It’ll pick up on that.

There’s a state delegate in Maryland named Pam Queen, who’s also a professor at Morgan State University, who had the idea of: We could use this to either ban sports betting on college campuses or do something even more modest, like ban it in classrooms or in underage dorms or dorms during certain hours. The possibilities, as you were saying, are limitless, and it doesn’t have to be as severe as, you know, You can’t bet at a stadium or at a bar. It could be things that I think most people would agree sound appropriate, like, You shouldn’t bet in a freshman dorm or, you know, during class.

So yeah, that is a really potent tool that hasn’t caught on anywhere, but I think she and other people are going to be pushing for that.

Demsas: I then also want to ask you about your experiences interviewing legislators. So there are a lot of legislators who are involved in this effort, a lot of governors who have signed bills to allow sports betting or to allow online betting in their states. Have you talked to anyone who’s exhibited any kind of concern with how things have gone?

Funt: Buyer’s remorse, in some cases. Most notably, I’d say: I interviewed Charlie Baker, the former governor of Massachusetts who signed the bill legalizing bookmaking there in 2022 and then a few months later became president of the NCAA and has become a really vocal champion for limiting the amount of betting on college sports, particularly in light of the brutal harassment that college athletes and coaches get whenever their performance costs someone a bet.

It’s honestly horrifying, the sort of stuff they see on social media and in real life. And he has said point-blank, I wish, in hindsight, this had stayed in Las Vegas. As you were saying, it’s pretty commonsense that if you can bet from literally anywhere at any time of day, that’s gonna be quite a different situation than if you have to go to a casino, or even go to Las Vegas, in order to bet—or hunt down a bookie and find ways to bet through crypto or other sort of sketchy things that a lot of people are uncomfortable doing.

The idea that you can swipe to deposit money on your phone and then tap a couple of times and bet limitless amounts at any time of day is such a game changer. He was saying, We didn’t really process what a difference that would make, and I wish we had. So yes, he’s maybe the most forthcoming about that, but there are a lot of lawmakers who are seeing the fallout, in a lot of different respects, and saying, Maybe we need to re-regulate, as a lot of the rest of the world has decided is appropriate.

Demsas: Well, Danny, always our last and final question. This has been an episode chock-full of ideas that were good on paper. But what is an idea that you had that you thought was good at the time but ended up being only good on paper?

Funt: All right, so I was living in New York after college. I had a tiny balcony. I went and bought seeds to grow. I think it was, like, cucumbers and basil. And I was getting breakfast with my buddy Brian, and I was like, Dude, you will not believe how cheap these seeds are. We could totally grow vegetables and herbs and whatever else and sell it, and the margins would be crazy, and we’d make a killing. And he was like, So your business idea is farming? And I was like, Touché, Brian. You’re right. This is maybe not the most groundbreaking business idea. So he set me straight on that one.

Demsas: Oh my gosh, you didn’t live out—I actually, so my first house when I moved out of college was this group house, and we had the idea to farm some vegetables for the house, and it was successful in that we had some kale and sweet potatoes. But I have never in my life been like, I am never getting my food from my own labor. Like, this is just never happening again.

Funt: Oh, yeah.

Demsas: It’s a lot of work, and I feel like it caused so much strife in our household, too, because people were like, Who’s gonna harvest? What do we do with all this, like, extra kale now that no one wants to eat, because we have 20,000 bushels of kale. And you’re just, like, giving it away. But I’m glad that you did not actually have to execute your good on paper idea. You just figured it out beforehand.

Funt: I liked it, the basil I grew, but it wasn’t scalable. Brian was right.

Demsas: Danny, thanks so much for coming on the show.

Funt: My pleasure. Thanks again for having me.

[Music]

Demsas: Good on Paper is produced by Rosie Hughes. It was edited by Dave Shaw, fact-checked by Ena Alvarado, and engineered by Erica Huang. Our theme music is composed by Rob Smierciak. Claudine Ebeid is the executive producer of Atlantic audio. Andrea Valdez is our managing editor.x

And hey, if you like what you’re hearing, please leave us a rating and review on Apple Podcasts.

I’m Jerusalem Demsas, and we’ll see you next week.