For a moment, the threat of guac-ocalypse loomed over America. Had President Donald Trump’s proposed tariffs on Mexico and Canada gone into effect, the prices of avocados and tomatoes would have skyrocketed in the approach to Super Bowl Sunday. Trump may be bluffing about his willingness to start a trade war, but the grace period he negotiated with those nations lasts just 30 days. Yesterday he said that he would announce tariffs on even more countries—he didn’t specify which—in the coming week. Soon, Americans could again be clutching our guacamole.

If the tariffs Trump has threatened do go into effect, they would quickly raise the prices not just of avocados but of strawberries, cucumbers, bell peppers, oranges, countless processed foods, and other grocery staples that are already becoming less affordable for many people. Any pain that tariffs cause American consumers would—in Trump’s view, which he boomed on Truth Social—be only a temporary bump on the road to “THE GOLDEN AGE OF AMERICA.” Implicit in that idea—and the reality of an actual trade war—is the assumption that the U.S. can make up for any lost imports on its own. Trump’s stance on agriculture is the same as his stance on everything else: “America First.”

The notion that the country could produce all of its food domestically is nice—even admirable. An America First food system would promote eating seasonally and locally, supporting more small farmers in the process. But that is not how most people eat now. Eating America First would restrict the variety that shoppers have come to expect; eating fresh blueberries year-round would be impossible. Barring the overhaul of all U.S. agriculture, it would mean a less healthy diet, too. The guac-ocalypse near miss was a reminder of the precarious state of our food system: Much of the food we want is not produced at home.

Trump’s tariffs may amount to nothing but political posturing. During his first term, he threatened Mexico with a 5 percent tariff, then backed off two weeks later. The current grace period could extend indefinitely. But an actual trade war would have a dramatic impact on the food supply. Avocados are a perfect case study. The national obsession is staggering: In 2023, the average person ate more than nine pounds of them—roughly equivalent to 27 average-size fruit. More than 90 percent of the avocados Americans buy come from Mexico; they are the nation’s top import in terms of value, Luis Ribera, an agricultural-economics professor at Texas A&M University, told me. Because they are much more expensive than, say, bananas, the effect of a 25 percent tariff (plus its associated costs) would be more significant: A small Hass avocado worth 50 cents might go to $1.50, Ribera said. Avocado-dependent businesses would feel it, too. A Chipotle representative told me that tariffs would certainly raise prices.

The America First perspective frames tariffs as an opportunity to boost domestic production. Roughly 10 percent of avocados available in America are grown here; the majority come from California, and Florida and Hawaii make up the remainder. Zach Conrad, a food-systems expert at the College of William & Mary, ticked off a multitude of reasons domestic production could not re-create our current avocado bounty. Avocados grow in too few areas of the U.S., and on top of that, they largely produce fruit only from spring to early fall. Trump’s immigration policies threaten the already dwindling farm-labor workforce.

Avocados aside, the U.S. does already produce enough food to feed itself, and then some. About 4,000 calories’ worth of food a day were available for each person in 2010, according to the USDA’s most recent estimate; that year, the average person consumed 2,500 calories a day. But food is more than just calories. The U.S. produces plenty of grains, oils, sweeteners, and meat, but far less fresh produce and legumes; in recent years, the country has become a net importer of food. “The food group that we produce the least of to meet our dietary needs is fruits and vegetables,” Conrad said. In 2022, 69 percent of the fresh vegetables and 51 percent of the fresh fruits imported by the U.S. came from Mexico. Meat, canola oil, and, uh, biscuits and wafers account for most of the U.S. imports from Canada, but 20 percent of this country’s fresh-vegetable imports come from there, too.

Theoretically, America could grow all of its own produce. But that would require a complete remaking of the food system. More land would have to be dedicated to growing fruits, vegetables, and nuts, and less of it to grains and sweeteners. It would also mean addressing labor shortages, increasing the number of farmers, finding suitable land, and building new infrastructure to process and ship each new crop.

Every one of these issues is incredibly complex. Many fruits and vegetables are so delicate that they must be harvested by hand, so machines can’t supplement human labor. A wheat farmer can’t just switch to growing tomatoes; specialty crops—a category that includes any fruit, vegetable, or tree nut—require specialty knowledge as well as specialty equipment, which can cost millions. Solving all of these problems—which would likely be impossible—would take many years, Conrad said.

Cutting off Canada would have subtler but no less extensive effects than abstaining from Mexican produce. Grains, beef, and pork are produced domestically, but sourcing them abroad can be less expensive, Chris Barrett, a professor who specializes in agricultural economics at Cornell University, told me. Demand for beef on the West Coast of the U.S., for instance, can be cheaper to fulfill from the Canadian prairies than from an East Coast packinghouse. Canada’s other big contribution to the American diet is canola oil, which is produced stateside in relatively small amounts. The ongoing campaign against seed oils, led by Robert F. Kennedy Jr., may claim that Americans would be better off without canola oil, but for now, America runs on processed food. Without cheap canola oil from Canada, many frozen foods and packaged goods will cost more. “That excellent ratatouille you get in a can, even if you think it’s healthy, probably contains a bit of imported oil. It’s going to get priced up, ” Barrett said.

The problems with an America First food system wouldn’t just be about cost. It would lack diversity: There would be no tropical fruits such as mangoes and coconuts, and far fewer specialty varieties, such as Sumo Citrus and Meyer lemons, because domestic growers would have to focus on the basics. Given the current emphasis on meat, grains, and sweeteners,  it would encourage a less healthy diet, too. Striving toward the “Make America healthy again” ideal pushed by RFK Jr. would be made more difficult with fewer choices and higher prices. As my colleague Nicholas Florko wrote recently, people buy food on the basis of taste, convenience, and cost. America could supply its entire population with a healthy diet, as Conrad’s research has shown, but not without totally blowing up its agricultural priorities.

The notion of an America First food supply—harvesting homegrown produce, eating seasonally, supporting farmers—does align with the idea of returning to a pastoral era, which has been embraced by RFK Jr.’s supporters, raw-milk drinkers, and farmers’-market devotees across the political spectrum. “It’s a nice way of thinking about food,” Conrad said. But it just doesn’t align with the reality of how Americans currently eat. Every time we go to the grocery store, we choose from a marvelous variety of foods from around the world. A McDonald’s hamburger with fries, that most American of meals, is made with sesame seeds from Mexico and canola oil from Canada. That eating vatfuls of guacamole every year in the middle of February is a pillar of American culture is a testament to our interdependence with our neighbors.

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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.

For nearly as long as Los Angeles has been a city, the sky above it has changed colors, for short and long spells, at times portending doom. It happened again this week. Winds that would not be out of place in a hurricane roared down the western slopes of the San Gabriel Mountains toward the city. Fires ignited in the eastern chaparral foothills and along the Malibu coast. With blithe cruelty, they sprinted across the landscape, burning through thousands of homes, erasing whole family histories. In some places, they oranged the sky, and in others, they turned it beige-gray. Angelenos have by now become accustomed to spotting smoke and ash overhead during the fire season that runs from summer into fall, but not in January. To see the sun so diminished, so pale and sickly in the midwinter sky, was unnerving. It seemed like a message.

The sky over L.A. has previously contained signs, and people had the good sense to heed them. Before water from the Owens Valley was brought to L.A., and Hollywood studios began to line its boulevards, the city was dominated by more straightforwardly industrial industries. In 1903, the local oil refineries and brickyards poured so much sun-dimming smog into the sky that people thought they were experiencing an unpredicted eclipse. Steel for the Second World War was forged in L.A.’s foundries. New bombers rolled off the city’s assembly lines, and new armadas floated out of its shipyards, toward the Pacific front. People moved there from all across the world, and many bought cars. Gigantic toxic clouds started settling onto the skyline with some regularity. Some reeked of chlorine. One was mistaken for a Japanese chemical attack.

As the mid-20th century wore on, the L.A. sky began to occupy the place in the global imagination that New Delhi’s does today: It became the patch of atmosphere where one could most readily observe modernity’s drawbacks. Its mere name conjured an image of the towers downtown, massed together like giant trees but wreathed in something much less holy than a forest’s mist.

Other cities around the planet had heavy industries and daily traffic jams, but L.A.’s geography furnishes its sky with a long memory. The basin that surrounds the city almost seems designed to trap smoke; it is bordered on three sides by hills and mountains, which corral pollutants. The ocean that runs along its western edge makes things worse by sending cool drafts of air across the landscape: over the freeways, between the skyscrapers downtown, and east into the sprawl. This doesn’t mix well with the warmer air higher up in the atmosphere, and the oil-and-water dividing line between the two forms an invisible ceiling, keeping smog or smoke from drifting easily away.

[Read: It’s time to evacuate. Wait, never mind.]

People like me who grew up in Southern California didn’t like the smog. They didn’t like that it obscured the peaks of the San Gabriels. They didn’t like feeling tears forming in the corners of their eyes when they stepped outside. They didn’t like to breathe it in, and they especially didn’t like running their kids to the hospital during a midnight asthma attack. At one point, local inventors wanted to place enormous fans atop the surrounding peaks to blow it all away.

City officials sensed the public’s discontent. They had begun fighting air pollution, in earnest, in the 1950s. Industries fought them at nearly every turn, but over time, they were able to police the local refineries more closely. Some open-air incinerators stopped operating at the dumps. Lead came out of gasoline. California set the most restrictive national standards for air pollution. Thanks to L.A.’s geography, postwar population boom, and unrepentant embrace of the automobile, the city still ranks among the smoggiest in America, but its sky has become somewhat cleaner than it used to be—so long as a fire isn’t burning nearby.

The wildfire smoke that has hovered above Angelenos all week is as toxic as smog, if not more so. It’s shot through with bits of black carbon, mineral dust, and trace metals. Many of these particulates are 30 times smaller in diameter than a human hair; that’s small enough to penetrate deep into your lungs and into your bloodstream. In part to keep kids from breathing them in, the Los Angeles Unified School District closed all of its schools on Thursday and Friday. Even the Lakers, who had a game scheduled for Thursday night, were told to stay home.

Sky-oranging fires weren’t so alarming when they loomed over L.A. a few decades ago. They were rarer back then, more akin to whims of nature, like earthquakes. They didn’t suggest a new way of living on the landscape. But as human beings have heated up the planet’s atmosphere, the fires have become more regular. They have spilled out of their usual season, undoing many of those hard-fought gains in air quality, not just in California, but up and down the West Coast, and soon maybe farther afield. A message is once again flashing down from L.A.’s sky, but this time, it is one that the whole world must see. This time, it will take more than a few local law changes to clear it away.