Overview of The Rise of Gambling in the U.S.
This Dispatch Podcast roundtable (host: Steve Hayes; guests: Jonah Goldberg, David French, Megan McArdle) examines the rapid expansion of gambling and prediction markets in the U.S.—how they grew, why they're spreading, who benefits and who is harmed, and what role government and institutions should play in regulating them. The episode also touches on U.S.–Israel tensions over the Iran campaign and closes with a short political vignette about a pro‑vegan Texas candidate.
Who spoke and why it matters
- Host: Steve Hayes (The Dispatch)
- Guests: Jonah Goldberg (Dispatch co‑founder), David French (NYT contributor), Megan McArdle (Washington Post)
- Why it matters: Legalized, mobile, and advertising‑driven gambling has shifted from discrete venues (Vegas, Atlantic City) to always‑on apps and prediction markets (e.g., DraftKings, FanDuel, Polymarket). That raises public‑health, sports‑integrity, insider‑trading, media‑influence, and national‑security issues.
Key points and takeaways
- Massive growth: Reported legal U.S. sports betting rose from ~$4.9B in 2017 to at least ~$160B recently—an enormous increase driven by legalization, apps, and promotion.
- Why it spread:
- Ease and constant availability via phones and apps.
- Real‑time/prop betting creates a “slot machine” effect during live events.
- Heavy promotion, sponsorships, and financial incentives for media and publishers.
- Behavioral concerns:
- Fun for most, addictive and destructive for a minority (pathologies similar to other vices).
- Lack of social/institutional “friction” (instant bets, push notifications) accelerates harm.
- Sports integrity and corruption:
- Prop bets and ubiquitous wagering raise cheating and match‑fixing risks; arrests and investigations already exist.
- Prediction markets (Polymarket, etc.):
- Can aggregate useful information (political odds), but pose acute insider‑information and manipulation risks when payouts are large.
- Example abuses include improbable accurate bets on halftime guests or Maduro capture—suggesting insider involvement.
- Threats to journalists and coercion to influence market resolution have already been reported.
- Legal and regulatory gaps:
- Insider‑trading law and enforcement are muddled; prediction markets likely to face new legal scrutiny (SEC, Congress) after high‑profile scandals.
- Congressional inaction and lobbying allowed gambling’s spread; some argue this was cowardice or regulatory failure.
- Comparative lens:
- Some panelists compare gambling to alcohol: widespread, harmful but socially tolerated. Others say this analogy is limited because the frictionless, hyper‑targeted nature of modern apps is new.
Notable examples cited
- McKay Coppins’ Atlantic project: given money to gamble for a year; personal account shows how quickly users can lose small promotional credits and why the design hooks casual fans.
- Polymarket bets: wagers on celebrity Super Bowl appearances, Trump/AIO podcast statements, Iran strikes; one bet of ~$900K on Iran initiating strikes (and subsequent reported threats to a journalist).
- Media and money: major publishers and platforms selling or accepting large ad deals from betting/prediction firms (e.g., Substack/Polymarket offers to writers).
Policy, law, and institutional concerns
- Insider trading & prediction markets:
- Prediction markets can be exploited by insiders who can profit by betting on outcomes they help create.
- Expect legal reactions: extension of insider‑trading rules to prediction markets, bans for government employees on betting about outcomes their office can affect.
- Possible regulatory measures discussed:
- Add friction: ban in‑game/live betting (allow only pregame bets).
- Caps on monthly betting amounts per user.
- Uniform betting limits (to prevent operators from throttling sharps while exploiting casual bettors).
- Strong enforcement against threats/coercion and inclusion of prediction markets under existing securities/insider trading frameworks.
- Ethics rules limiting media and government employees from promoting or betting on markets tied to their work.
- Market/industry self‑policing: prediction platforms will likely enforce bans and lifetime exclusions for cheating or violent coercion once incidents become high‑profile.
Diverse viewpoints from the panel
- David French: Gambling is fun but widely addictive; spread happened quietly and quickly; Congress failed to respond; prediction markets are a grave concern (insider/ethical risks); favors prudent regulation.
- Jonah Goldberg: Predicts gambling will “end disastrously” for many; stresses corruption of sports and erosion of friction; open to regulation like banning in‑game betting and monthly caps.
- Megan McArdle: More sanguine—many bettors are casual and comparable harms to other consumer expenditures; expects society to adapt and new social norms to limit damage; nonetheless supports targeted regulation (friction, caps, expanded legal tools) and notes differences between harms of various vices.
Iran & U.S.–Israel tensions (brief summary)
- Discussion focused on diverging objectives:
- Israel appears to favor a more expansive aim (regime change/forceful disruption).
- U.S. (under Trump) has signaled desire for a quicker, more limited end to the campaign.
- Example: Trump publicly blamed/unclear reaction to an Israeli strike on Iran’s gas field—interpreted as political maneuvering and evidence of frictions.
- Panel consensus: different national interests/incentives exist; war outcomes and domestic politics (Trump’s volatility/self‑interest) complicate strategy.
Short political item: “Not Worth Your Time” — James Tallarico (TX)
- A resurfaced 2022 clip shows Texas Democratic candidate James Tallarico boasting his campaign became “non‑campaign” and only buying vegan products—used by panelists to discuss electability.
- Panel view: In Texas, such talk invites caricature and can be politically damaging; campaign responses (staged “meat” photos) may be too little too late. This anecdote is an example of how tone and symbolic signals can matter in politics.
Recommendations and “what to watch”
- Short-term:
- Watch for legislative or SEC action to cover prediction markets and insider‑trading analogues.
- Expect bans/limits for government employees and more platform self‑policing after scandals.
- Media outlets and publishers should disclose gambling revenue and consider conflicts of interest.
- Medium‑term:
- Monitor policy proposals: bans on in‑game bets, monthly caps, stricter age/ID controls, mandatory cooling‑off features.
- Track research on gambling’s social harms and public health responses (treatment access, education).
- Signals of escalation:
- High‑profile insider/manipulation cases, threats to journalists tied to market payouts, or proven episodes of sports corruption should trigger regulatory responses.
Notable quotes (paraphrased)
- “It’s a lot of fun for people… the prop‑bet aspect… introduces almost a slot‑machine effect.” — David French
- “The house is going to win here… this is going to end disastrously.” — Jonah Goldberg
- “Prediction markets can be useful…but we’ll need legal infrastructure to control insider and coercive effects.” — Jonah Goldberg / David French
- “$160 billion is about what Americans spend on their pets — large but not necessarily civilization‑ending.” — Megan McArdle
Bottom line
Gambling and prediction markets have gone mainstream because of legal changes, mobile apps, and heavy promotion. They bring economic activity and potentially useful information, but also new forms of addiction, sports integrity risks, insider‑trading and coercion vulnerabilities, and institutional conflicts of interest. The panel urges a mix of social adaptation, platform safeguards, and targeted regulation (friction, limits, clearer legal coverage) to manage harms while preserving beneficial uses of prediction markets.
Further reading mentioned in the episode: McKay Coppins’ Atlantic reporting on his year gambling; Times of Israel report on threats tied to a prediction market resolution.