CO-HOST | Make Money Without Losing It: The Hidden Risks of Online Gambling

0:00LinkedIn is pretty amazing at helping you grow your small business. We cannot stop your new clients from emailing you at 3am. We can help you sell, market, and hire in one place. We cannot help you be in three places at once. And while we can't help you organize your calendar, LinkedIn can help you land more clients so you have a calendar to organize. Grow your small business on LinkedIn. Learn more at LinkedIn.com, Flash Small Business. You're listening to the Travis Makes Money podcast. What's going on? Everybody, welcome back to the show on this episode. My producer is here in studio. What's up, man? Man, I'm so tired, dude. Right. Yeah. Well, I mean, I've been working at that bank. You've been working at that bank part time. Yeah. I think you're gonna have to let me go. Really? Yeah, I just don't get the job at all. I think customers will bring in stacks of cash. I'm like, I can't make sense of any of this. I like, well, that's a key part of the job, sir. You're gonna have to learn to do that. That's better.

1:00That joke's coming together. We're gonna keep workshopping it. That's the third time I've heard that. But it's gotten better each time. That is true. It's gotten better each time. I saw it actually. I knew how to go along with it a little bit better that time too. Yeah. Well, someone else is speaking out about the issues with obsession making a lot of money and some people are not making a lot of money. So I just want to start the show with another one of those. Oh, sweet. This post from John Ryan. I'm really obsessed with this topic. They are. John Ryan posted, obsession made over $500 million. John Ryan made $0. The full story. John did not work on obsession. This is important to note when understanding why of the $500 million John made $0. When you think about it makes sense, but John takes issue with this. Apparently, if you don't work on a movie, you don't profit from it. Even if you're busy making your own unrelated movie, in my opinion, this needs to change. Oh, that was pretty good. Shout out, John Ryan. I saw the post. I was like, damn, who else got screwed over by this movie? And then I was like, oh, it's a joke.

2:02Oh, parody. That's like when I look at my body in the mirror after I work out. This is a joke. Do you see the new SNL Tucker Carlson? I did. I did. I did. I talked about obsession. I did. I liked that quite a bit. I liked it quite a bit. You know what I don't like Travis? You know what me and Sidney Swinney don't have in common? A lot. No. We're both, we're both only looked at for our looks and not our brains. But what? Oh, okay. Let's stop you for your hurt feelings. One of the things that me and Sidney Swinney do not have in common is I do not like the world of online sports betting. Mm. I'm going to take a big quick stance here, but I think it's doing harm to society. I take, take. But it's worse than we thought. That's great. It's worse than we thought. How so? You're like, I thought it was pretty bad. So we all know that online gambling is pretty bad. But there has been an investigation into draft kings.

3:04Have you heard about this? I have not. Draft kings has been investigated. People have been talked to from within draft kings. Former employees of draft kings have come out whistle blowing. Now for those of you who watch sports, whistle blowing is something that referees do. But in this case, it means they're blown lit off a really bad situation. Wow. Just to tie it up with the context. With the theme, the New York Times interviewed, you know what? Something about me? What? I pay for the New York Times. Really? I do. That's wild. I do. Great articles. I really do though. Yeah, your millennial is showing. I really do. No, I actually, I found out you can get the print edition sent to you if wherever you are. And I was like, that's actually doing so much for a newspaper delivery. I did think about it. I did think about it. Anyway, the New York Times interviewed more than 40 former draft kings employees. Because when I first saw the star, I was like, OK, one guy got fired.

4:05He's going to blow the lit off thing. They interviewed 40 former draft kings employees and reviewed internal memos, presentations, slack messages, and data from customer experiments. It's reporting focused on two things inside the company. So one of them is that in 2023, draft kings developed a machine learning model. So let me just give you a big blanket overview of this story. Draft kings was using AI to find gambling addicts and exploit the hell out of them. What? I can't believe it. I know it's crazy. Draft kings developed a machine learning model for its online casino businesses designed to predict whether an incentive would cause a customer to gamble and ultimately lose more than the cost of the promotion. And then the second is problem gambling prediction. Separate employees developed or proposed predictive models intended to spot people potentially moving toward gambling problems. According to former employees, those projects were halted or sidelined. The promotion system assigned gamblers an internal score called elasticity.

5:07A higher score meant the person was expected to lose more incremental money for each promotional dollar draft king spent. Lower scoring in elastic customers would receive fewer offers. The promotional budget could then be redirected toward more responsive and more profitable customers. So former employees told the client every business model in history. Yeah. But this is worse. It is, to me, it prompts the question of what should be done about this, like how much should freedom be infringed upon a lot in this particular case? Because it seems much less insidious when it's like you're talking about buying a pack of T-shirts or something like that. But this is what all companies do. They analyze customer data and they go, which segment of the population is more likely to spend more money with us? And how do we get them to buy our stuff? So like it's the same thing that they all do, but it just, it sounds so horrible because it has the ability to literally destroy people's lives, which is particularly insidious.

6:10That just reminded me. I saw a picture the other day. I didn't save it because there was no reason that I should have saved it. But I'm going to mention it now. It's a lot of introduction to this. But someone posted there, they're like bank help. Certain banking apps will say, you're estimated to spend this much on groceries or whatever. The most valuable workflows are often the hardest to document. When they span people, systems, judgment calls, they can stay undocumented, leaving teams, guessing, creating inconsistency and holding AI back. Well, that's exactly the problem that today's sponsor scribe was built to solve. Scribe is a specialized intelligence platform trusted by 94% of the Fortune 500. That captures workflows as work happens and automatically generates step-by-step guides with screenshots and instructions. So no one has to sit down and write documentation from scratch. Teams can review, edit, and share the guides for onboarding, training, software rollouts, and day-to-day work. Scribe also automatically redacts sensitive info like names, account numbers, emails from screenshots.

7:13You know all the stuff you don't want other people saying. And as an admin, you control and enforce that across the whole team. Once a guide is reviewed, anyone can launch real-time on-screen guidance that shows exactly where to click inside the actual tool so critical processes can get done right every time. And because most AI was trained on the internet, not your company's way of working, Scribe helps power your AI agents with real context, giving them a foundation built on how work actually happens, not just guesses. Learn more at scribe.how-tnm and mention Travis makes money for your first month of scribe capture free on select plans. That's SCRIBE.how-tnm. Most of us picked a bank at 16 and never looked back. Sound familiar? Well, that's where chime comes in. Chime is changing the way that people bank. They're not like traditional old stuffy banks who charge fees and gatekeep perks and rewards. Chime offers the most rewarding fee-free banking

8:14all with no overdraft fees, no monthly fees, no minimum balance fees. Plus you get 5% cash back on chime card in the category of your choice, like gas or groceries, all while building credit through regular everyday spending with no credit check. And if you're ever in a pinch, SpotMe lets you overdraft up to $200 fee-free. So join the millions who are already banking fee-free with America's number one choice for banking, head to chime. dot com slash Travis, that's chime. dot com slash Travis. Sign up now, it only takes a few minutes. Chime is a FinTech, not a bank, banking services and chime card provided by Chimes bank partners, qualifying direct deposits required, terms and limits apply. Go to chime.com slash disclosures for details. And so someone posted, I'm such a fat ass, my bank is predicting when I'll eat McDonald's and said, predict the expenses on $150.24 over the next 30 days based on your previous regular transactions. Which I thought was funny, because that is kind of the same thing. But anyway, this is a little crazy,

9:15just with how addictive gambling is and like how- Yeah, which one of those is worse for you? Right. McDonald's are gambling. And it's like so rigged against you. It's like, we know based on our data more than you do that if we give you this $20 promo, you're gonna lose $400. So former employees told the times that this was basically targeting people most likely to lose, DraftKings disputed this saying it's promotion targets customer showing sustained engage use of the platform, which I use that's kind of this great area. Rather than customers based on losses and it says the reporting does not reflect its approach to promotional investment. The article also places this system in a rapidly expanding gambling market. DraftKings grew to 11 million customers from 5 million in 222. It brought in roughly 8.2. So what's the time on there? So in 222, they had 5 million customers at the beginning of the year, they got to 11 million customers at the end of the year. Holy shit. I thought you were saying there was like 5 million to 11 million from 2022 to now. No, no, no. Wow. Yeah, it brought in roughly $8.7 billion

10:15in gross revenue from sports and casino customers in the prior year and gave out about $3 billion in promotions, according to citizens bank research cited by the times. So that's pretty sad. It's the biggest legal scam ever. I mean, I say this as somebody who played Blackjack last night. But they were to say someone who grew up in fundamentals for low-income. No. No, but it is. It's a lot for these. It's a lot for these. It's a lot for these. Yeah. Like everybody knows that you're going to lose money gambling, but everybody does it in hopes that you're going to make money gambling. Yeah, exactly. Well, hang on. You don't know. You know what's feels so good though, is when you're like... When you win. Yeah. No, when you're like... When you do gamble, I would suck if I lost this and then you don't. That feels good. And they're like, I should do this every day. I should be a professional gambler. That is truly the thing where I go. Like, I'm not somebody I gamble maybe 10 times a year. Yeah.

11:16Like Max. And it's usually because I get around people that gamble about 10 times a year. Yeah. But it's like, I really don't know anybody with... Not even gambling addicts, but like people who just enjoy gambling. I don't know how they live in Vegas. Yeah. It would be a very, very bad idea. I've never gone past a casino and been like, man, I gotta go in there. Yeah, I'm feeling the itch. Like, ever. Right. But anyway, saying, one shouldn't. You should not live in Vegas. If that's a pretty actual problem for you. Here's a couple. Because people have asked me that. Like, how do you, how do you live there, man? I'm like, you shouldn't. I don't know. I just, I'm gonna gamble every once in a while, but it's not a big deal. Well, I feel the same way, like, even with like drinking. It's like if I was a, if I was a partier, yeah, I could not live here. And I don't know how anybody does. I guess they don't for long. Yeah, right. Or they do, because they can't leave. Yeah. Or they work in that industry. Yeah. Which I feel like that has monetized it. I do feel like if you work in the industry, it should turn you off to some of that. You would think, but I guess it doesn't. I mean, I think it's a person by person thing. Because I have several, I was gonna say,

12:17I think for most people it does, but that obviously, this is just my own, and I did a little experience with friends that I know that were in that industry who did get burnt out on it. And when you started doing other things, but also I don't really know a lot of people in that industry. So there are people who've been doing it for 30 years and still do it. Hopefully, at least they're like making moves. And they become the owner of the thing at some point and they're not just, you know, I'm sure that's that happens. Serving drinks or whatever, but it seems like a wildly unhealthy lifestyle to live into your 30s and 40s. So here's a couple quotes from some former employees and people on the inside. Are you ready? One of the people, a former DraftKings data analyst, his name is Jaden Butts. I just thought I should like, you know, it is Jaden Butts. B-U-T-T-S. Yeah. Okay. The internal DraftKings, they were like, Jaden quit being such an ass. He's like, it's Butts. That's Butts to you. DraftKings lawyers are really really kick Butts.

13:18You gotta just change it. Yeah. I think, well, he actually got married to somebody and now it's hyphenated. It's Jaden Butts hold. How much ridicule would you have to endure as a child's name? Yeah, that's what I'm saying. I'm calling for Mr. Jazz, first name Q. Q. Jazz. All right. Anyway, we're looking, I love those. My favorite videos online is the Walmart. Oh, yeah. I'm gonna try to convince them. Where the, Oh man, what is it? Oh, one of them's like, my brother's name is Horn. It's Gabe Horn. And they're like, I need Gabe Horn up here. Gabe Horn. It's like some seven year old woman working her entire years. She's making her do it. It's horrible. They shouldn't do that to people. What are we doing? It shouldn't be. What are we doing? Anyway, so Jaden Butts had some thoughts about the shit going on. I'm sure he did. And he said, he said we were looking for traits and features

14:19that we could target the indicator of good investment and the best investment would be a problem gambler. And the core question was, is this person going to give us more than we're giving them? If the answer is yes, open the floodgates in regards to the promotionals. A former Jeff King's analyst says, He should just turn the other cheek. Oh, that's good. Thank you. Another button into people's business. He's a smack on the rump, you know? I don't know. It wasn't very good. I just thought of that in Planet Terror, which is a great movie. It's not a type of movie. I've never heard of it. You would like that movie. It's a great movie. Quentin Tarantino, Robert Rodriguez. It was great. Anyway, but there's a scene though where this guy that owns a barbecue place, this woman, very tractable, and breaks down in front of the place. And he goes, I always think of this line. I don't know why he goes, now there's a rump roast. And I always think of that. I don't know why. Because it's funny because he owns a barbecue place. So it's just funny that he's like, can't get barbecue off of mine. That's the correlation that he means. Yeah, I always think of that line. Now there's a rump roast. Anyway, it's his former draft king's analyst

15:20that says it's his predatory as it sounds. If you lose more, we give you more. So you keep playing more. Former draft king's data scientist who worked on promotion said, it makes you feel like they're getting free money, but really it's just dragging them back in. Haslal Velasco, he's been a real hassle to the draft king's ghost. Well, who are these people? These aren't real people. No. Former draft king's customer service in place. Haslal Velasco. He's just chewing on a toothpick. I'm a Haslal Velasco. I'm a bounty hunter. He says it pushes people. I'm a Udip House system. Hey, if you don't pay back what you stole, we're sending Haslal Velasco. He's full of piss and vinegar. He's gonna come chase you down over the border. Anyway, it says it pushes people to almost chase their losses. They're going, oh, I'm getting a bonus. So I can make up whatever I lost. And this name is almost Jake Shannon. Okay. Another member of a responsible gaming modeling team said our conclusion was that it was possible, even with simple rules to get a better than guessing sense of whether a customer

16:22would eventually need an intervention. But of course they exploited that and said we're going to give you more drugs or more gambling in this case. And one particular person who was interviewed by the New York Times was Brian Beal. The most valuable workflows are often the hardest to document. When they span people, systems, judgment calls, they can stay undocumented, leaving teams, missing, creating inconsistency and holding AI back. Well, that's exactly the problem that today's sponsor scribe was built to solve. Scribe is a specialized intelligence platform trusted by 94% of the Fortune 500 that captures workflows as work happens and automatically generates step-by-step guides with screenshots and instructions. So no one has to sit down and write documentation from scratch. Teams can review, edit, and share the guides for onboarding, training, software rollouts and day-to-day work. Scribe also automatically redacts sensitive info like names, account numbers, emails from screenshots. You know all the stuff you don't want other people saying.

17:22And as an admin, you control and enforce that across the whole team. Once a guide is reviewed, anyone can launch real-time on-screen guidance that shows exactly where to click inside the actual tool so critical processes can get done right every time. And because most AI was trained on the internet, not your company's way of working, Scribe helps power your AI agents with real context, giving them a foundation built on how work actually happens. Not just guesses. Learn more at scribe.how-tnm and mention Travis makes money for your first month of scribe capture free on select plans. That's SCRIBE.how-tnm. Most of us picked a bank at 16 and never looked back. And if you're not familiar, well that's where Chime comes in. Chime is changing the way that people bank. They are not like traditional old stuffy banks who charge fees and gatekeep perks and rewards. Chime offers the most rewarding fee-free banking all with no overdraft fees, no monthly fees,

18:25no minimum balance fees. Plus you get 5% cash back on Chime Card and the category of your choice like gas or groceries, all while building credit through regular, everyday spending with no credit check. And if you're ever in a pinch, SpotMe lets you overdraft up to $200 fee-free. So join the millions who are already banking fee-free with America's number one choice for banking head to Chime.com-slaesh-travis. That's Chime.com-slaesh-travis. Sign up now. It only takes a few minutes. Chime is a FinTech, not a bank, banking services and Chime Card provided by Chime's bank partners, qualifying direct deposits required, terms and limits apply. Go to Chime.com-slaesh-disclosures for details. I just made me think of CT Townsend. If you get a bill, pay your bill. Brian Bill is a gambling addict, a degenerate that lost 70th- I added that the time to wouldn't say. Brian Bill- That wasn't a verified piece of information. Brian Bill told the Times he lost nearly $70,000 gambling online.

19:25He said I would get flooded with bonuses and deposits. If you're in addiction, you are not going to say no. The Times reports that Bill received 40 draft Kings promotions in the first two weeks of December 2024. While he was in treatment for addiction, he said the promotional emails. His in treatment for gambling addiction? Yeah, he said the promotional emails themselves became a relapsed trigger. He was actually in a residential addiction treatment and they were sending mailers. Like, mail day. He's like, ah! Seems like his sponsor should have been on top of unsubscribing for draft Kings. Right. Like that was a number one on the list. Yeah, so kind of. Kind of the 12 steps that should be step one. You got to get coming and I set up and you got to have draft Kings emails. Unsubscribed from draft Kings. Right. Right. And so a crazy amount of volume of emails. Here's draft Kings argument. Okay. Let's call this the devil's advocate. A customer who are a bit... Laurie Colony. This is not real people.

20:26This is a fake article. Hey, I'm Laurie Colony. Laurie Colony with draft Kings. This is from the New York. Giant. Chad Ching says. This is the off brand New York Times. The draft Kings chief responsible gaming officer Laurie Colony says, customers who are betting within their means are betting for entertainment and betting for fun. These are marketing tools that every company out there use. She didn't say a damn thing. This is directly from their PR department. And then when explaining the company's decision not to use predictive technology for problem gambling, she just... She said we evaluated that it wasn't evidence based. Well, like the thing is, it doesn't have to be. It doesn't... Exactly. Even if their goal is not set up to find a predatory way to get people to lose more money, it is set up to maximize customer lifetime value. Which in this particular product is the people who lose the money. It's like selling... The system is inherently messed up. It's kind of weird.

21:27And one lawyer who sued online gambling companies and probably makes more than them says, when someone's struggling with addiction and a rational suggestion that this is not in your best interest is falling on deaf ears. And another person who's the director of responsible gaming at price picks on predictive risk tools says, without... Forget that quote, let's steep it. Anyway, I think... I always get weird about regulation of anything. Like it's such a weird thing because where do you end that? I do think... Like sending 40 emails to someone you know is like, I don't know. It's a really tricky thing. I do think like, you know the we used to have the thing that's like, take a break, go outside. I feel like if they have the technology that sees it, someone's like, I feel like, hey, the gambling hotline, if you have an issue, I feel like there's something they could do. Something a little bit like all that they could. Right. We have a predictive thing that says this guy's going to lose everything in the next two years. Like, here's a number or here's a cap on how much you can spend or something.

22:33But I'm sure like all that, I'm sure they could be counter-lost. It's like, if I could have placed the bet I wanted to, I would have made $10 million and they cat me at this or whatever. Right. I don't know. You know, it's a tricky one. Yeah, at least the advertising or marketing of it or something. Like, because you know, I had that guy on the show, it's my Ovali, who is the... Is that not real? Who are these people? The gambling space. Kalani's not real, but Ismail Vali told me. Ismail Vali. But like the thing is with any of those vices is that they're going to be done. Yeah. Regardless. Yeah. Go ahead and wrap us up. Yeah. What's your takeaway on this story? Do you think Draft Kings is a totally perfect innocent company that just cares about the well-being of its users? Or do you think that everyone in Balschie we executed? What's I'm saying is that you're dealing with all the legal gambling options now. Illegal gambling is still a bigger industry than the gambling. It's not... You can wish that people are just not going to do it, but it's never going to happen. So, companies like Ismails that do some sort of regulation. At least there's local benefits that are gained from increased tax revenue on people's

23:36gambling dollars that are going into local communities and stuff, versus unregulated illegal stuff where it's just going into essentially mobs, your funding organized crime. That's what taxes are for. Yeah, exactly. Anyway, go ahead. I mean, the solution is not to just be like, shut them all down, you know what I mean? But some form of... It's the same... I thought I'd feel about the pharmaceutical industry advertising on television. It's like, do we really need to ask our doctor about something? Like shouldn't our doctor just be prescribing the location based on what they're diagnosing in the hospital when we go see them? The gambling thing feels very similar to me where it's like, you should be able to watch a sports show. Like some form of that, whether online or watching a game live, without every single commercial, every logo on the court, on the jerseys, everything being sports gambling maps. You should be able to watch that without being inundated with lose all your money here,

24:41lose all your money here. Here's an easy way to lose all your money. So I'd like to say to feel very strange about any sort of like government stepping in. I do not like more government. I like small government. I don't want more regulation. I want less regulation typically, but there's also some of these things where it's like, I don't know, maybe a little bit might be helpful for some of these people that are like, I'm sure that guy who lost $70,000 was probably like, yeah, I think I would have enjoyed not getting 40 promotional emails in a week and a half or whatever it was. So yeah, I mean, if you're going to gamble, you just gotta... You have to be smart about it. You have to set limits. You have to treat it like any other thing that you would spend money on. Like you're not going to... You're not going to take a trip to the four seasons in Hawaii if your budget doesn't allow you to do that for the most part. Like you're probably going to go to the budget hotel somewhere that you can drive an hour and a half away because that's what is in your budget. That's what you can afford to do. So if you're going to gamble, fine, but put... Fund the account with $50 and then disconnect it from your damn bank account.

25:41Don't leave it connected where you can just draw money from it at all times. You can use a credit card, use only cash, give yourself a budget and say, have fun and do that and just have... And understand that it's just like an expense that you're just having some fun with. Like you would any other activity, like going to the movies or going to a comedy show or going to a concert. Fine, it's your leisure activity spending for the month. But once you start dipping back in and then thinking that you can win and beat the casino, the type of thing is like you are deluding yourself into losing all of the money that you have in your bank account. If your transaction volume is significantly higher on draft kings than it is on Robinhood, then you're probably making some pretty poor financial decisions. So keep that in mind as you go throughout those decision-making activities. That's it for this episode of the show. Remember, money only solves your money problems. It's easy to solve the rest of your problems. Money in the bank. So let's start there. Here on the Transmix Money Podcast. Thanks for tuning in. We'll catch you guys next time. Peace.

26:44I love you at 3am. We can help you sell, market, and hire in one place. We cannot help you being three places at once. And while we can't help you organize your calendar, LinkedIn can help you land more clients so you have a calendar to organize. Grow your small business on LinkedIn. Learn more at LinkedIn.com. Flush small business.