• Sports betting used to be (mostly) illegal but tolerated.
• Now it’s (mostly) legal, and heavily promoted. And it’s incredibly easy to do from your phone.
• That’s going to lead to a catastrophe in the US, says the author best known for his books on Wall Street, money, and sports.

It’s hard to remember, but not very long ago sports betting was illegal in most of the United States. Now it’s very legal in most of the country, and a huge part of the culture — especially for young men. And there’s pervasive marketing trying to make it bigger and to encourage people to place wagers from their phones.

That’s a disaster waiting to happen, says Michael Lewis.

Lewis is best known for enormously successful books like “Liar’s Poker,” “Moneyball,” and “The Big Short.” In recent years he’s also taken up podcasting, and his most recent focus has been on the sports betting boom: I really encourage you to dive into Against the Rules, which shows you, among other things, how much work sports betting companies to do to encourage naive gamblers to bet — and to literally ban gamblers who know what they’re doing.

I spoke with Lewis for my Channels podcast, and we spent a bunch of time talking about the unintended consequences of the sports betting boom, and if there’s any reason to think the industry will change. We also talked about Donald Trump and Elon Musk’s campaign against the federal government — because “The Fifth Risk,” Lewis’ 2018 book, detailed Trump’s first attempt to overhaul Washington and the federal workforce. And we also touched on the latest crypto boom and the fate of Sam Bankman-Fried, the subject of Lewis’ most recent book. You can hear the whole thing here; the following is an edited excerpt of our chat.

Business Insider: When the sports betting boom started in 2018, gambling companies and media companies told me two things: that legal sports betting companies were going to focus on converting existing, illegal gamblers over to regulated gambling, and that sports betting would stay separate from mainstream sports on TV. Both of those things turned out to not be true. Do you think they were being dishonest with me, or did something change?

Michael Lewis: I think they didn’t know what they were going to be able to get away with. I think they anticipated a resistance in the culture that just wasn’t there. I think they thought there would be a thousand Bill Bradleys [the former US senator and NBA star) who stood up and said, “This is antithetical to the values of sports.”

So they proceeded cautiously because they didn’t know what resistance they were going to meet. And then they rushed in and there was no resistance. It was like you were about to fight a war and there was no army on the other side.

The NCAA commissioned a study. Whenever I say this number, I think this can’t be true. But they stand by these numbers: Sixty percent of the boys on college campuses are gambling on sports. Sixty percent.

It is now so woven in male college culture and so woven into male high school culture. So the sports gambling industry has cultivated an entirely new market. And we’re just beginning to see the social effects. There are studies showing that bankruptcies rise in places where sports gambling is introduced, savings rates collapse. And they will find soon — because they found it in England — the suicide rates will go up.

I don’t mind pleasure. I don’t mind doing bad things in moderation. But gambling on sports, on your phone? It’s already an addictive device.

This is something I’ve wondered about for a while: You’re marrying an addictive property — gambling — to an addictive property — the phone. It seems like a disaster waiting to happen. Google and Apple are giant companies that are conservative in lots of ways. They don’t allow porn apps. They’re not making meaningful money from gambling. You would think either for moral reasons or for legal reasons, they would say, “Of course, you can use our phone to gamble, but we’re not going to allow apps. We’re going to add friction to this.”

And whenever I’ve asked anyone about that, they give me a blank look and pretend like they can’t understand what I’m saying.

What little I’ve seen or heard is just the opposite: that Apple wants to have relationships with the sports leagues, and the sports leagues want Apple to make it easy for gambling.

The Apple Sports app shows you betting odds, front and center.

That’s right. I think they’ve all underestimated the social consequences, the bad things that are going to happen because of this. We’re just getting going in this country. In Australia, it’s a crisis. It’s become a political issue.

Let’s try a straw man argument: I can legally buy booze and weed and all the fast food I want. And I can enjoy them all in moderation or I can make mistakes and get myself in a lot of trouble. And it’s my responsibility as the consumer to deal with that. Do you think that’s an appropriate way to look at gambling?

I think that if you frame it as: Just let anybody do what they want to do, and it’s on the consumer to check their behavior, you’re going to end up with a mess. You’re not gonna want the society that leads to.

What you want is [to add] some friction into the process, making it a little more difficult to do. That stops lots of bad things from happening.

We don’t police junk food. But we do police heroin, and …

And we tax the hell out of cigarettes.

Right. And we don’t allow cigarette ads.

I’m not saying “ban sports gambling”. But it seems to me a no-brainer that you should get rid of the ads on TV. Why should you be pushing people into it? That’s crazy. Make the apps a lot more transparent. So if you bet a parlay, you have to show what the true odds are. You can’t trick people into making stupider and stupider bets.

And policing: If you talk to regulators state by state — this thing is regulated state by state, to the extent it’s regulated — they would tell you that one of the great things we thought about FanDuel and DraftKings is that they have the technology to understand who’s got a gambling problem. You can watch the pattern of bets, and you can identify the problem gambler. This is why we like them monitoring their gamblers.

What the companies have done instead is to use that power to monitor the ones who know what they’re doing — and get rid of them. What they aren’t doing is identifying the ones who are problem gamblers, and sending them to counseling.

Do you think the genie can go back in the bottle, or is this it?

I do. Like with cigarettes, I think that it can be treated like it’s a vice and it should be heavily taxed. It’s bad for people. It should be harder to do.

There was never a delivery mechanism for cigarettes as efficient as the phone is for delivering the gambling apps. The world has created less and less friction for this behavior when what it needs is more and more.