Welcome to Simply Put. I'm Ed Elson. This week, drug dealers.
You've probably seen the Sydney Sweeney ad by now. And if you haven't, you've certainly heard the outrage it caused around the world. Her lack of clothing led many to accuse her of sexualizing women's sport. One Olympic athlete dubbed it a kick in the face to women. Hundreds of thousands of fans unfollowed her overnight. Another Sydney Sweeney ad. Another global scandal. Now, I get it. It's crude. But I think people are getting angry about the wrong thing. The problem isn't what she was or wasn't wearing, but rather what she was selling. Specifically, another harmful addiction. One that's ruined thousands of American lives and in some cases even taken them. Not alcohol, not opiates. Something even more pernicious, gambling. Fun as it may be, gambling is one of the most destructive and addictive drugs in the world. Roughly two and a half million American adults meet the criteria for having a severe gambling problem. One in five of them will attempt suicide, the highest rate of any addiction and almost double the rate of drug or alcohol-related cases. The National Council on Problem Gambling puts the annual social cost in bankruptcies, lost jobs, and medical bills at $14 billion.
Despite this, America has made concerted efforts to make it even more accessible. From memecoins to prediction markets, this substance is now legal in various forms. But the most popular strain is the one that Sydney Sweeney undressed for. That strain is known as sports betting. The Supreme Court legalized sports betting in 2018, and Americans have wagered more than $520 billion on it since then. More than a quarter of adults in the US have a sports betting account. But there's one demographic that loves this drug more than anyone else. Young men. Among that population, the share that owns an online sports book is more than half. Once federally approved, a cascade of states moved to legalize sports betting, too. Those that didn't were the control group and the impacts were stunning. In states where it was made legal, personal bankruptcies rose 25 to 30% within four years. Calls to gambling helplines shot up 75%. Diagnoses of gambling disorders increased 61%. Meanwhile, household investing fell 14%. Meaning the money that usually goes into retirement accounts went to DraftKings instead. In fact, many young people no longer understand the difference between gambling and investing. More than a quarter of them see sports betting as a viable long-term financial strategy. As a result, the gambling companies are now raking in money. Between 2020 and 2025, online sports book revenues grew more than 1,000%.
As with any drug dealer, they make their widest margins off of the most addicted. A 2023 Reuters study of sports bettors in New Jersey showed that 5% of bettors make up 70% of the bets. That's also why DraftKings built a machine learning algorithm that specifically targets customers who gamble the most. Jonathan Cohen of the American Institute for Boys and Men described the Sydney Sweeney ad to me as brilliant. It's the perfect distillation, he explained, of the entire issue. He's right. What better way to lure in sports bettors than marketing a naked Sydney Sweeney? After all, it isn't empowered women who are addicted to sports betting. It is lonely young men. Studies suggest a correlation between male loneliness and online gambling. It's common sense. A young man with too much time on his hands and not enough human connection is more likely to engage in online addictive behaviors. For more than 40% of young men, that means porn. And for more than 50% it means sports betting. Sydney Sweeney's ad presented both.
Sydney Sweeney is receiving the brunt of my criticism. But let's be clear, she's not alone. Over the past few years, countless celebrities have used their fame to promote sports betting. Derek Jeter promoted BetMGM. Eli Manning endorsed FanDuel. Kevin Hart starred in an ad for DraftKings. In fact, just four days before Sweeney's ad dropped, LeBron James started hawking football wagers on Polymarket. The deal was worth a reported $15 million per year, almost four times what he gets paid to play basketball. Does this make them bad people? No. They're getting paid to promote a product that's legal. But if we're going to be up in arms about something, it seems misguided to make it about nudity. The next generation of sports bettors are now taking to the prediction markets where you can get paid for successfully predicting the results of Ukrainian women's table tennis. It's no different from regular online sports betting. You place a wager, you hope to get paid. The only difference is the regulation. Unlike DraftKings bets, which are legal in only some states, prediction markets bets are legal in all of them. Why? Because sports bets on prediction markets are technically classified as futures contracts. That classification makes them a commodity regulated by the Commodity Futures Trading Commission. The CFTC sees them as no different from, say, corn futures. The agency also has exclusive federal jurisdiction over commodities law, which means that even in states where online sports betting is illegal, when it is done on prediction markets, it isn't. There's no two ways about it. The regulations as they currently exist make no sense. The Supreme Court is set to rule on them next year. And if the laws aren't changed, we will know that the judiciary has lost all credibility. My prediction, they will be changed. Until then though, it's sunny days ahead for prediction markets. The major platforms processed $51 billion in payments volume last year, and that number is expected to grow to $240 billion this year. A vast majority of those revenues came from sports.
What to do about all this? The answer isn't to ban it. I see gambling the same way as I see alcohol. Dangerous in excess, fun in moderation. I also support our existing alcohol laws. Legal beyond a certain age, and heavily regulated. Gambling should be regulated the same way. What does that actually look like? Exactly how it sounds. Every bet should have a warning label on the bottle. Commercials should be tightly monitored and controlled. Distributors must be licensed and IDs must be checked. As for prediction markets, sports contracts should receive the same regulatory treatment as sports bets. That doesn't mean shutting them down. It just means regulating them. Many prediction markets are actually quite useful, such as their economic and commodities contracts, which I frequently use for analysis and which can be used to hedge financial risk. These deserve to be regulated like regular futures contracts. But there is a line between betting on the Fed funds rate versus betting on the Knicks, and we need to draw it.
Ultimately the question comes down to what kind of world we want to live in. There is a world in which gambling is a welcome side act in the American economy. Where sports betting is lighthearted, fun, and rare. Where those who want to take part do so guiltlessly, and those who don't, don't. But that's not the world we currently enjoy. What should have been a footnote in American culture has instead become its economic centerpiece. Gambling is literally everywhere. Its presence and the harms it's incurred have become inescapable. More than half of young men in America say they are lonely or isolated. And roughly the same share are gambling what little they have on money-losing bets online. More and more young people report feeling hopeless with every passing day. And instead of helping them, we pass them another needle to numb the pain. My question is, is this really the world we wanted?
