Big data companies: Extracting millions from NC residents…with state government’s help

North Carolina will soon have legal sports gambling. The state Lottery Commission voted last month to allow bookmakers to start taking bets – both on the ground and online – starting March 11. It won’t be in time for this week’s Super Bowl, but it will be easy to lose big bucks on the ACC men’s basketball tournament that commences March 12.

And while many have greeted this development as ho-hum news in a society in which gambling has become ubiquitous in recent years – for instance, the lottery is already plugging something called “digital instants” and as most sports fans are aware, even ESPN now has an entire website and significant programming devoted to gambling — it’s actually an important and deeply worrisome development.

First, is the direct damage it will inflict on thousands of North Carolinians. As mental health experts have repeatedly explained, and as reporter Jon Wertheim detailed this past weekend in a powerful segment on 60 Minutes, gambling addiction is a big and growing problem in our culture, and this is especially true for young men – the very group that’s sure to be attracted like bugs to a back porch light by the opportunity to gamble on college sports.

As Wertheim reported:

This isn’t the kind of gambling where people fill out a basketball tournament pool or wager on the outcome of the big game. Instead, modern gambling has rapidly evolved into a hyper-addictive phenomenon that invites bettors to place repeated “micro-bets” on their phones – not just on the outcome of games, but on event after event within games. A single drive of a few minutes in a football game can easily give rise to multiple bets.

As one addiction expert told Wertheim: “I have patients who gamble in the shower. I have patients who gamble before they get out of bed in the morning. I have patients who gamble while they are driving. There are no guardrails.”

No wonder on British gambling expert said: “I would say understand what the nature of these companies really is. They are big data companies that are extractive.”

This observation was confirmed in spades by reporter Danny Funt last month in a story in the Washington Post. As Funt reported in “He hit three monster bets — and then the sportsbook wouldn’t pay,” the gambling companies have actually figured out a way to make sure they can avoid paying a large number of what seemed to be winning bets.

This is because their lawyers have crafted and added boilerplate language to the fine print “terms and conditions” to which bettors must agree in order to place bets that act as “insurance policies” for the gambling companies. These caveats say that the companies don’t have to pay out when people win bets whose odds or terms represented “obvious errors” by the bookmaker.

You got that? Companies that profess to be about “gambling” have designed and implemented a business model which assures that the only one gambling is the consumer. Profits for the corporations handling the bets are a sure thing.

Imagine if a bettor tried to worm out of a bet that way.

Of course, all of this would be one thing if the gambling were still confined to Las Vegas or Atlantic City or a handful of tribal outposts. But as noted, that’s no longer the case – or at least will soon no longer be the case. In just over a month, thanks to the actions of state leaders, North Carolina college boys will be able to bet on their phones with every asset at their disposal.

As expert Harry Levant told Wertheim: “I have patients, some of whom are college students, who have gambled federal student loan money. I have young patients who have gambled away inheritances.”

And, as you might imagine, the companies pushing the bets are using ever-more-sophisticated algorithms produced through artificial intelligence to craft push notifications to bettors that keep the wagers coming. For those with addiction issues, it’s as if heroin dealers had AI at their disposal to time “fix” offers.

Defenders of North Carolina’s new gambling expansion describe it as “entertainment” and tout rapidly spoken advertising disclaimers that urge people to seek help if they need it. But, of course, one can rest assured the corporate bookmakers won’t be using AI to identify addicts in need of help.

And the supposed boon to state tax coffers? It will be dwarfed by the millions upon millions of dollars North Carolinians will now be sending every day to giant, out-of-state corporations that are only just beginning to hone their predatory cash extraction techniques.

In short, giant companies have figured out a way to enlist government assistance in a sophisticated scheme to extract vast sums from residents based on deceptive advertising and phony promises.

No wonder Donald Trump devoted so much of his career to the industry.