Excess Returns · Sunday, September 6, 2026
Unlike the dramatic, single-event losses that can shock investors into caution, the problem with sports betting lies in its subtle, grinding nature. Many participants slowly lose money over time through frequent, smaller bets, creating a 'grinding despair' that is harder to recover from than a single large mistake. This gradual financial erosion may not provide the sharp learning moment needed for behavioral change.
“Like the the subtle problem of sports betting is that it is rarely that dramatic. Most people lose money over time. It's not that they lose it all on a Super Bowl bet. It's that they're betting on, you know, 100 baseball games a summer and they're slowly losing 10% a week and then they put a little bit more in and they lose another 5% and then they have a 20% win and they feel like heroes and the cycle repeats.”
“And that kind of grinding despair in a financial situation, I think is much harder to recover from than the one big mistake.”
“I feel like this is a a grinding tax on math literacy that we're not going to be able to turn around just by willing it so.”