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Happy Wednesday, Fintech Listeners! 

This newsletter (and the accompanying podcast) come to you from Atlanta, where the weather is warm, the birds are singing, and financial health conversations are happening!

Today’s topic is a familiar one if you’ve been listening and reading lately, so let’s jump right in!

- Alex  

P.S. — Payments infrastructure debt is real, it just doesn't show up on a balance sheet. Join me on May 27th to talk about what it actually costs.

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3 BIG IDEAS FROM THE PODCAST

This week on Fintech Takes, I sat down with Jonathan Cohen, Sports Betting Policy Lead at the American Institute for Boys and Men and the author of Losing Big: America's Reckless Bet on Sports Gambling.

This is the second conversation that I have had in the last couple of weeks with an author of a book about the rapidly growing American sports betting industry (here’s the first one), and there is a good reason for that: sports betting is subverting consumers’ balance sheets and making it harder for responsible financial services providers to help their customers.

However, today’s conversation is also, in some ways, more personal. Jonathan works for the American Institute for Boys and Men, which has taken an interest in sports betting because of its outsized negative impact on young men. I am glad to see AIBM put a stake in the ground here because, in addition to my day job, I am the father of two young boys. I worry about the world they are growing up in. I worry about them using products like DraftKings and Kalshi and Robinhood, not as entertainment products or as vehicles for patient wealth building, but as antidotes to boredom, loneliness, and financial nihilism.

Jonathan and I talk, very candidly, about these concerns and what the data tells us about how real these concerns are and what might happen next. 

Tune in for the full conversation here

And read below for my three big ideas...

#1: A World Without Friction

According to Jonathan, Americans wagered $5 billion on sports in 2018. Last year, that number was $166 billion. 

What changed? 

Friction. 

Friction used to be the fence that kept sports betting contained. You had to physically get in your car and drive somewhere that sports betting was legal (Whoo! Roadtrip! Hey! Vegas! Vegas baby!!!). Americans somehow still found a way to wager $5 billion under those conditions. 

Then the smartphone arrived and the friction disappeared, and that number shot up to $166 billion.

What I keep coming back to is how obvious this should have been. By 2018, smartphones were not a novelty. They were the most common prism through which we filtered the world, and we were already worried about what they were doing to teenagers. There were congressional hearings. And yet nobody in the room (i.e., not the Supreme Court, not the states rushing to legalize sports betting, not Congress) seems to have asked the obvious question: what happens if we legalize this specific activity in the age of smartphones? What does it look like when this is available 24 hours a day, 365 days a year, from anywhere?

Jonathan pointed the finger at the states, or more specifically at the companies that lobbied the states to move as quickly as possible. The result was that 32 states, soon to be 33, ran an experiment to see what would happen to all of us if they put one of the most addictive activities available onto one of the most addictive tools ever invented. As Jonathan astutely observed in our conversation, we turned the entire country into beta testers, and the consequences of that beta test have not been distributed evenly.

The deeper point here is one that financial services people should find familiar. Friction is not just an engineering problem to be optimized away. It’s often the thing standing between a person and a decision they will regret (I’m looking at you agentic commerce!).

#2: The Long Con of Calling Gambling “Investing”

The American Gaming Association started calling gambling "gaming" in the 1990s. The word change was strategic. Casinos weren't neon-drenched dens of addiction; they were entertainment venues. DraftKings and FanDuel came out of daily fantasy sports, which was itself a legal workaround, and the language of "playing" rather than "betting" came with them. Then prediction markets arrived and escalated the terminology entirely. These are not bets; they are investments. They are derivatives. They are swaps.

Bets on prediction markets are investment products under current CFTC guidance, which means the language is doing a very specific (and evil) kind of work.

The survey data Jonathan's organization fielded with Ipsos makes the stakes clear. The poll, conducted in early 2026 with over 2,300 adults, found that 61% of Americans view prediction market trading as closer to gambling, while 8% consider it closer to investing. 

When prediction market users were asked why they use the platforms, 41% said they were using them to make money. Almost none cited hedging, which is the legal rationale the platforms use to justify their existence to regulators. What the companies tell the CFTC and what their users are actually doing couldn’t be further apart. 

When gambling is gaming, it competes with movies and concerts. When gambling is investing, it competes with index funds and 401(k)s. Research consistently shows that people don’t fund sports betting out of their entertainment budget. They fund it out of savings, retirement, and their investments. 

This is at once a semantic and behavioral distinction. Just look at the ads. Sports betting ads always show someone watching a game (phone in hand), because that’s the behavior these companies want to cultivate: a second screen, always on. The legal brief may say derivatives and hedging. The Instagram ad says you can pay off your student loans.

#3: What’s the Big Deal with Trump Accounts?

I want to be clear before making this point: I think Trump accounts are good policy. A government-seeded investment account for every child born in the United States, compounding in low-cost index funds until they turn 18. It’s bipartisan in its roots and broadly sound in its design. I’m prepared to get past whatever branding the Treasury Department puts on the app.

The problem is Robinhood.

Robinhood was named as backend infrastructure for the program. The Treasury Department went out of its way to make it clear that Robinhood will have no customer-facing role in the program. Robinhood's CEO went on CNBC after the announcement and said this was going to be the way a whole new generation of consumers gets introduced to Robinhood. 

Those are two things that can both be true at the same time, and neither of them is reassuring!

Jonathan put it in terms of a framework I've used before: every fintech product is either (functionally) a bank or a thing that looks like a bank that is designed to cleave you from your money as quickly as possible. Robinhood is trying to do both, which is almost worse than committing to one. The 401(k) product is real. The premium credit card is real. The gamified trading interface is real. The push into prediction markets and sports betting is real. They live in the same app, and now potentially in the same pipeline as a government-sponsored account that 18-year-olds are going to inherit without having asked for it.

The best-case scenario is that 18 years from now, Robinhood has evolved into the Schwab of its generation: reliable and deeply uninteresting to anyone under the age 35. Jonathan’s response to that scenario was that I was engaged in wishful thinking. 

He's probably right.

WHAT I'M LISTENING TO

#1: Closing Credits: Are We Cornering the “Trading Places” Market? (Bank Nerd Corner) 🎧

One of my favorite old movies as the subject of one of my favorite podcasts. Good stuff all around.

"I had the most absurd nightmare. I was poor and no one liked me ..."

#2: AI Is Coming for Bank Deposits (Banking With Interest) 🎧

Among the many topics discussed in this episode is the threat that CDs are under in the age of AI-powered deposit price optimization, which is a topic that is tailor-made to appeal to me!

*Bonus: Banking on Primacy, Episode 2: The Bifurcation of Rewards (by me, with Chime) 🎧

Americans deposit ~70% of their income into checking accounts and get almost nothing back. Episode 2 with Vineet Mehra, Chief Growth and Marketing Officer at Chime, unpacks why the best rewards migrated to premium credit cards, how Chime Prime is designed to collapse that gap, and what it means to build rewards around usage instead of breakage. Listen here.

*This rec is brought to you by one of our fantastic brand partners.

Thanks for the read! Let me know what you thought by replying back to this email.

— Alex