The Answer Is Transaction Costs

Author: Michael Munger

"The real price of everything is the toil and trouble of acquiring it."  -Adam Smith (WoN, Bk I, Chapter 5)In which the Knower of Important Things shows how transaction costs explain literally everything. Plus TWEJ,  and answers to letters.If YOU have questions, submit them to our email at taitc.email@gmail.com There are two kinds of episodes here: 1. For the most part, episodes June-August are weekly, short (<20 mins), and address a few topics. 2. Episodes September-May are longer (1 hour), and monthly, with an interview with a guest.Finally, a quick note:  This podcast is NOT for Stacy Hockett. He wanted you to know that.....
Be a guest on this podcast

Language: en-us

Genres: News, Politics, Science, Social Sciences

Contact email: Get it

Feed URL: Get it

iTunes ID: Get it

Get all podcast data

Listen Now...

Bookmakers Set Odds To Maximize Profit Not Balance Bets
Tuesday, 27 October, 2026

Send us Fan MailA NOTE OF APOLOGY: I uploaded the raw audio, rather than the podcast. So the first of you who listened heard the raw version, where there was some random stuff at the beginning. Sorry to waste your time! Fixed now. We talk with economist Karl Whelan about how sportsbooks actually set odds, why the “balanced book” story falls apart, and how modern betting products are engineered to raise margins. We also trace how regulation, transaction costs, and prediction markets like Kalshi are reshaping sports gambling in the US and abroad. • Karl’s path from macroeconomics and central banking to sports betting research and writing • COVID soccer without crowds as a natural experiment on home advantage and bookmaker pricing • gambling morality through freedom, addiction risk, and second-order preferences • why bans fail and why targeted friction and consumer protection can work better • gambling versus investing and where derivatives and event contracts fit • UK legalization, US prohibition history, PASPA, and the post-2018 state-by-state scramble • why US markets often lack price competition and how lobbying and licensing shape outcomes • what a sportsbook is and why firms price for profit not for perfectly balanced action • how minus 110 differs from moneylines, prop bets, parlays, and in-play betting margins • sharp bettors, profiling, limits, and the transaction costs of trying to beat legal books • prediction markets, betting exchanges, liquidity, interface design, and why most demand is still sports • Kalshi, the CFTC, politics and sports contracts, and the state rights conflict heading toward court Guest: Prof. Karl Whelan's home page at UC DublinResources:TAITC with Kevin BraigKevin Braig's book, Bookmakers vs. BallownersWhat is Kalshi? A Beginner's GuideAre you a "sharp"? If you have to ask, likely no. Some backgroundProfessional and Amateur Sports Protection Act (PASPA, 1992) The Worst Bad Beat:NFL explains ruling at end of Chargers-Steelers game (NFL.com)Referee says officials errantly voided Steelers TD (AP via Patriots.com)Scoring mistake in Steelers-Chargers game costs some bettors big (AP via Honolulu Advertiser)Steelers beat Chargers in NFL's first 11-10 game (HeraldNet)Sorry Gamblers: Official Blew Final Call (NBC San Diego / FanHouse)Book o'da Month: Fine Margins, by Karl WhelanIf you have questions or comments, or want to suggest a future topic, email the show at taitc.email@gmail.com !You can follow Mike Munger on Twitter at @mungowitz