Gambling Scandal Rocks the NBA & Oil Jumps After US Sanctions Russia

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0:31Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today you've heard of K-pop but K-beauty is right on its heels. Ben, basketball hasn't seen a gambling scandal this big since I bet Neil I could beat him in horse. It's Friday October 24th. Let's ride.

0:52Happy Friday especially to everyone who misses Clippy because Microsoft is reincarnating its annoying but lovable software assistant nearly 30 years after it debuted. Meet Miko, a new artificial intelligence character you could think of as Clippy 3.0. Miko is a floating emoji-like blob that's meant to embody Microsoft's co-pilot virtual assistant. It'll answer your questions while you use Microsoft apps and respond to your behavior. If you're in study mode, it'll don glasses. If you tell it something a little sad, it'll sympathize with its facial expressions. Most importantly, you can shut off Miko when it gets too sassy.

1:29One of the more common complaints with that persistent animated paperclip. Toby, is the world ready for a new Clippy? All I have to say is how dare you stand where he stood. An expressive avatar blob named Miko. Are you kidding me? Give me an anthropomorphized paperclip or give me death. I do like that they included an Easter egg, an homage to Clippy, where if you tap Miko a couple of times, it transforms into Clippy. But I guess anything is better than whatever Grok is doing with its AI chatbot and having these risque anime companions. I'm interested to see how people react to Microsoft's Blob.

2:07I don't know why Blob is the de facto assistant in the AI age right now. If you talk to ChatGPT's voice assistant, it's kind of Blob-like too. What is with it? Give me something anthropomorphize. They're so cute. Blobs are cute? Blobs are extremely cute. Have you seen Clippy? No. Actually, Clippy was really annoying. Maybe I'm just reversing my whole stance on it all, but I just don't think you can replace an iconic figure such as Clippy with something like a blob. All right. And now a word from our sponsor, Disney Campaign Manager. Do you hear that in the near distance? It's the cultural conversation.

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3:19Disney Campaign Manager doesn't just help you gain an emotional and cultural advantage. It's also a ticket to cultural participation for your brand. Learn more at DisneyCampaignManager.com. That's DisneyCampaignManager.com. The NBA has been back for less than a week, and it's already embroiled in a massive gambling scandal bigger than Victor Wembenyama will ever be. Federal agents arrested Portland Trailblazers coach Chauncey Billups and Miami Guard, federal agents arrested Portland Trailblazers coach Chauncey Billups, Miami Guard Terry Rozier, along with 30 other people yesterday morning as part of two sweeping investigations into illegal sports betting and a mafia-linked poker ring.

4:00First up, prosecutors alleged that Rozier tipped off members of a betting ring that he would leave a game early, allowing them to make money on prop bets that depended on his performance. In the game under investigation which took place back in 2023, Rozier played just nine minutes and scored five points after averaging over 35 minutes in 21 points that season. Separately, Chauncey Billups, an NBA champion, Hall of Famer, and current coach in Portland, was allegedly conspiring with the literal mafia to participate in rigged poker games. According to prosecutors, this was a Hollywood-level operation complete with custom-made poker tables fitted with x-ray scanning panels, Glass is capable of reading marked cards and hidden cameras in card trays.

4:43This scandal comes as the NBA and most professional sports league have deeply intertwined themselves in the legal betting ecosystem. And now they have the call coming from inside the house as multiple high profile members of the league found themselves wrapped up in a truly massive scandal. This is the most surprising news and the least surprising news you could imagine. In terms of least surprising, the NBA has been embroiled in a growing gambling crisis for the better part of a year. There was another NBA player, Jontae Porter, who was caught up in the same investigation. He was found to have thrown games and played less than he could have in order to spread profits among bettors who he spread insider information to.

5:26He was banned for the NBA for a lifetime. He can't play in the NBA anymore. And then in terms of it's surprising because you it is the nexus of the professional basketball world, mafia families in New York and the growing world of online sports betting. Cash Patel, the FBI director, called it the insider trading saga for the NBA. There is massive fraud going on, according to the FBI. And the scope of it feels like we've just really scratched the surface. Yeah, it's happening in other sports as well. I mean, I go back to 2023 in the NFL. They suspended 10 players that year alone. Last month, the NCAA banned three basketball players and announcing he was investigating 13 former men's basketball players as well.

6:07I do think some of the fallout from this, because the Terry Rozier aspect of it, that is tied to prop bets, which are individual bets on a player's performance. It's actually a lot easier to rig prop bets than it is to throw an entire game. It's a team sport, so you can only do so much to influence a game's outcome one way or the other. But if you say, I'm going to bet the under on your points, Terry Rozier, and then he checks himself out of the game and those unders start to hit, that's become a conduit for a lot of these illegal betting schemes because it's just so easy to influence a single player's performance.

6:41So I do think you might see the NBA start to tighten rules on injury and participation reporting before games. So bettors don't have access to insider information, privileged information. And it's something that everyone can have. So that might be some of the fallout you see from this is maybe a crackdown on prop bets and maybe a crackdown on how injuries are reported in the NBA. Pressure is growing on the NBA, in particular Adam Silver, who is the commissioner to address this growing problem. He was on the Pat McAfee show this week. He was talking about specifically prop bets, and he said that he is talking with gambling partners for the NBA, which are these huge gambling companies, to, quote, pull back some of the prop bets for lower paid players.

7:25He said we have to protect the competitors. We want to protect the environment in the arena of people getting out of hand. and he needs to address this ASAP because there's growing concern that the integrity of this league and also other professional leagues as this industry has grown is being completely compromised and people are spending millions, billions of dollars betting on these games and you're not quite sure whether the outcome is actually truly competitive. Meanwhile, this poker game is truly insane. I was going back through the archives. Some poker podcast had tipped people off on this game for a while, even name-dropping Chauncey Billups as far back as 2023 as running a rigged game because it sounds fake.

8:06I mean, what do you mean that people are wearing glasses and contact lenses that can see marked cards? But that was exactly what was happening. Chauncey Billups and then Damon Jones, which is a former player and coach in the NBA, were quote-unquote the face cards that were meant to lure in high-profile celebrities, people with high net worth to the game, whereas everyone else was in on it and that fish was taken as the kind of target. And those victims' losses totaled$7 million. So this was a lot of money passing through this game. So separate but related case, Chauncey Billups also might be someone who is associated with the gambling probe as well.

8:41Just pretty crazy that when this news started dropping, like first Terry Rozier, then Chauncey Billups, I think this is not the last we've heard of this scandal either because of how far-reaching it apparently was. Moving on, the U.S. just put the two biggest Russian oil companies on the no-fly list, shaking up the global energy market and putting the most intense pressure yet on Vladimir Putin's war economy. On Wednesday, President Trump announced heavy sanctions on Lukoil and Rosneft, Russia's two largest oil producers. The goal, according to the White House, was to hit Putin where it hurts, his bank account, in order to squeeze him back to the negotiating table for a ceasefire in Ukraine.

9:18And this would hurt. Taxes from Russia's oil and gas industries account for about a quarter of its entire federal budget, which is looking a bit leaky almost four years after it launched its invasion of Ukraine. These sanctions are such a big deal because they could effectively cut off Russia's oil giants from their biggest customers, China and India. Now, wait, you say China and India didn't sanction Russia. Why couldn't they just keep buying Russian oil? Well, the U.S. is still the top dog of the global economy, at least in the West, and India and China could be cut off from Western banking systems and access to US dollars if they do business with the Russian companies that are sanctioned by DC.

9:57As former State Department official Eddie Fishman said, a Chinese bank, a UAE oil trader, an Indian refinery, if any of them transact with those Russian companies, they could be hit with US sanctions. So they're in a bit of a pickle and so is the oil market, which Toby had a major reaction to this move by Trump. Yeah, the oil market has been pretty stagnant for most of the year, But when this happened, you did see bent crude prices shoot up a little bit, 5 % immediately on reaction to this news. Russians' oil shipments have been remarkably resilient and consistent, despite the fact that Western measures have been trying to sanction them since the war on Ukraine broke out.

10:33They recently hit a 29-month high, actually, Russian oil shipments. And a big part of that equation is India. India has essentially been Russia's lifeline since 2022. They've bought over a third of its crude imports from Moscow. So if that relationship starts to get a little shaky, Russia is in a tough spot right now, which was exactly the point of these actions by the U.S. Yeah, analysts say that the impact of this blacklisting really will depend on three things, how much they are enforced, the reaction of India and China, whether they continue to buy from Russia despite the threat of these secondary sanctions, and whether Russia can circumvent the measures.

11:11I don't think there's a country on Earth that is better than circumventing sanctions than Russia. They've been doing it for four years and even longer. They still send plenty of oil to Russia and India, or to China and India. But we'll see the reaction from China and India because they've been getting so much of their oil, as you mentioned, at a real discount. Because Russian oil is very cheap on the global marketplace right now because it does have this big target on it. So everything depends on China and India's reaction, how much the U.S. is willing to enforce this. Because if they are, it will be a huge shakeup of global energy flows.

11:49And candidly speaking, we were probably going to do a story earlier this week about how cheap oil prices have been before this 5 % jump hit yesterday. And for a long time, cheap oil was kind of a blessing for the U.S. because it just boosts consumers. It cools inflation a little bit. But now that the U.S. is such a big producer and exporter of oil, those cheaper barrel prices actually hits economic activity. So if you are a net exporter, you don't necessarily want to see oil be cheaper. So it's kind of been a flip over the last couple of decades as U.S. oil production has ramped up and suddenly cheaper oil is not the boon it once was for the economy.

12:27moving on president trump was feeling lenient yesterday and passed down a presidential pardon that effectively wipes away one of the most significant crypto crime cases in u.s history the beneficiary is none other than shang pang zhao the billionaire founder of the world's largest crypto exchange binance flashback to 2023 and cz pleaded guilty to failing to maintain anti-money laundering controls at binance which allowed sanctioned users and terrorist groups to transact freely. Binance paid a$4.3 billion penalty, a record fine, and CZ was sentenced to four months in prison before being released late last year.

13:05This pardon now sets up a path for Binance to operate legally in the U.S. once more. Why is Trump handing out this particular pardon? The administration has made a number of pro-crypto moves already with the White House Press Secretary Caroline Leavitt justifying this latest one saying the Biden administration's war on crypto is over. Trump's family also has a number of ties to the crypto world, and Binance particularly. In May of this year, World Liberty Financial, the Trump family's crypto venture, facilitated a$2 billion investment in Binance via USD1, the stablecoin that it had developed, forging a partnership between the two companies.

13:40Neil CZ is thought to be the richest person in crypto with a net worth north of$80 billion. Binance is the biggest crypto exchange on earth, processing over one third of all digital currency transactions. If Trump wants to court the crypto crowd, this is the right person to pardon. Though he has received criticism from allies, including the investor Joe Lonsdale, who said, I love President Trump. This is possibly the greatest administration of my lifetime, except for these pardons. If I'm calling balls and strikes, these are hit by pitches. POTUS has been terribly advised on this. It makes it look like massive fraud is happening around him in this area.

14:15And this dates back to this relationship that CZ has fostered with the Trump administration and with the Trump family's crypto venture, World Liberty Financial. Because ever since he went to jail and then came out of jail four months later, CZ has been making moves in order to cozy up to the Trump administration or the Trump family's crypto company in order to facilitate the growth of USD1, which is the cryptocurrency promoted by this particular company. And he's taken a number of moves, including facilitating that$2 billion investment, which caused the price of this cryptocurrency, Trump's cryptocurrency, to move way up in price.

14:52So he has been taking these steps, and now a lot of observers are saying, wait, what is going on here? What are the ethical considerations of the fact that CZ has been cozying way up to Trump, and now that he's getting the pardon, what is the quid pro quo? Yeah, some of those ties, I'll just mention them here. Teresa Gullion is an ex-SEC lawyer who also represents Zach Whitcoff, which is the son of Trump's Middle East advisor, Steve Whitcoff, who is also the business partner of World Liberty Financial. That is kind of the lawyer and lobbyist that CZ has been coising up to. And then also Chez McDowell, he's a lobbyist on Capitol Hill as well, hunting companion of Donald Trump Jr.

15:31He and CZ were like appeared together as well. So you are seeing Binance not only back these major business deals and investments in World Liberty Financial, but you're also seeing him just start to get his tentacles or start to cozy up to a lot of people close to Trump's orbit as well, which is why you are seeing some of these alarm bells, obviously from Democrats, but also from some staunch Trump allies as well, saying this looks a little bit like too intertwined with each other. Maybe we should have some separation here. All right, we're going to take a quick break and come back with our Stock and Dog of the Week.

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17:56quantum computing companies, which popped yesterday on a report that the U.S. government is considering becoming a shareholder. Wednesday evening, the Wall Street Journal wrote that several quantum companies are in discussions with the Commerce Department to swap equity stakes for federal funding, sending shares of names like IonQ, Rigetti Computing, and D-Wave Quantum up at least 7 % in trading yesterday. If the deal were to materialize, it would mark the next phase of the Trump administration's unusual interventions into the private markets. Already this year, the U.S. government became the largest shareholder of Intel, a key chip maker, and scooped up major stakes in American companies that mine rare earth minerals.

18:34The theme that ties all these government targets together, they are the infantry soldiers in the technological arms race between the U.S. and China. And quantum computing is one of those battle lines. This tech, while still experimental, has the ability to make every aspect of the economy more efficient by solving complex problems in the fraction of a time it would take a classical computer, unlocking drug discoveries and creating new materials. Just this week, Google turned heads when it showed a quantum computer can run 13 ,000 times faster than traditional computers. Toby, 2025 has been the year of quantum and this would put the cherry on top.

19:09Yeah, unfortunately, some of that quantum mania was squashed in the afternoon though when officials threw cold water on the idea. A spokesperson did say in a statement, the comments department is not currently negotiating equity stakes with quantum computing companies. The denial came after that Wall Street Journal report came out. They did say that maybe it wouldn't be equity stakes, but more in the form of a loan, so it's not actually becoming a direct shareholder in the company. It did kind of cut short the rally for these companies, but most of them did end up the day still in the positives because I think the bull case is here long-term.

19:42The government thinks that this is a critical industry, much like rare earths, much like chip manufacturing. And so they will send a little support and investment their way. The hype train has been maybe a little off the rails this past year because a lot of these companies do not make any revenue. They say so themselves. A lot of these CEOs come up and say on earnings calls, hey, we're not expecting profitability in this decade for the most part. This technology still needs a long time to mature. But if you want to skate where the puck is going, you say maybe this is a critical industry going forward.

20:12Quantum computing stocks have been on a roller coaster this year. I mean, as soon as we finish the show, I see you go and see and look into quantum stocks. and they're either up 20 % or down 20 % every single day. Overall, they have been surging this year. D-Wave is one name that's up 223%. Regetti is up 98%. They are very, very active in terms of the retail trading community. People love trading these stocks. They are included in the Beam Stock ETF that was just introduced a few weeks ago. So these are stocks that people are trading like crazy. And now that the US government has taken an eye, they're probably only going to be even more popular among the individual investor crowd.

20:53My stock of the week is APR. Not APR as in annual percentage rate on your car loan. APR as in South Korea's most valuable cosmetics group. APR's market cap reached$6 billion this week, surging past legacy giants in Korea and nearly on par with America's e.l.f. beauty. The impetus behind its rise is a$180 facial gadget called the Booster Pro, which combines electric microcurrents and LED light therapy, sort of like a wand for smooth skin. All it took was a Kylie Jenner endorsement, literally a 15-second video on TikTok, to spark a global sales boom. APR taking over the mantle as the most valuable cosmetics company in cosmetics-crazed Korea is significant because it demonstrates a shift in consumer behavior, with buyers increasingly investing in beauty tech rather than just the high-end creams that hair and makeup are putting on Neil and I.

21:45Neil, this company is a rocket ship. It's 7x revenue in six years from$70 million in 2018 to nearly$500 million in 2024, all led by Kim Byung-hoon, a 36-year-old entrepreneur who used to be an app developer before he became a skincare mogul. I hadn't heard of this company, though, obviously, but I'm looking at our skin right now. We could use a little APR in our lives. Toby, tell me you haven't heard of this company. Look at your glow. You've definitely been using the Booster Pro over the past few months. Yeah, this billionaire, the CEO of this company, you know, he doesn't have that big ambitions.

22:18He said, only we want to be essentially like the early stages of Apple when they first started with the iPhone. He's setting the bar real low. It is an absolute rocket ship as K-Beauty is overall. And I don't think it's a coincidence that this company got a huge pop from a TikTok video because K-Beauty and TikTok have gone together like peanut butter and jelly is the top beauty category on TikTok shop with 132 % growth in 2025. There is a vibrant ecosystem of small companies paired with large contract manufacturers in South Korea. Put that all together on TikTok and you have a recipe for absolute booming growth.

22:59And they kind of run the same fast fashion playbook that Shan and Taimu run, which is they see viral trends and hop on them very, very quickly because if you are so integrated with TikTok, you can see something start to bubble up and then create a product that serves that trend. One of the trends that I think that you should keep an eye on and something that APR has an eye on is salmon sperm facials, which unfortunately I didn't look up. It's supposed to be good at hydrating, plumping, and all around euthifying your face. It takes DNA extracted from salmon sperm. It's called polynucleotides, and you inject it with a needle under your skin.

23:34This is something that another Kardashian swears by, Kim Kardashian. I did read a Vogue article, and apparently it works. The author went and did and said, it hurts when you do it. But then a few weeks later, I was getting a lot of compliments on your skin. This is the next frontier for APR. They want to roll out something that clinicians can inject into people looking to euthify their skin. So they have a$180 magic wand that euthifies your face. Now to go along with a$1 ,000 injectable salmon sperm facial. How could you bet against this company? Well, Toby, you eat salmon roe. Why don't you just start injecting yourself with salmon sperm?

24:07Just everything from the salmon. No, South Korea is an absolute rocket ship in terms of cosmetics. It just recently topped France with exports of more than$10 billion to become the second biggest exporter to the United States in terms of cosmetics. All right, let's sprint to the finish with some final headlines. This morning, after an economic data blackout of more than three weeks, a ray of sun will pierce through the clouds. The Consumer Price Index, which measures inflation in the U.S. economy in September. Remember, the inflation report is like putting a couple of hot pizza pies in front of kids who just finished a soccer game.