New Website Lets Students Bet On Grades

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Many parents pay their kids for bringing home 'A's. The web startup Ultrinsic.com will let college students wager cash on their ability to meet — or exceed — a certain grade. Ultrinsic's co-founder, Jeremy Gelbart, says the venture will motivate students, while critics fear it could encourage online gambling.

NEAL CONAN, host:

Teachers and parents will try almost anything to motivate students. Some schools even award cash for a job well done. But now, a website goes to another level and lets college students bet on their grades, high or low, with wagers starting at $25. The founders of Ultrinsic argue the venture is a high tech motivational tool. Some critics call it online gambling. Others worry it will mean even more grade grubbing in college.

So, students, parents, teachers, is it a good idea for students to bet on grades? 800-989-8255 is the phone number. Email us: talk@npr.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION. Jeremy Gelbart, co-founder of the ultrinsic.com joins us from our bureau in New York. Thanks very much for coming in.

Mr. JEREMY GELBART (Co-founder, Ultrinsic.com): Thank you, Neal.

CONAN: And how does this work?

Mr. GELBART: How does it work? Well, it started about - I'll tell you how it started. It started about three years ago. The co-founder and I, Steven Wolf, we were hanging out on a Sunday afternoon. And I had an exam the next day, but I don't want to study because we were having a great time.

CONAN: Mm-hmm.

Mr. GELBART: So he said to me, Jeremy, if you get an A on the exam, I'll give you $100. But if you don't get an A on the exam, I'm going to give you - you have to give me 20. So I took him up on - up on the offer. And I said, I'm going to go take a hike and study, so I'll see you later.

CONAN: Mm-hmm.

Mr. GELBART: So I went. I study for the exam and I got an A, and I got the $100. So at that point, we realized that this would be - this is a great incentive for students, so how can we go ahead and bring this to every student in the nation and internationally?

CONAN: And...

Mr. GELBART: So - yeah?

CONAN: Go ahead. And you started where?

Mr. GELBART: So, we started - after, you know, this is three years ago. But we started on our operation in the last fall in New York University and University of Pennsylvania. And it was pretty successful. We had about 600 students that use, started using the program. And, you know, now we just launched in 34 additional schools throughout the nation and...

CONAN: Online gambling is illegal in this country, so this is called something else?

Mr. GELBART: Yeah, these are incentives. It's, you know, the definition of gambling is generally accepted as a game of chance. And, you know, the - and grades are based on - are evaluation of the students skill in that class and how well he did. So there's no chance in - there's no -it's a game of skill if you'd have to classify it...

CONAN: Mm-hmm.

Mr. GELBART: ...one way or the other.

CONAN: So you evaluate the bet. If Albert Einstein Jr. gets on your website and says, I think I'm going to ace Math 101 or Algebra 101, you might tell him, that's not much of a bet.

Mr. GELBART: Yeah, there's hes probably going to get an A anyway, so he doesn't need an incentive. So, obviously, we - our calculations are based on the students expected performance. And we - all the probabilities are generated in a way that the students get rewarded only when they improve their grades from their expected performance.

CONAN: From their expected performance. And so, you have to have a fair amount of information about each one of the students.

Mr. GELBART: We try to get as much information as we can to provide a student with the best incentive, because, you know - because as incentive work, they all have to be customized. You know, you - it's a -if you're talking to a D student, and to give him a certain money if he gets an A is not really an incentive because it's very unlikely to affect to student.

But what we could do is we can actually provide that D student with an incentive to get a B because it's customized.

CONAN: Jeremy Gelbart, co-founder of Ultrinsic Motivator Incorporated. 800-989-8255. Email: talk@npr.org. Students, teachers, is this a good idea? Let's go to Dan(ph), Dan with us from Rohobeth(ph) in Delaware.

DAN (Caller): Hi. Yeah. It seems to me, at least my general - my initial opinion, is that this is a negative. It's going to encourage students to bet low, to aim low and to make the lowest possible they can to be certain they can meet their obligation with the site or whatever it is. As I was on hold, I heard that you actually try and customize to the student, getting information on the student, but I'm not sure how far that can go. And are you really able to say, you know, as a student who is on the verge of B or C, why would you not bet C hope, you know, to not succeed? And am I going to make more by doing better than what you give me? Or how does it work?

Mr. GELBART: Well, let me explain a little bit the way it works. That is a student comes to our website and they create an account. They put in their GPA and their past academic history, the grades that they've received previously - unless they are freshmen or a transfer student, of course. And then, based on the classes that they're taking this semester, they can create various types of incentives.

For example, if I - let's say I'm a C student and I'm taking my Math 101 and I'm shooting for a B plus or higher, right? So then - and I want $100 incentive to get that B plus. So we'll go ahead and calculate how much a student has to put down and contribute towards the incentive, and how much we'll contribute. So, for example, that C student trying to get a B plus, we might say, okay, we'll contribute $50 to the incentive and you contribute $50. And that's $100 incentive. So if they get the B plus or higher, then they get the whole $100. And if they - so they're - and so they're rewarded with an additional 50.

CONAN: But if they get a B minus?

Mr. GELBART: And if they get - no, if they get a B minus, then they don't get the reward.

CONAN: They're not...

Mr. GELBART: But then, again, they still have - had improved because they are C student.

CONAN: And you get to keep their 50?

Mr. GELBART: Yes.

CONAN: Okay. So you're trying to balance like any bookie - you should excuse the expression, you're going to be trying to balance the - your books, so you're going to win in the long run?

Mr. GELBART: Well, right now, we're not focused on the profit margins and trying to get whether how much percent we're going to win versus the student is going to win, because we're just focused on getting the concept out there, of incentivizing the students in this manner. And, you know, down the line, we do have various types of ways to, you know, profit, to make money from this venture. But we see - in general, we see that if we could incentivize students five percent more than they are now, or 10 percent, we're going to create a lot of value in the economy in general. And we have ways to extract some of that value for ourselves. For example, other services and it's - you know, other services such as book sales or something like that.

CONAN: The - again, to Dan, thanks very much for the call. To use the, perhaps, unfortunate analogy of a bookmaker, the typical ways to charge 10 percent extra on a losing bet called vig or vigorish. So you wouldn't do that?

Mr. GELBART: No. Right now, we're not doing that.

CONAN: Okay.

Mr. GELBART: But we have - but it wouldn't make sense. Let's say for -you know, down the line where we said, if we were - when we go ahead and come out with numbers and proving that this incentive model, it would be - it would only be fair - if we can incentivize students to improve their grades, they should pay for that. How they pay for that exactly? You know, is - there are various ways, whether it's - whether the statistics are in - the probabilities are in our favor or their favor. However it is, there are other ways to profits.

CONAN: And I forgot Dan's other point. Is it possible to hedge your bet and bet on a low grade?

Mr. GELBART: It's all - basically, the way it works is that we have something called grade insurance, where students can actually - if they get - if they could say, I don't want to get a coverage. If I get an F in my class, I actually want to get paid out. And - but the amount -we're very careful not to incentivize students to do that, that they cannot - they can't go ahead and take a class and bomb it and get like $100,000.

This is only - like let's say, you know, if a student is putting down $1,000. Even in the least expensive schools, they put $1,000 in three months of time and to do well that at the end of the semester, let's say they get - there something happened right before the final exam, and then they did do poorly, they can get some sort of, you know, maybe $100 as almost a consolation prize of okay, I didn't do well but, you know, maybe I could buy - help him buy books for next semester or something.

CONAN: Mm-hmm. Okay. And the $25 is the minimum bet? What's the - how much can you bet?

Mr. GELBART: There is no - the way that we - that it works is that there's a - the maximums are basically in place, according to - per student. It varies based on how well - you know, what type of student they are and what - how - want incentives they've created. So - but the way we look at it, you could probably win a few hundred dollars, at least in this semester, for the schools that we're in. But as we learn more about the schools and the - and how the incentives affect the students, we're going to be increasing that that the student could win over the course of the whole year, over $2,500.

CONAN: So you're talking about relatively small amounts of money. If a young student, John Rockefeller, wanted to make an enormous wager on his sociology class, that's not what - you wouldn't be asked to cover a $10 million bet?

Mr. GELBART: No. I mean, the focus - our focus is just as the student's focus should be - and most students are - is that, really, an investment is in school. And the fact is that some students are paying $40,000 a year in order to get a good grade and get a good job and learn. So that's a, you know, that's a big bet. We're not trying to - we're not making the bet bigger than that, but we're just trying to, actually, make the incentive more short-term. Rather than, oh, yeah, four years down the line, I'm going to make some money by getting the job, we're making the incentive - at the end of the semester, I'll go - I'm going to get $100, $200. It's more of a psychological - it has more of a psychological effect than value proposition.

CONAN: Let's go next to James(ph), James with us from Tallahassee.

JAMES (Caller): Hi. Thanks for taking my call.

CONAN: Sure.

JAMES: I'm a student at Florida State, currently. And I just think that this idea is fantastic because I've always been a student that's more interested in the knowledge gained, than necessarily if I get an A or a B. But I think that this could change that definitely. And I think it's a fantastic incentive. And my only concern is the legality of it, considering it is pretty much gambling.

CONAN: Has anybody questioned the legality, Jeremy?

Mr. GELBART: People have questioned the legality, but more because they can't - they don't know how to categorize it - and it's a new idea -rather than whether it actually is legal or not. Because we actually -we went ahead and got a legal opinions from very well respected lawyers and - who've told us that this - in the form that we're doing it, this is completely legal because it's based on - its skill. I mean, if you were to say that this is not skill, then you have to say that grades are ambiguous. And then - then the school is gambling, too, because you're paying a lot of money. You're putting down money. What happens if you don't learn and you don't get - and the grades are - and that you get any grades that the teacher wants assigned to you? So it's definitely skill.

JAMES: All right. That's...

Mr. GELBART: Yeah, but I guess - yeah, and in Florida, so hopefully we'll come to Florida State soon.

JAMES: All right. Cool.

CONAN: Thanks, James, very much for the call.

JAMES: You're welcome.

CONAN: And good luck with your grades, James.

JAMES: Thank you.

CONAN: We're talking with Jeremy Gelbart, cofounder of Ultrinsic Motivator Incorporated, a site that lets students gamble on their grades. You're listening to TALK OF THE NATION, from NPR News.

Let's go next to Bernard(ph), Bernard, with us from Sacramento.

BERNARD (Caller): Hi, Neal. Thank you very much for taking my call.

CONAN: Sure.

BERNARD: I'm a teacher in the Northern California - Sacramento region. And my concern is not so much the gambling aspect, which is a whole another discussion, but it's the behavioral change that we're leading students down that particular path, that is a major concern, because they're not focusing on the journey of getting the education and understanding the learning and then being able to apply it, they're focusing on the grade.

And what we see today is that there's way too much, probably, focus on the grade as it is. Now they're going to be incentivized monetarily to go after that grade. And I don't know that that makes a really good combination in the education arena.

CONAN: I think the practice is known as grade-grubbing. Is that right, Bernard?

BERNARD: Correct.

CONAN: All right. Does this encourage grade-grubbing, Jeremy Gelbart?

Mr. GELBART: For those students that are grade-grubbers, if that's the right word to call them, that - it already - that already exists. And what we're doing is not - would not increase that because, as I said before, there's already that incentive in there because - to go ahead and go tell your teachers, oh, I want a better grade. I need it, because I need to get into this graduate school or this thing, this job. But we - the - yeah, we don't think it's going to increase that, because let's say for - if you take it and you mentioned that certain - like, the students are already focused on - they're focused on the grade.

But, like, take the - consider - take the example - like, for me, I was in, you know, I was in school. I graduated fairly recently. And I - the - I love learning. I love my classes. But there were some times that I had to stay up all night and study for an exam. And that's not learning. I enjoyed the classes, but that's, you know, that's like studying for an exam. And that's what - that's where every student needs that extra push and put that extra incentive.

But I hear your idea that the whole idea of - maybe the whole idea where students really should be learning for the sake of learning. But, you know, there is that reality that they do need an extra incentive. You know, everybody does, you know, needs an incentive. And...

CONAN: But it might - I think what you're really saying, it might be an extra incentive to go up to the professor afterwards and say, how could you give me a B?

BERNARD: Right.

Mr. GELBART: But...

BERNARD: And it's more not learning for the sake of learning. It's learning for the sake of application. You know, when you look at the Internet, the fast pace by which we operate today, this just appears to be another way to shortcut or circumvent the system, when in essence, we need them to focus on, okay, there are certain elements and expertise you need to gain in order to be successful and productive out in the workplace.

Mr. GELBART: Well, this is a - the way we look at Ultrinsic is it's a tool for students and for professors. You know, it's the professor's responsibility to create a curriculum that actually, you know, teaches -or the professors and the schools - to create a curriculum that will actually help the students learn. And - but this is an extra motivational tool just as grades are themselves.

I mean, if you look at, you know, the name Ultrinsic that we came up with it, we recognize this is - the name is derived - the etymology and we actually created, take it - we take ulterior motivations to create intrinsic love of learning and a love of knowledge. So we know this is an ulterior motive, but we think that when students are - when they would have a choice between going ahead and partying versus going to study for the books, they're going to choose study for the books because they're going to get the extra dollar.

And then when they say, oh, look, I actually like this astronomy. I'm going to - maybe I'll be an astronomer. So that - that's how we think. We recognize that students aren't necessarily always focused on school, but they need that extra incentive in...

CONAN: Bernard...

Mr. GELBART: ...order to get that learning for the sake of learning.

CONAN: Bernard, thanks very much for the call.

BERNARD: Thank you. I appreciate it, Neal.

CONAN: All right. And let's see. We go - I think we can get one more caller in. Mickey(ph). Mickey, with us from Detroit.

MIKEY (Caller): Hi. It's Mikey(ph).

CONAN: Mickey. Excuse me.

MIKEY: Yeah. I just wanted to make a quick comment. I'm a sophomore in college now, and my biggest problem with high school was that the grades were more reflective of jumping through hoops, how much homework you did. And it was very much just how much, you know, small work you did. It didn't have as much to do with what you were learning. And what I like about college is that the grades seemed to be a lot more reflective of someone actually getting the subject and someone actually learning it.

And that, I think, this whole incentive program puts off a whole disconnect between the learning, and it just becomes studying and rote memorization, which, you know, might be good on paper. But, I mean, I don't think it really improves anyone's chances of actually learning the topic or, you know, applying whatever subject it is they're betting on.

CONAN: Well, maybe not you, but I don't think it's - anybody's going to force anybody to go on this. And it might work for some people, Mikey.

MIKEY: Yeah, but the thing is, it just creates a giant disconnect. And the thing is, you know, you get an A in a class, you get a couple hundred dollars or whatever. Cool. But you don't actually learn the subject necessarily, and you might not actually be able to apply it.

CONAN: Well, maybe an employer might think of an A was better than a B in any case. But, Mikey, thanks very much and good luck in school.

MICKEY: Yeah. Thank you.

CONAN: And, Jeremy Gelbart, thank you very much for your time today. Jeremy Gelbart...

Mr. GELBART: Thank you. Thank you so much, Neal.

CONAN: Jeremy Gelbart, co-founder of Ultrinsic.com, a site where students bet on their grades. He joined us from our bureau in New York.

Tomorrow, the legacy of Martin Luther King. Talk show host Glenn Beck plans a rally this weekend on the anniversary of King's "I Have a Dream" speech, from the same spot. We'll talk about what lessons you draw from Dr. King's life and work. Join us then. I'm Neal Conan. It's the TALK OF THE NATION, from NPR News.

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