Why Prediction Markets Are Turning Everything Into a Bet

Once upon a dismal day, Bob's ice cream van. Lacked creative vision. Maybe vampid appetite. I have an idea. Bob launched Canva and got into gear. Create the video in November. It went viral. A revival. at canva.com. Security program on spreadsheets, new regulations piling up, and audit tread? It's time for Vanta.

Vanta automates security and compliance, brings evidence into one place, and cuts audit prep by 82%. Less manual work, clearer visibility, faster deals, zero chaos. Call it compliance, or call it compliance. Get it? Join the 15,000 companies using Vanta to prove trust. Go to vanta.comslash calm. Once upon a dismal day, Bob's ice cream van And Gray. Although he had big ambitions, his socials lacked creative vision. That bad. Maybe vampid appetized? I have an idea. Bob launched Canva.

Create the video in the vampire. And make it the funniest I mean. Imagination to work at canva.com.

From the Vox Media Podcast Network, this is Channels. Peter Kafka, that is me. I'm also Chief Correspondent at Business Insider. And today we are talking about. The gambling industry. Except it's not called the gambling industry, instead it's called the boom business for prediction markets. which have gone from super niche to super mainstream in the last couple years.

There are many signs that prediction markets are a big deal or potentially a big deal, including inescapable marketing campaigns and sky-high valuations for companies like CalShi and Polymarket. Another indicator, Kate Nibbs, the excellent reporter at Wired, has started covering prediction markets full-time after proposing the idea to her editors. So this is one of those.

Peter has a lot of questions for an expert episodes, and I do have a lot of questions about prediction markets, starting with why now and are these things gonna stick around? Who's gonna regulate this stuff? And is this good for society? And wait, isn't this just sports betting dressed up as something else? Kate patiently walks me through all the stuff and I'm glad she did. I think you will be So here's me talking to Wireds.

I'm here with Kate Nibbs. She is the excellent technology reporter at Wired. Uh welcome, Kate. Thank you so much for having me. I was gonna describe what your beat is, but it's a new beat, so you tell me what is your beat and how did you decide this was a beat worth covering? I see it as related to some of my old beats. Like prior to this I was covering a lot of the AI copyright.

battles because I love anything that involves like a regulatory gray area. Like get me on PACER and I'm happy. And so You're like a tech mess. Yes. I love a tech mess. And I was watching h prediction markets explode in popularity while I was on maternity leave at the end of last year, thinking to myself,

somebody needs to cover this and then thinking to myself, I should cover it. So I came back to work with a memo for my editors basically saying, like, please put me on this. I really think it's a wild moment that is so wired in so many ways. We we gotta get Covery. Summ summarize the memo, because there's lots of things that are weird in tech.

And some things come and go, right? Like you could have in twenty twenty one said, I'm gonna be all in on NFT coverage, right? And maybe that would have been great. And then, you know, nine months later, who cares? Why is this worth something? that is you think is gonna presumably you think prediction markets are going to stick around are gonna be meaningful in some way. Wha why is that? I think that they're part of this larger story about the casinofication of everything and risk becoming

a bigger part of regular people's lives. There, you know, this is a story about gambling in a lot of ways. I I also think that it's a story about

changes that are happening to the global financial system that are troubling. I don't know if prediction markets will be here in five years in the same way that they're here now,'cause it really depends on what happens with r regulating these markets. But I think behaviors that they're engendering in people, like these these increased appetites for risk and gambling and taking wild financial chances and like gamifying our everyday lives and our consumption of news.

I don't think that those things are gonna go away. And so I see it as well. Yes, totally crypto and the pandemic. It's funny because I did dabble in NFT coverage and I wrote about this completely bonkerous startup that um allowed you to make an NFT of your tweets and then sell the NFT. And I did that and then I was the first and last reporter to do that. They were like, No, you're not allowed to sell your tweets at the NFTs.

Um I I tried doing that and no one wanted to buy my my my edit. And now, you know, I think the market's over there. But so I saw there's now a startup that is allowing people to

make prediction market wagers on how popular people's tweets are. And I really see them as spiritual siblings. I gotta look into whether they have any of the same founders or not. But yeah, it's all part of this I think NFTs are truly part of this bigger story, um, about the corrosion of American culture via gamifying and financializing everything. So I heard about prediction markets.

fr a few years ago the an a guy I know who's got a day job at media was telling me he made more money betting on politics on I can't if it's Kal She or predict it. Um, he was making more money uh because he thought he had a smart edge on on politics. I don't know if he still does. Um when did this go from weird guy, you know, who's in the sort of fringes of tech and media to mainstream thing that you see advertised nonstop? What what spurred that move?

I'm really curious if that guy was actually really good at betting or just really underpaid, but we could talk about that later. Um So there are a few different ways of looking at this. Like in one sense, this is pretty recent. It it mainly came around when there were um changes made that allowed calcium polymarket to really take off in the US.

Um in another way the story of this started earlier, um, when gambling, like sports gambling became legal and people just got more accustomed to spending money on wagers on their phones.

So sports betting gets effectively legalized in twenty eighteen and then rolls out on a state by state basis. It's not legal everywhere in the US we could talk about that. Yeah. Um but that's so you're you're you're tr you're saying okay, people got more used to sports betting doing Betting on things from their phones and that leads us to prediction market.

Yes. But then I do think that, you know, as you were saying, there's Predict It, which is a smaller election themed market. I actually played around on it probably five or six years ago. I made some money on John Fetterman winning. Um The concept of a prediction market is is pretty old. Like they've been around for a while. There was an uh you know, the University of Iowa ran an elections themed market. Predict it is is from New Zealand, I believe.

Um, so in a sense, you know, they started out as a sort of academic niche thing and then grew and then just had this explosive moment. I also think there is a very um compelling case to be made that these really are, as as um some of the people who work for these markets would have you believe, that these really are financial Instruments.

And that to talk about prediction markets, you can go back and talk about like the start of the commodities marketplaces in places like Chicago where I'm from. Um, you know, there are some really arcane laws about what you can and can't

wager on or or make trades on in prediction markets. One of them you can't um you cannot buy contracts about onion futures. And that all stems from This guy, uh, I think it was like in the sixties, um, basically seized control of the onion futures market in such a way that there was this huge outcry and it was

categorized as gambling and federal regulators just said, No more onions. This is like the end of trading places with the orange futures, if you've seen that one. Yeah, so I like I do think that there is like a reasonable position you could take is that this is prediction markets are an are truly an outgrowth of crazy futures trading.

And and again, the the idea, the reason I mean, you you're the expert, but uh my understanding is like the reason this stuff is regulated to any degree at all by by commodity future Yeah, C F T C Commodity Futures Trading Commission. Is because these derivatives and and and being able to hedge risk if you're in agriculture essentially or other industries is is a useful thing. And so if you want if you're in the orange business, but you also think that maybe

orange are gonna have a bad year, you can sort of hedge appropriately for that risk. And that's a real tool that people use. Aaron Powell It is a real tool. And then so the modern prediction markets are arguing pretty forcefully right now that they can be used in the same way for a wide variety of things. You'll you'll hear boosters of the industry talk about how um, you know,

energy firms are hedging on whether markets um and like whether the Strait of Hormuz will open or close. So Yeah, that is a So before we get too esoteric, let's just talk about a bit about sort of the the modern incarnation of these. I feel like these.

got national coverage in twenty twenty four around the election. I think Elon Musk was telling Joe Rogan that he had a machine that could predict the future and it turns out he was talking about prediction markets. Um and there was a lot of uh you know, are the prediction markets more accurate than the polls? And maybe there was some argument that it was. And then, maybe not coincidentally, you have a Trump administration that gets elected after twenty-four that seems remarkably uh receptive.

to this stuff. And in fact, Donald Trump Jr. is connected to both Calci and uh Polymarket. Yeah. So How how much of the boom is literally because we have a new administration and regulators and boosters who are in power who want this stuff to go to happen? I definitely think we would be having a very different conversation if we were looking at a different administration in power. Um

Because yeah, as as you mentioned, Donald Trump Junior is he's an advisor to both of these companies and I believe he's invested in polymarket as well. And then the Trump family, you know, they have Truth Social. They're actually planning their own prediction market. Truth, why not? Um yeah. Totally and so They're friendly, obviously, in that way. The federal reg the C FTC under the Trump administration has taken an extremely friendly approach thus far.

They are adamant that they are the proper regulator of these markets. And the reason they've had to come out and say, This is our jurisdiction, everyone else back off is because There's currently this huge push um from a variety of different like state regulators and authorities to try to get some of these prediction markets to abide by state gambling laws. And um, you know, that would really curtail how they operate. And yet, like the federal government right now is saying

No, we want them to grow and flourish and we don't want them to have to abide by state gambling laws. So there's so so yes, a bunch of stuff going on here. There's a turf battle right between federal regulators, state regulators, politicians.

It does not break down cleanly on Democrat Republican lines. So This could take forever, but can you broadly sort of explain Who's pro prediction markets politically and who is trying to push them back? I mean, presumably if you run a legal gambling company, you probably don't want competition from prediction markets. But I think those guys are also investing in it. So tell me how this how the battle lines

Yeah, they are a m it's a very m it looks like one of those boards where you got the crazy guy with all the different things. You know what I'm talking about. The red string. Um yeah, so it doesn't break down right versus left or Democrat versus Republican. Um the federal government thus far has been quite friendly, as we were saying. The C FTC it's not like they they're not regulating them at all, but they're taking a pretty um laissez faire approach. They don't want the states to have

jurisdiction. Various states in particular and they're they're out there doing interviews. Uh the head of the C FTC is doing op eds saying, Don't come near this. This is my deal. Yeah. He literally said see you in court, I think to uh Senator Cox and uh, Utah who um, you know, so there's some states like Utah where gambling is straight up illegal and they are coming at this from like a principled we don't like

wagering we um position. Morality, yeah, morality. Um but then there is also this huge push uh like from states like Nevada where gambling is really intrinsic to the culture and their um, issue with this is loss is not about morals. It's about, you know, getting tax revenue and having these upstart companies uh follow the same rules that like the casinos have have been made to follow. Um Kalchi is actually temporarily most of its markets are temporarily banned in Nevada as of Friday.

um because of these ongoing legal disputes, a court order went out um banning it. But so yeah, so there's federal versus state. And some of the players in the federal space are Republicans and some of the players in the states are Republicans and they're at each other's throats. Um, there's a big push by lots of different members of Congress. It's pretty bipartisan, um, to introduce legislation to put guardrails up in the industry. There is um

A piece of legislation just introduced today that would ban sports contracts, which are like by far the most popular. I think it's like the sixth or seventh piece of legislation on this issue introduced in the past. Few months, um there's uh you know, a bunch of new lobbying groups. Like Trump's ex-chief of staff, Mick Mulvaney, has introduced a anti-prediction market lobbying group called Gambling is on Investing.

Um, but then the um prediction market industry has its own lobbying group that actually has some democratic lawmakers on its side. So it's just this big messy battle right now. And so it it could get dealt with by Congress. Congress doesn't really do much in the modern incarnation, although they did pass the ban TikTok bill a couple of years ago. That's what we're doing. Yeah. Um

Um but it seems like it's gonna end up at the Supreme Court at some point as well. I think so. I I think maybe even as early as this year. Um and then part of the Thing that makes this so interesting is that this is an internet product, right? So lots of stuff is happening outside of the US. And in fact, I think

You tell me, but my understanding is most people in the US can't use Polymarket legally. Um you can explain to me how it works, but I know that Kelshi, you know, sent me an ad of the day of the Super Bowl and said, You should bet on the big game, and I downloaded the app.

And I connected it to my Apple Pay and it took all of a couple of minutes. And actually there was a problem actually funding it, but whatever. But his point is I was able to make a bet legally right away. I lost my money on the the length of the Super Bowl pregame, I guess. Um But when I go to polymarket, it either tells me I can't use it in the US or I can't use it in New York. And I'm pretty sure that if I do use it, I need to use a VPN andor crypto.

And it's confusing me because I see polymarket and calcium referred to as sort of equivalent, but it seems like there's a lot more friction to involve yourself in polymarket. So first of all, how how does How does something happen off books outside of the US in in a way that lots of people in the US can actually use? So most of the people in the US who are using Polymarket are

using it via VPN, a virtual private network. So as you're saying, these two companies get brought up in conversation a lot because they are by far the two leading companies in the space, but they are pretty different. Calci is currently federally legal in all fifty states. It like went through this licensing process with the CFTC. Um

Polymarket was actually banned by Biden's CFTC because it didn't go through what it the that version of the CFTC deemed the appropriate processes. Right? Right before or after the election? Mm-hmm. And he was very blasé about it and I think kind of flipping everybody off and thought it was a big hoot. So now they're allowed back in the US in a very limited capacity. There's like a wait list you have to join and they're only offering a very small smattering of contracts mostly on sports.

So when you hear about people using polymarket to, for example, like bet on events in the war in Iran, that's the international version, which people in the US are not legally allowed to use.

Um and yeah, so people in the US who are using it are getting on a VPN and then because it's crypto based, you know, they can go via a crypto wallet that's not necess I mean, it's traceable, but like there's not this huge enforcement push to like bust a random man in New Jersey for betting five hundred dollars on international polymarket. Um so yeah, they're like They're quite different. If you told me I had to make a bet on Polymarket

I'm sure I could figure out how to do it. I'm sure I could figure out how to do a VPN and a crypto. But it wouldn't be easy. Um, do you have any sense of sort of like when we talk about Calci and Polymarket, if they really are sort of roughly equivalent, or or one is the dominant one and the other one gets a lot of attention? I think that Polymarket, because it was sort of the first big name.

um might be coasting a little bit on its name recognition in comparison to how popular it is because Cal She is definitely for like just a regular person who wants to experiment with these, it just is way easier to use for people in the United States. But you gotta remember this is a global thing. And like people in Europe are super into polymarket. They're guy who made Hundreds of thousands, if not millions, of dollars on Donald Trump's election. So like

It is popular. It just there is this barrier to entry in the US right now. Can you help I I should have asked this at the beginning, but I'm not very good at podcasting. Can you size the market for me? I I I've been looking around. It's very hard to figure out how big prediction markets are. in general and how that compares to like legal betting. Yeah. So there

are a bunch of different ways to look at like the volume and how many trades are happening and it's harder to get a sense of the users. Um, I know that it is still a lot smaller than sports betting. When we're talking about sports budding. Then legal sports budding, like the volume that something like Kal She is doing is less significantly than the volume of something like FanDuel or DraftKings.

And I want to get to to the sports betting stuff in a second, but We while we're s talking about regulation, there is this ongoing discussion about insider trading and how do you regulate it.

And also, is there such a thing as insider trading? um on these prediction markets'cause I've heard people in the past say there is no such thing. You want people with inside information to bet because they know what's going on and that's democratizing information. Yeah. I can kinda see that argument, but it also it makes no sense if you if you have the ability to to profit directly from this, it le seems like it's gonna lead to all kinds of problems.

But for starters, who is go who is going to regulate this stuff? I just saw right before we started recording, a story crossed the wire saying, Oh, Polymarket now has insider trading rules. And I thought, that's interesting. Why did they just announce those? So d what do the what do the markets themselves say about insider trading and what do people who have the ability to fine or jail these folks say about insider trading?

So one thing to note is like when we talk about insider trading, we're usually talking about it in the context of like someone who's an insider at a company, like Like Google or something. Um taking non-public material information they know about that company and using it to profit in like the stock market and in traditional financial systems. Like you you know There companies have very clear definitions about what

non-public material information is and how you can use it. And the fuzzy thing about prediction markets is now that there are so many different forms of contracts Sometimes it's kinda clear because, you know, there are markets that let you bet on like how Google's earnings do what the Google's earnings look like. You know, you could see very easily how someone would insider trade on that if it was a Google employee making that kind of bet on a prediction market.

But then you get to And do the prediction markets say that's not legal? I mean Google would have a problem with that, obviously. Yeah. It's against their terms, and I think that that would fit the definition of an insider trading situation from the CFTC. Mm-hmm. But then you have all these situations like at the Super Bowl you could bet on like which song Bad Bunny would perform first and then People were saying, Well what about you know if

If one of the people who were the grass in his halftime show There were thousands of people involved in the production of that of that of that halftime show. Or were either directly involved or would have knowledge of that. Could they bet on that? Yeah, and like all of them have cousins that they probably told. Can the cousins bet on it? So So in situations like that it's a lot fuzzier and then

It really comes down to enforcement discretion here though. Like who is actually going to be arresting the cousin of the bad bunny grass for this? So there's two different things, right? There's what do the markets themselves say about this? Do they It seems like they want some kind of insider trading not to be legal, but they're okay with other stuff. So Culchie has really come out swinging

trying to establish itself as like the good angel on your prediction market shoulder versus like the bad boy polymarket. They have this whole enforcement wing and they recently release some information about insider trading cases that they'd flagged to the CFTC. Um

They were pretty small potatoes cases, honestly. But they're at least making one was like an editor at Mr. Beast content farm. But um yeah, their stance is you can't inside or trade and we're gonna we have this. We don't want you to do it, and if we find out about it, not only will we kick you off the platform but we'll report you to the Fed.

Yeah. Um the CFTC came out on X and posted that it looked like those cases that Kal She had reported, the fact pattern appeared to confirm or like suggest insider trading. But like who we'll see what happens if anyone gets arrested. I also because Cal She is like a licensed financial instrument.

it can find its users. So it find people. I don't think I don't think that's very well known that you could actually just straight up somehow owe the prediction market the money if you do something um that they deem illegal. Um Polymark is a funnier case though because it has this big It's more of a like ideologically driven company, it seems. Um, you know, a little more libertarian and it Shane Copeland the

CEO had come out and set he's the one who was like making a case for why insider trading was actually good. So I did I also saw a brief post on X about them coming out with some new surveillance tools for their international version, but I I actually was just trying to find any more details about it and I can't. Um, to my knowledge,

There ha hasn't been a situation, at least one made public where Polymarket has alerted authorities about insider trading or market man manipulation. There has been a case in Israel where the government arrested two people. Because they suspected them of insider trading on n information about war movements on poly market.

Right. And presumably right, you could like say you knew the US was gonna start bombing Iran on a certain date because you're in the the military or your cousin is or something. You could definitely get in trouble with the armed services for passing that information along, but it's possible that that would be legal according to either Polymarket or Colgy. I think it would

probably be considered against their TOS. But then it's like who is for for Cal She at least. Again, I'm a little I'm not sure what happened today with Plymarket, but it Whether or not it technically violated any sort of bylaws, it's just right now we are not seeing any

major effort to tamp down, especially with polymarket, which again is where there's more room for this kind of behavior because polymarket has more markets just in general. We'll be right back with Kate Nibbs, but first a word from a sponsor. Drömmer du om en nymålad fasad eller kanske bara en nyåljad terras. Sluta drömma! Med butiker i hela Sverige hjälper vi dig med allt från val av färg och kulör till terrassåja för alltan omöbler. Välkommen in till Alkros Studio!

Hej, det är jag från Riksbyggen här. Har du svårt att fokusera på den här podden för att det. Ja, du vet. Budgetar som ska hålla. Som ska planeras, energikostnader som sticker i höjden och allt det här. When you think of the most influential American politician of the 21st century, you probably think of a man. But there's one woman who might fit the bill. She never thought she'd be in politics. but went on to break what she calls the marble ceiling.

Тен не цей, вайн че одесмейка лист в тінс за вент. and we'll do those. What? This was in this century. Really? So the marble ceiling it's not a glass ceiling anymore. It's a marble ceiling. And they all had it lined up that you go next and I'll go next and I'll go next. And I we're like, well, you know what? We've been waiting over 200 years. We're breaking in line. Mancy Pelosi, the longtime Democratic Speaker of the House.

Live on stage at South by Southwest in Austin. Today explained. Every weekday, and now on Saturdays too.

And we're back. So we've been talking about the the different things you can bet on. And you brought up the French guy who made all the money betting on Trump in 2024 and that lit up a lot of signals for a lot of people like, oh, I could I could bet on things other than sports. That said, I see a ton of Calci ads coming across my TikTok. Um uh my hunch is is that the bulk or a a meaningful amount of at least US

prediction market betting is sports betting. And I'm assuming that is in states like Texas and California, where you can't legally bet on sports, but you could bet on sports through CalShi. So first of all, d do we have data about sort of What percent of of the bets are actually sports bets versus everything else? Yes, there there have been a few different studies and it's, you know, higher than eighty percent in some cases perhaps higher than ninety percent.

And so yeah. It's sports betting. It's sports betting. Or sports. So it's it's just sports betting that you could normally be doing on FanDuel or DraftKings.

Yeah. Although they would there's like all these different uh you know, they're technically different because you're buying But we're still scratching the same age. Yeah, yeah. But you're putting money down on the outcome of a sporting event. So yes. So that is, you know You can't talk about prediction markets without talking about the sports component because that is the majority of their customers.

And when the polymarket and Calci people are speaking to the consumers and to investors is sort of that the way they imagine the market is gonna go, or do they say, No, no, literally everything of one day will be something you could I know the Kelshi guy had some some st some quote about everything should be financialized and

You should bet on everything. Is that what they really think is gonna happen or is this really effectively a sports betting competitor that's sort of gussied up with with other language and and regulations? I think right now anyone who's honestly looking at these markets will admit that as they function now, they are primarily competitors or complements to sports betting because that is just where the volume is.

Um like both projects did not start out intending to be these hubs of sports betting though. I I they you know, they definitely both come from these philosophical schools where they think that they are genuinely useful forecasting tools and they really endorse the idea of allowing people to make money predicting the outcome of all sorts of different future events. More about like politics and and world news. I I think like that was more tied to the original idea.

But yeah, so they basically fell backwards into being really big players in in the sports wagering world. So tease out the the

Prediction markets are good actually argument. So leaving sports betting aside,'cause it seems like Either that's going to be legal or it won't, and people will either enjoy it or they won't. But on the one hand, I think a lot of people hear, why would you want to be betting on war or or or any any of these outray things that you can bet on a prediction market? And I can imagine a counter is what do you think?

people in financial services do all day? What do you think they're doing when they're betting when you're making contracts on the price of oil, right? You're betting on what's gonna be happening in the Gulf, et cetera. Um you're you can make hedge funds can make bets essentially on on who's gonna win an election because they're figuring out how regulation's gonna work. Why shouldn't this be available to

everyone. If if yeah if f if sophisticated financial institutions can do it, why can't I do it? Yeah. Like they're more or less the the argument? That's one argument is you know, this democratizes something that's available to quant firms and traders, like let's let retail people get involved. They should be able to have a sa say, we're all consenting adults here. Why do you have to get a license to be able to bet on who wins? Which like

I find fairly reasonable, honestly. Like although for me it's less like making geopolitically uh tilted financial transactions is good and everyone should do it and more it's kind of all slimy, so Why can all get in the muck? Um, but then there is also this idea that these are valuable forecasting tools and that, you know, we as a society are better off if we can glimpse our future. Um

And these are ways to do so that are more effective than others. Um whether or not that's true is like a whole uh thorny debate because there you know, there are instances where it was clear that the prediction markets did do a better job. Than traditional polling. case in point, some of the most recent um US elections.

But, you know, uh it's like as they grow more popular, they can increasingly become victims of their own success because there will be more parties involved attempting to manip manipulate the markets and Um they become less of a tool to get like a pulse check on how regular people are feeling and more of just a tool to see how market makers and certain forces that are able to to shape the market feel and they just lose their efficacy basically. Um yeah. They gain more traction.

There's also one of the other things that are the things that are. Yeah, that's an argument. And but again, it's like we're still kind of too in it to know whether whether that's true or not. We'll be right back, but first a word from a sponsor. What's up everybody? It's Cam Hayward, your Steelers captain and host of Not Just Football. And this week, we brought on the legend.

Lil Wayne is in the building, greatest rapper alive, certified football head, and now running his own sports agency, Young Money Sports. We got to know how it started, what the vision is, and how Travis Hunter ended up choosing Young Money. We went deep in the football, the Packers, the draft coming, the Pittsburgh, NIL, and what it really takes to build an athlete's brand from the ground up.

We talked music, the Carter 6, what's coming next, and stories you have never heard before. And we got into his legacy. New Orleans, cash money at 11 years old, and 25 years at the top and what still drives him. This one is different. This one is special. In Pittsburgh, the draft is coming home. Grab your ticket for Cam Hayward's draft party on April. 3rd at notchfootball.com and use code Mr Carter. That is M-R-C-A-R-T-E-R for a pre-sale discount and follow us on socials. Let's get it.

This week on Version History, our chat show about the best and worst and most important products in the history of technology, we're talking about a gadget that was meant to be used on phone lines and was eventually used by the military, and then finally changed the music. Business forever. That's right, of course, I mean the vocoder. The thing that let us all play our voices like an instrument and changed the way that we.

fun guests we have a really fun story to tell all of that is on version history on Wherever you get podcasts.

And we're back. One of the industries that's become very interested in this are the media and entertainment uh industries, um, all kinds of of big mainstream media organizations, CNN, CNBC. I don't believe Europe. uh employer at Conde NASA's doing this. I don't think the folks at Axel Springer are doing this at Business Insider. I don't think Vox Media is doing it. But a lot of these folks are signing up to do deals with

Cal shear polymarket. I think essentially to sort of like treat them like a ticker and say you can see what people think about the the future of of oil. Here. I don't think they're participating directly in it, but I know the sports leagues are also interested in this. Baseball just signed up.

Um, that seems to me to be a direct connection. Like, all right, this is sports betting, so we wanna be involved in it. And we used to hate sports betting, but now that it's sports betting is legal, we wanna be involved in it. Um and then I, you know, I was talking with Matt Bellany from Puck a couple of weeks ago about the Oscars and saying, you know

You know, you could bet on whether Michael B. Jordan or Timothy Chalonet was gonna win best actor. I bet on Timmy. I'm sorry to hear that. So I lost my money. It's all right. I I well you know why?'Cause Matt Bellany gave me a bad insider too. But He was saying, Yeah, I I we think the Oscars will definitely want to incorporate this in some way. We already saw it with the Golden Globes because it will bring more attention. Yeah. Uh to the Oscars and that's fundamentally what they want. So

How do you think this stuff is gonna show up in sort of modern media and entertainment? Yeah, I mean I agree that it will become more entrenched. I was actually surprised there wasn't something at the Oscars this year since it had been at the globes and I think like the general public liked it and I saw the viewer Oscars for or the viewer numbers for the Oscars seem pretty bad, so I'm guessing that they're gonna They're gonna drop every year because the Oscars are less interesting. Yeah.

Bring back the slap. Um, but yeah, I think we're gonna continue seeing this. I mean, if I was a media executive, which I'm not for like a million reasons, um is putting aside all of like the moral issues about these platforms, I would certainly be looking at how to get in on the action.

Um, because this is you know, the media has been in like a prolonged existential crisis and it's not getting out of it anytime soon and we're facing Google Zero and Uh, you know, not everyone can have wordle, so someone's gonna be looking for ways to incorporate these more than just as a ticker. There was a Verge piece that came out recently about how a an independent journalist had been um propositioned by one of the Rick Ellis.

Said no, but he had been um asked to um write content that incorporated information about the markets. I think someone's probably gonna take that deal. Um and also I really would not be surprised if we didn't I don't wanna speak this into existence, but I just think it's coming, that there will be some sort of platform where like in s in addition to comments.

the uh readers can purchase a yes or no market on like whether something from the story will happen. Like they will be more entrenched in in the media moving forward. Um and I'm also just waiting. I really think it's probably already happened, but there's gonna be some sort of horrific scandal involving insider trading and journalists. I I would bet on that. Because we're just paid to be a little bit more than that.

Unforeseen and obviously and very easy to foresee consequences of this stuff. And it's already we've already crossed into the icky zone a bunch of times. We had that over. There was a big a lot of people were betting on When When the the uh head of Iran would be taken out and whether that qu whether his death qualified as him being taken out or not. There was a story last week about an Israeli journalist.

who'd reported on bombs falling in Israel and then was harassed by at least one, probably several people who were making a bet on that and wanted him to change his reporting. Um, given the fact that there it seems like we're gonna have some kind of prediction market that will be legalized in the US and will certainly operate outside of the US.

It seems like all of these, uh, what do we call'em, externalities are going to happen and no one's really gonna have responsibility for it. I'm sure if I'm sure Poly Market and Kal She would say they don't want Israeli journalists to be threatened for making accurate reports about bombs falling in Israel. That said, I don't know what they can do to stop it. Are are there any guardrails around any of this?

So CalG does have narrower set of parameters around like what kind of markets it offers. So it doesn't offer like death or war or assassination markets, which like helps, I guess. Whereas Polymarket it I don't think it offers like straight up assassination markets, but it does more war themed.

So the fact that there there's a wider variety of markets from which to choose and then get mad a at a journalist about how they reported on it, um makes it seem like polymarket probably has more exposure here, but then it's also covered like right now, because all of that sort of action is happening and it's offshore um iteration, you know,

the question of whether any US law enforcement agency is actually going to pursue it for anything is an open one because right now it hasn't. So I don't think we're gonna see um this sort of behavior stop anytime soon unless there is a change in in the way that enforcement is approached.

And and is there any indication and again they were talking about Calcian polymarket, but in theory anyone could start one of these things and they could start it outside the US and there's this huge rush of of new ones coming up. I don't know if any of them will will um And I'm sure you could have versions of like, you know, you could have Elon the v the the groc version of this where you can make crazy bets that other people won't let you make because

believes in freedom you can do that. It's probably happened already. Um do the the folks from Polymark and Kelshi talk about responsibility that they themselves have? for again, any of these sort of externalities about about about people they could say, look, we don't want you to harass people and if we find out you have, we'll we'll kick you up. But they're also creating the machine that puts all this in motion. And do they talk about responsibility for any of that?

Yeah, I mean they definitely do uh uh especially Calci is really trying to position itself as like the responsible version of a prediction market. So yes, they're definitely talking about it, but They remind me a lot of, you know, all of these other big tech platforms that talk all all day long about responsibility, but then

What are they actually gonna do? Like the meta case that's ongoing. Well, they also stopped talking about it after the last election too, right? They said, Well, that was part of the old days and now we're yeah, now we don't have a trust and safety team anymore. Actually some of that was happening before the election, but yeah.

I we've seen recently they've sort of jumped on th these conversations about responsibility. I think in response to the growing backlash against how the prediction market in industry is currently operating, like the uh i in the past few months we've really seen this major push to make sure everyone knows that they do have rules and they're not just a Wild West. Um and that definitely came in response to a bunch of people calling them the Wild West again and again.

In in the same way that y Facebook used to take out ads saying, We think regulation is good and we would like to be regulated and we call on Washington to regulate us and they don't take those ads out anymore.

Um but it but the point is it was it was they were taking out those ads because there was an external push to get them to at least say that they cared about it. Totally. And I bet you could I mean if Cal She's uh marketing team wanted to save a few bucks, they could just like literally copy paste. A few words and send out what anyone was doing. What so you've been you've been on this beat for how long? Um since

February. So it's very new. What is the It's March. Okay. So you're brand new. What is the craziest prediction market bet that has come in for you? Which which one what's what's your what's your best bet so far? Oh my gosh. I mean the whole scandal around all the betters being really, really mad that Kalchi didn't pay out when Kameini died was wild to watch.

I did feel bad. Oh, I mean I meant have you made a have you made a crazy bet yourself? No, no, no, Peter. I cannot participate in these markets anymore. You have to. How else would you understand how they work? I mean if yeah I know maybe I should ask Conde to do like the McKay Coppins Atlantic piece where they gave him ten K. Yes.

Absolutely. I okay let me talk to Katie Drummond about that after this. But no, so far I've been like playing it safe. I'm not, I'm just watching. I'm actually really interested. I g I gotta ask. um my editors too, like whether we're going to put anything in our employee handbook about whether we can use these markets or not. I know CNN um doesn't let its reporters

um participate in prediction markets anymore. I was I was on a CNN podcast last week and uh they they told me that and I was like, I don't know if Conde has that role. Um, but yeah, right now playing it safe, not participating, but after we get off the phone, I'm gonna ask for ten thousand dollars. Yeah. Exactly. They can still afford it. They still have office. They still have fancy offices. So you lost the Timmy Chalamet, but is there anything else that ha is there anything you've won on? Uh

Um I'm trying to think. I think I well no, I I made what I think was a good one bet on Joan Cornyn, although we still have to see how that pans out. Um, definitely lost money in the Super Bowl uh pregame. Yeah, no, I'm not a good better. No here's the thing. But it is remarkably easy to bet on Calci, I will say. You just download it, it goes right to your Apple Pay. And that's the the last thing, right? Is do you think and and then I we're just guessing here.

We have not seen Apple or Google step in and say, hey, we're a little concerned with sports with legal sports betting happening on our phones. Incredibly easy to do that. I can't imagine they're gonna say anything about prediction markets until they're forced to. But any murmurs about them being uneasy, about people using their devices to make these bets? You've just given me a really good story idea. I hope that everyone else who's covering this industry.

Um not to my knowledge, but I'm definitely gonna look into that um because I'm sure there are people with feelings. I predict that this story is gonna go on for a while and we will talk to you about this again, Kate. So thank you for coming on. So happy to be here. Thanks again to Kate Nibbs. She's excellent. Really glad she came.

Thanks to Charlotte Silver, who is also excellent. She produces and edits the shows. Our advertisers are excellent because they bring this show to you for free. You guys, of course, are excellent as well. We are all excelling in excellence.