1 00:00:02,021 --> 00:00:07,021 Downloaded from 9jaRocks.Com 2 00:00:08,021 --> 00:00:13,021 Official 9jaRocks movies site: 9jaRocks.Com 3 00:00:09,947 --> 00:00:13,075 Today we're watching Argentina and Spain in the World Cup Final. 4 00:00:13,784 --> 00:00:17,079 {\an8}We're in Las Vegas, Nevada at the Mirage Mega Mansion. 5 00:00:17,705 --> 00:00:19,999 This is a Winible World Cup watch weekend. 6 00:00:20,750 --> 00:00:26,005 Winible is essentially OnlyFans for the sports betting creator economy. 7 00:00:26,088 --> 00:00:30,968 The guys in this house have made millions of dollars on prediction markets, 8 00:00:31,052 --> 00:00:33,679 probably eight figures just over the course of the World Cup. 9 00:00:34,263 --> 00:00:35,598 I like betting on Kalshi. 10 00:00:35,681 --> 00:00:37,224 Trading on Polymarket. 11 00:00:37,308 --> 00:00:40,311 At the beginning of the World Cup, you get to pick 12 00:00:40,394 --> 00:00:42,480 who you think is gonna win the whole World Cup. 13 00:00:43,022 --> 00:00:48,903 So, before it started, I put 5,000 dollars on Spain to win the whole thing. 14 00:00:51,572 --> 00:00:55,868 So I put Spain to win. 15 00:00:55,951 --> 00:00:58,746 Like, when you wake up, you gotta put on your lucky underwear, 16 00:00:58,829 --> 00:01:00,289 take a deep breath, say a prayer. 17 00:01:01,540 --> 00:01:03,834 I think prediction markets are low-key taking over the world. 18 00:01:07,755 --> 00:01:11,634 Welcome to day four of flipping 1k into ten grand on Polymarket. 19 00:01:11,717 --> 00:01:15,012 Now, to an industry skyrocketing in popularity, prediction market. 20 00:01:15,096 --> 00:01:16,514 What are you guys talking about? 21 00:01:16,597 --> 00:01:19,308 Prediction market app, dude. You know, online peer-to-peer betting. 22 00:01:19,391 --> 00:01:21,602 Hundred dollars on Kane to score. Done. 23 00:01:22,186 --> 00:01:28,067 10K on Jake Paul makes you 90,000 dollars? 24 00:01:28,692 --> 00:01:32,071 There are two major players, Kalshi and Polymarket. 25 00:01:32,154 --> 00:01:33,989 {\an8}They really don't like each other. 26 00:01:34,073 --> 00:01:38,327 {\an8}Kalshi has just posted its most lucrative market ever. 27 00:01:38,410 --> 00:01:40,412 {\an8}Who will win the finals of the World Cup? 28 00:01:40,496 --> 00:01:41,580 It is shocking 29 00:01:41,664 --> 00:01:44,166 the extent to which prediction markets have proliferated. 30 00:01:44,250 --> 00:01:49,713 Thanks to prediction markets, you can now bet on basically anything. 31 00:01:49,797 --> 00:01:51,465 And I mean anything. 32 00:01:51,549 --> 00:01:53,425 From Taylor Swift's wedding date 33 00:01:53,509 --> 00:01:56,053 to the chances of an Iran nuclear deal. 34 00:01:56,137 --> 00:01:58,556 We're gambling on war. 35 00:01:58,639 --> 00:02:01,142 The longtime teleprompter operator for the president. 36 00:02:01,225 --> 00:02:03,853 {\an8}He's on leave now for alleged insider trading. 37 00:02:03,936 --> 00:02:06,856 The long-term vision is to financialize everything. 38 00:02:06,939 --> 00:02:09,900 This is my life. Me, just, like, refreshing, refreshing, refreshing. 39 00:02:09,984 --> 00:02:14,155 {\an8}This is the hyper-financialization or hyper-gamification 40 00:02:14,238 --> 00:02:15,948 {\an8}of our entire lives. 41 00:02:16,031 --> 00:02:17,575 {\an8}- Hussein Obama. - Yeah! 42 00:02:18,576 --> 00:02:23,622 And the whole world unfortunately has become somewhat of a casino. 43 00:02:35,176 --> 00:02:37,094 I've been writing about the prediction markets 44 00:02:37,178 --> 00:02:39,763 for almost 25 years now. 45 00:02:40,389 --> 00:02:44,226 {\an8}The first real prediction market that we know of was started 46 00:02:44,310 --> 00:02:47,396 {\an8}at the University of Iowa in the late 1980s. 47 00:02:48,105 --> 00:02:51,108 They started with a really obvious one. 48 00:02:51,192 --> 00:02:55,696 How likely a candidate was to win a presidential election. 49 00:02:55,779 --> 00:03:00,242 You would buy a contract in Michael Dukakis 50 00:03:00,326 --> 00:03:02,328 if you thought Dukakis was going to win. 51 00:03:02,411 --> 00:03:06,707 And that market proved to be exceptionally good, 52 00:03:06,790 --> 00:03:09,585 really better than almost all polls. 53 00:03:09,668 --> 00:03:13,839 And by doing so, they create this really powerful 54 00:03:13,923 --> 00:03:16,717 kind of collective forecasting machine 55 00:03:16,800 --> 00:03:19,720 that taps into what I call the wisdom of crowds. 56 00:03:22,097 --> 00:03:24,350 The basic idea of the wisdom of crowds 57 00:03:24,433 --> 00:03:27,019 is that under the right conditions, 58 00:03:27,102 --> 00:03:30,356 groups of people can be remarkably intelligent. 59 00:03:30,439 --> 00:03:34,318 So, if you can figure out ways to tap into that wisdom of crowds, 60 00:03:34,401 --> 00:03:37,071 then you can actually create tools 61 00:03:37,154 --> 00:03:41,200 that will solve problems and even in some circumstances, 62 00:03:41,283 --> 00:03:43,661 and this would be where prediction markets come in, 63 00:03:44,370 --> 00:03:45,829 forecast the future. 64 00:03:46,455 --> 00:03:47,748 This is how it works. 65 00:03:48,874 --> 00:03:51,669 Every prediction market starts with a question. 66 00:03:53,003 --> 00:03:55,881 Let's say, "Will the US government acknowledge 67 00:03:55,965 --> 00:03:59,218 the existence of aliens by 2029?" 68 00:03:59,301 --> 00:04:02,429 And that is a real market in Kalshi right now. 69 00:04:02,513 --> 00:04:04,890 So, there are two options. Yes, or no. 70 00:04:05,474 --> 00:04:06,600 In a prediction market, 71 00:04:06,684 --> 00:04:09,812 there are always two people trading against each other. 72 00:04:09,895 --> 00:04:11,522 So, for you to make this trade, 73 00:04:11,605 --> 00:04:15,901 you would buy shares of yes at 25% odds. 74 00:04:15,985 --> 00:04:20,906 Another person would have to take the other side of that trade at 75%. 75 00:04:21,532 --> 00:04:24,743 The price in the market is always changing 76 00:04:24,827 --> 00:04:28,455 {\an8}and that reflects the changing opinions of the people in the crowd. 77 00:04:28,539 --> 00:04:31,667 {\an8}And you can cash out your bet at any point. 78 00:04:31,750 --> 00:04:33,585 When the outcome is known, 79 00:04:33,669 --> 00:04:38,716 the winner gets 100% of the payout and the loser gets nothing. 80 00:04:38,799 --> 00:04:40,259 Kalshi and Polymarket, 81 00:04:40,342 --> 00:04:42,803 they make money by taking a transaction fee. 82 00:04:42,886 --> 00:04:45,848 The more people that bet, the more money they make. 83 00:04:49,727 --> 00:04:52,354 {\an8}We've got all of this enthusiasm over World Cup 84 00:04:52,438 --> 00:04:53,897 {\an8}and a betting bonanza. 85 00:04:53,981 --> 00:04:56,692 {\an8}And Kalshi did more than five billion bucks 86 00:04:56,775 --> 00:04:58,068 {\an8}in trading volume this week. 87 00:04:58,152 --> 00:05:02,072 {\an8}Joining us, Tarek Mansour is a CEO and co-founder at Kalshi. 88 00:05:02,156 --> 00:05:03,324 {\an8}When he left MIT, 89 00:05:03,407 --> 00:05:07,286 {\an8}he joined really the giants of Wall Street. 90 00:05:08,871 --> 00:05:12,124 {\an8}Prediction markets are covering things that are top of people's minds. 91 00:05:12,207 --> 00:05:15,544 Things that are very kind of core and front and center right now. 92 00:05:16,670 --> 00:05:19,173 And so, sports have been an amazing propeller. 93 00:05:19,840 --> 00:05:21,258 I mean, it's massive. 94 00:05:21,342 --> 00:05:23,802 I mean, 30 to 40 billion dollars in volume. 95 00:05:23,886 --> 00:05:25,387 The growth has been incredible. 96 00:05:25,471 --> 00:05:26,722 A lot of people watch sports, 97 00:05:26,805 --> 00:05:29,058 so it's an easy way to kind of understand what this is 98 00:05:29,141 --> 00:05:30,726 and get educated about prediction markets. 99 00:05:30,809 --> 00:05:33,979 A big chunk of the users essentially convert to other things 100 00:05:34,063 --> 00:05:37,399 like the economy, politics, weather, culture. 101 00:05:37,483 --> 00:05:39,109 If you're not making money watching Love Island, 102 00:05:39,193 --> 00:05:40,277 you're doing it wrong. 103 00:05:40,361 --> 00:05:43,906 You know, it's interesting. When we started the company, it was 2018. 104 00:05:43,989 --> 00:05:45,407 This was a time where, you know, 105 00:05:45,491 --> 00:05:49,912 you saw the sort of first wave of misinformation, polarization, 106 00:05:49,995 --> 00:05:52,206 {\an8}the country being driven to the extremes. 107 00:05:52,289 --> 00:05:55,042 {\an8}You will not resist us! 108 00:05:55,751 --> 00:05:58,796 {\an8}Social media was supposed to be a solution to that, 109 00:05:58,879 --> 00:06:00,756 {\an8}but it ended up adding fuel to fire. 110 00:06:00,839 --> 00:06:01,965 I am over it. 111 00:06:02,049 --> 00:06:03,842 The beauty of prediction markets 112 00:06:04,385 --> 00:06:06,345 is the incentive structure is the opposite. 113 00:06:06,428 --> 00:06:09,765 The incentive structure in the system is truth. 114 00:06:09,848 --> 00:06:13,185 It's a truth that's coming from people with skin in the game. 115 00:06:13,894 --> 00:06:15,604 And, you know-- And you think about it, right? 116 00:06:15,687 --> 00:06:18,023 Like, you sit sometimes at a dinner table at Thanksgiving, 117 00:06:18,107 --> 00:06:19,608 and everyone has all these crazy takes. 118 00:06:19,691 --> 00:06:22,444 And you're like, "Hey, let's put ten dollars on it." 119 00:06:22,528 --> 00:06:24,988 And all of a sudden, they get a lot more careful, right? 120 00:06:25,072 --> 00:06:27,741 The person that was so certain about their belief and their opinion, 121 00:06:27,825 --> 00:06:29,576 all of a sudden they're not so sure anymore. 122 00:06:29,660 --> 00:06:31,703 It's objective. It's mathematical. 123 00:06:31,787 --> 00:06:34,957 It's statistical in a way that all the other mechanisms are not. 124 00:06:35,040 --> 00:06:36,041 And I love math. 125 00:06:39,044 --> 00:06:42,923 I grew up in Lebanon with a single mom and I lived, you know-- 126 00:06:43,006 --> 00:06:45,050 The way I describe Lebanon is a very volatile country. 127 00:06:46,093 --> 00:06:49,471 In this sort of complex, constantly evolving dynamic environment, 128 00:06:49,555 --> 00:06:51,432 I found math to be a refuge. 129 00:06:52,224 --> 00:06:54,435 And prediction markets are a bit of an application of that. 130 00:06:54,518 --> 00:06:56,103 You want the people that are doing the research. 131 00:06:56,186 --> 00:07:00,023 You want the people that are like very "sharp," or well-informed, or smart. 132 00:07:00,107 --> 00:07:01,191 And imagine if society, 133 00:07:01,275 --> 00:07:04,736 we basically tackled a lot of our big questions by thinking more. 134 00:07:11,201 --> 00:07:14,371 {\an8}We can think about Spain and climbing Mount Everest. 135 00:07:15,664 --> 00:07:19,585 But you have to deal with that lot first and see where you can go. 136 00:07:19,668 --> 00:07:21,336 Look at the scene here. 137 00:07:21,420 --> 00:07:23,297 - Another Capri Sun? - Yeah. 138 00:07:23,380 --> 00:07:25,966 I just get nervous and I like drinking Capri Sun. 139 00:07:29,928 --> 00:07:33,015 {\an8}We're a bunch of people who bet and trade on sports for a living 140 00:07:33,098 --> 00:07:35,434 and always trying to make as much money as possible. 141 00:07:37,227 --> 00:07:38,937 In terms of placing this bet, yeah, you know, 142 00:07:39,021 --> 00:07:44,610 {\an8}you just get probably way too comfortable with moving around large amounts of money. 143 00:07:44,693 --> 00:07:50,491 Since prediction markets started offering sports trading, I've made mid six figures. 144 00:07:50,574 --> 00:07:53,535 {\an8}I remember not that long ago when… 145 00:07:53,619 --> 00:07:56,455 {\an8}if Datian lost 100 bucks, it would be pretty devastating. 146 00:07:56,538 --> 00:08:00,626 {\an8}And now I think it would probably take 30 times to maybe even register. 147 00:08:01,418 --> 00:08:03,462 {\an8}And that's worth it to you guys? 148 00:08:03,545 --> 00:08:06,757 Making a million dollars in like two weeks? 149 00:08:07,841 --> 00:08:09,092 That seems pretty great to me. 150 00:08:10,385 --> 00:08:13,013 …and he celebrates like LeBron James. 151 00:08:13,096 --> 00:08:16,934 - Wait. Belgium just scored. - Yeah, we fucked-- We missed it. 152 00:08:17,017 --> 00:08:19,394 The prediction markets are faster than the streams, 153 00:08:19,478 --> 00:08:22,189 so Belgium scored before we actually got to see the goal. 154 00:08:22,898 --> 00:08:24,942 You've made so much. This is crazy. 155 00:08:25,025 --> 00:08:27,402 Datian just made like 50,000 dollars on that goal. 156 00:08:27,486 --> 00:08:29,780 Look at him. Doesn't even feel a thing. 157 00:08:31,532 --> 00:08:36,328 The way it works, you have market makers and then you have market takers. 158 00:08:36,411 --> 00:08:41,917 And in the vast majority of cases, the market makers are sharp or smart, 159 00:08:42,000 --> 00:08:45,712 and the market takers are not smart 160 00:08:45,796 --> 00:08:48,549 in the sense that they are making losing trades. 161 00:08:48,632 --> 00:08:50,676 I mean, Datian used to work at Jane Street. 162 00:08:50,759 --> 00:08:55,055 {\an8}The people at Jane Street are often described as mathematical. 163 00:08:55,138 --> 00:09:00,185 {\an8}They're problem solvers in the most advanced way. 164 00:09:00,894 --> 00:09:04,648 I mean, yeah, we're all only able to make money 165 00:09:04,731 --> 00:09:07,943 because people smarter than us haven't entered these markets yet. 166 00:09:08,819 --> 00:09:10,571 Describe your perfect counterparty. 167 00:09:10,654 --> 00:09:14,241 I think it's just, like, someone who randomly, like, place orders 168 00:09:14,324 --> 00:09:15,659 and has, like, zero information. 169 00:09:15,742 --> 00:09:17,995 {\an8}Yeah, someone who just logs in and just wants 170 00:09:18,495 --> 00:09:19,997 {\an8}to bet on anything that they see. 171 00:09:20,080 --> 00:09:23,458 They're not making a sophisticated choice as to what they're trading. 172 00:09:23,542 --> 00:09:27,296 They're just buying or selling whatever it is that's in front of them. 173 00:09:27,379 --> 00:09:28,505 It's a fancy way of saying 174 00:09:28,589 --> 00:09:31,049 that he wants to be against the 19-year-old 175 00:09:31,133 --> 00:09:33,385 who's randomly firing off. 176 00:09:38,724 --> 00:09:40,142 I'm 19 years old. 177 00:09:42,311 --> 00:09:44,313 {\an8}I work as a chef and… 178 00:09:45,480 --> 00:09:49,109 {\an8}I like to bet on Kalshi. 179 00:09:49,192 --> 00:09:50,902 …used to scoring really well. 180 00:09:51,778 --> 00:09:55,240 I think I've always been a little more impulsive 181 00:09:55,324 --> 00:09:58,827 and maybe adventurous than, you know, my peers. 182 00:09:59,703 --> 00:10:01,997 A lot of my friends I grew up with, like, 183 00:10:02,789 --> 00:10:04,875 you know, didn't want to do crazy things as much. 184 00:10:05,834 --> 00:10:07,544 {\an8}Crazy things like what? 185 00:10:08,587 --> 00:10:10,464 Gamble away all their rent. 186 00:10:13,133 --> 00:10:15,302 {\an8}- We've been undefeated. - So Kalshi is the sauce? 187 00:10:15,385 --> 00:10:17,262 {\an8}Thank you Kalshi. 188 00:10:17,346 --> 00:10:19,222 {\an8}When the Knicks made the finals, 189 00:10:19,306 --> 00:10:24,269 {\an8}that's when I would say started the peak of how much I was putting into the Kalshi. 190 00:10:25,395 --> 00:10:29,358 I started with 1,000 dollars, you know, went up and down, 191 00:10:29,441 --> 00:10:32,819 and then I borrowed another 1,100 from my roommate. 192 00:10:34,071 --> 00:10:36,073 Yeah, and I lost it all, pretty much. 193 00:10:37,658 --> 00:10:38,784 Kalshi. 194 00:10:38,867 --> 00:10:41,745 I don't understand, but this is going very well. 195 00:10:43,622 --> 00:10:45,832 Gambling can be incredibly dangerous 196 00:10:45,916 --> 00:10:47,959 and problematic for a lot of people. 197 00:10:48,043 --> 00:10:50,545 It's especially true for young people. 198 00:10:50,629 --> 00:10:54,007 I mean, we just saw Timothée Chalamet on TV saying, 199 00:10:54,091 --> 00:10:55,634 {\an8}"Sign up for Kalshi, it's great." 200 00:10:55,717 --> 00:10:58,762 {\an8}And one of the things that is most dangerous, in my opinion is… 201 00:10:59,763 --> 00:11:03,392 an influencer saying how they paid their rent 202 00:11:03,475 --> 00:11:06,853 by guessing the weather or some person on YouTube 203 00:11:06,937 --> 00:11:09,481 talking about how easy it is to get rich quick. 204 00:11:11,233 --> 00:11:13,443 The more people you expose to that vice, 205 00:11:13,527 --> 00:11:15,821 the more people who are going to have serious problems. 206 00:11:15,904 --> 00:11:19,157 …will be Spain against Belgium in Los Angeles this Friday. 207 00:11:19,783 --> 00:11:22,536 Tonight, I'm lucky. 208 00:11:24,079 --> 00:11:28,458 We can see it, the final screen, which isn't much, you know. 209 00:11:28,542 --> 00:11:33,463 Now my portfolio is 300 dollars and it's pending payout. 210 00:11:36,049 --> 00:11:40,137 It has been the cause of significant stress 211 00:11:41,096 --> 00:11:45,851 like I haven't paid my rent for a month because of this specifically. 212 00:11:46,476 --> 00:11:49,688 You know, I can say, "No, it doesn't have that much of a grip on me," 213 00:11:49,771 --> 00:11:51,148 but clearly it does a little bit. 214 00:11:53,984 --> 00:11:58,321 As of right now, I have 57 dollars in my checking account. 215 00:11:58,405 --> 00:12:02,784 {\an8}Did you ever consider putting limits on your Kalshi account? 216 00:12:02,868 --> 00:12:06,079 Yeah, there's a limit on my Kalshi account. 217 00:12:06,163 --> 00:12:10,876 It's whatever I have in my checking account is the limit. 218 00:12:20,093 --> 00:12:25,557 All right. I'm going to hit the button in three, two, one. 219 00:12:27,350 --> 00:12:28,602 {\an8}My name is Dustin Gouker. 220 00:12:28,685 --> 00:12:31,104 {\an8}I'm the host of this podcast, The Event Horizon. 221 00:12:32,731 --> 00:12:35,442 {\an8}We're here to talk this week about prediction markets. 222 00:12:35,942 --> 00:12:37,068 Over the course of the World Cup, 223 00:12:37,152 --> 00:12:39,780 Kalshi has had the biggest days it's had in its history. 224 00:12:39,863 --> 00:12:43,116 I don't think even I had a sense of how big this would be for Kalshi. 225 00:12:44,868 --> 00:12:48,163 {\an8}Prediction markets are the fastest growing industry this side of AI. 226 00:12:48,246 --> 00:12:49,498 {\an8}I have no doubt about it. 227 00:12:50,040 --> 00:12:52,250 These companies have gotten big really fast. 228 00:12:52,751 --> 00:12:54,127 Everything is disrupted by this. 229 00:12:54,211 --> 00:12:57,088 It's like, it's changed how we view the world. 230 00:12:58,590 --> 00:13:01,968 Polymarket kind of dominated for the early 2020s. 231 00:13:02,052 --> 00:13:03,804 They're crypto native 232 00:13:03,887 --> 00:13:06,932 {\an8}and mostly unregulated offshore until recently. 233 00:13:07,974 --> 00:13:09,935 {\an8}Kalshi was doing this totally differently. 234 00:13:10,018 --> 00:13:12,938 We spent four years getting regulated before we launched a single product. 235 00:13:13,021 --> 00:13:14,898 {\an8}We have more than a thousand markets 236 00:13:14,981 --> 00:13:17,192 {\an8}across politics, entertainment, culture. 237 00:13:19,361 --> 00:13:22,322 {\an8}But the billions of dollars we're hearing are not 238 00:13:22,405 --> 00:13:24,574 on real-world events that really matter. 239 00:13:26,493 --> 00:13:28,829 Sports are about 85 to 90% 240 00:13:28,912 --> 00:13:31,540 of trading volume at Kalshi right now as we sit here. 241 00:13:33,041 --> 00:13:34,918 It may not be legally gambling, 242 00:13:35,001 --> 00:13:37,879 but what is happening is a 100% just gambling. 243 00:13:38,463 --> 00:13:42,509 {\an8}Kentucky's Attorney General is suing the prediction market platforms. 244 00:13:42,592 --> 00:13:45,762 {\an8}…accusing them of facilitating illegal sports betting. 245 00:13:45,846 --> 00:13:48,890 {\an8}That's what all these court cases are about. 246 00:13:48,974 --> 00:13:52,310 Because gambling has always been the purview of the state. 247 00:13:54,396 --> 00:13:57,232 A year and a half ago now, Kalshi said, we're going to offer this, 248 00:13:57,315 --> 00:13:59,109 but we're going to do it under federal law, 249 00:13:59,192 --> 00:14:03,613 no different than other exchanges where you can buy a stock 250 00:14:03,697 --> 00:14:04,739 or sell a stock. 251 00:14:04,823 --> 00:14:06,241 We don't have to worry about state laws. 252 00:14:06,324 --> 00:14:08,743 We are legally under the federal government 253 00:14:08,827 --> 00:14:09,828 and that's it. 254 00:14:09,911 --> 00:14:12,205 {\an8}Whether something feels and looks like gambling 255 00:14:12,289 --> 00:14:13,748 {\an8}doesn't necessarily make it gambling. 256 00:14:13,832 --> 00:14:16,334 {\an8}Speculation exists in all financial markets. 257 00:14:16,418 --> 00:14:19,296 There's this patchwork state-based solution 258 00:14:19,379 --> 00:14:20,964 where every single state is like some sort 259 00:14:21,047 --> 00:14:22,716 of weird backdoor lobbying. 260 00:14:24,384 --> 00:14:27,596 The CFTC started off just being very hands-off. 261 00:14:27,679 --> 00:14:30,265 Then we got a new chairman of the CFTC, Michael Selig, 262 00:14:30,348 --> 00:14:34,728 and they became not just hands-off, 263 00:14:34,811 --> 00:14:36,730 but an active proponent of the industry. 264 00:14:36,813 --> 00:14:38,440 {\an8}Why is he doing that? 265 00:14:40,108 --> 00:14:43,111 I have to say this in a way that won't get me in trouble. Let's see. 266 00:14:47,699 --> 00:14:49,993 Some people will argue that it has to do with corruption. 267 00:14:50,076 --> 00:14:52,245 Some people will say it's just deregulation. 268 00:14:52,329 --> 00:14:53,788 I'm not here to pontificate on that. 269 00:14:54,539 --> 00:14:57,834 It's hard to, like, separate the fact that Donald Trump Jr. 270 00:14:57,918 --> 00:15:00,503 is an advisor to both Kalshi and Polymarket. 271 00:15:00,587 --> 00:15:04,049 {\an8}Certainly, the president, his family has a vested interest 272 00:15:04,132 --> 00:15:05,467 {\an8}in the success of prediction markets. 273 00:15:05,550 --> 00:15:08,303 And we have a CFTC that is being very friendly now 274 00:15:08,386 --> 00:15:10,013 towards prediction markets. 275 00:15:22,525 --> 00:15:25,820 There's agreements and walls that are put in place 276 00:15:25,904 --> 00:15:28,239 such that we're not dealing with any members 277 00:15:28,323 --> 00:15:30,617 of the president's family when it comes to policy. 278 00:15:31,242 --> 00:15:33,119 We don't engage with the president's family 279 00:15:33,203 --> 00:15:34,913 {\an8}on any of these types of issues. 280 00:15:36,081 --> 00:15:40,919 {\an8}So in my belief and understanding there is no sort of conflicts of interest. 281 00:15:42,379 --> 00:15:45,048 The prior administration didn't like the prediction markets. 282 00:15:45,590 --> 00:15:46,800 I mean, that was very clear. 283 00:15:46,883 --> 00:15:49,386 They sought to ban the product 284 00:15:49,469 --> 00:15:52,472 with respect to political prediction markets. 285 00:15:53,640 --> 00:15:58,561 {\an8}The courts threw it out and then we saw the gates open. 286 00:15:58,645 --> 00:16:00,772 Prediction markets are absolutely exploding. 287 00:16:00,855 --> 00:16:03,650 Events in pop culture and tech and sports and climate 288 00:16:03,733 --> 00:16:06,861 and the world and literally anything you can think of. 289 00:16:06,945 --> 00:16:10,156 I've been in the seat for about six months now 290 00:16:10,240 --> 00:16:13,076 and there's no clear rules of the road yet, 291 00:16:13,159 --> 00:16:15,745 but we're trying to put those in place as soon as we can. 292 00:16:15,829 --> 00:16:16,997 {\an8}What's your message then 293 00:16:17,080 --> 00:16:20,208 {\an8}to states who are trying to limit prediction markets? 294 00:16:20,291 --> 00:16:21,459 {\an8}The law is clear. 295 00:16:22,293 --> 00:16:25,714 The law provides that the CFTC has exclusive federal 296 00:16:25,797 --> 00:16:27,632 regulatory authority over these markets 297 00:16:27,716 --> 00:16:28,883 because they are national markets. 298 00:16:29,509 --> 00:16:33,972 To any state that seeks to circumvent federal regulation 299 00:16:34,055 --> 00:16:36,683 and replace federal law with state law, 300 00:16:37,267 --> 00:16:38,476 we will see you in court. 301 00:16:45,400 --> 00:16:47,485 {\an8}An exclusive interview is Polymarket founder 302 00:16:47,569 --> 00:16:49,279 {\an8}and CEO Shayne Coplan. 303 00:16:49,362 --> 00:16:51,990 {\an8}…bounced around this sort of startup tech crypto scene for a while. 304 00:16:52,073 --> 00:16:54,868 {\an8}This NYU dropout crypto bad boy. 305 00:16:54,951 --> 00:16:56,202 {\an8}He's now a billionaire. 306 00:16:57,245 --> 00:16:59,289 I think that when people think about prediction markets right now, 307 00:16:59,372 --> 00:17:00,790 all they think about is sports. 308 00:17:00,874 --> 00:17:02,459 {\an8}I love sports, but… 309 00:17:03,376 --> 00:17:05,503 {\an8}I didn't start Polymarket for it to be a sports site. 310 00:17:06,337 --> 00:17:07,464 I found myself in a lucky position. 311 00:17:07,547 --> 00:17:08,840 It was during the pandemic. 312 00:17:08,923 --> 00:17:10,050 I was broke. 313 00:17:10,133 --> 00:17:11,718 I was living in the Lower East Side. 314 00:17:13,344 --> 00:17:15,680 And I was like, when are things gonna open back up? 315 00:17:15,764 --> 00:17:18,266 When people talk about the vaccine, when's it gonna be ready? 316 00:17:18,349 --> 00:17:20,143 When's shelter in place gonna be over? 317 00:17:20,226 --> 00:17:21,936 Are things gonna go back to normal? 318 00:17:22,020 --> 00:17:24,230 And I was like, this idea 319 00:17:24,314 --> 00:17:26,316 of information markets is the perfect… 320 00:17:26,399 --> 00:17:28,151 this is the perfect use case in the perfect moment. 321 00:17:28,234 --> 00:17:33,823 And I think because of a mix of my nerdy passion of markets 322 00:17:33,907 --> 00:17:35,825 and this sort of like academic literature 323 00:17:35,909 --> 00:17:38,745 about what today we think of as prediction markets, 324 00:17:38,828 --> 00:17:42,624 plus maybe just enough creativity 325 00:17:42,707 --> 00:17:46,002 and being so broke that I had nothing to lose. 326 00:17:46,086 --> 00:17:47,962 The triad of that, I was like, 327 00:17:48,046 --> 00:17:49,422 "Screw it, I'm going to go build this thing." 328 00:17:52,634 --> 00:17:55,678 You know, when Polymarket really glowed up and became a thing, 329 00:17:55,762 --> 00:17:57,347 it was all about politics. 330 00:17:57,430 --> 00:18:00,350 I think the real watershed moment, the inflection point, 331 00:18:00,433 --> 00:18:03,645 was during the first debate between Biden and Trump. 332 00:18:06,147 --> 00:18:07,398 {\an8}With the COVID… 333 00:18:09,400 --> 00:18:11,361 {\an8}When Biden started stumbling with his words, 334 00:18:12,737 --> 00:18:16,574 the Polymarket for him dropping out was skyrocketing 335 00:18:16,658 --> 00:18:18,993 and the Polymarket for him winning was tanking. 336 00:18:19,661 --> 00:18:22,163 And someone said to me, it was like a really funny quote. 337 00:18:22,247 --> 00:18:25,750 They were like, "Shayne, there's really two things that can happen here." 338 00:18:27,252 --> 00:18:30,046 "Either he'll drop out and you build one of the most important sites in the world 339 00:18:30,130 --> 00:18:33,925 or nothing's gonna happen and you've lost all credibility, 340 00:18:34,008 --> 00:18:36,010 no one's ever gonna take Polymarket seriously again." 341 00:18:36,094 --> 00:18:39,973 I was like, "Okay." Like, you know… Like, let's see what happens. 342 00:18:40,056 --> 00:18:43,101 {\an8}We are coming on the air at this hour with breaking news 343 00:18:43,184 --> 00:18:46,938 {\an8}President Biden has just announced that he is ending his re-election bid. 344 00:18:47,564 --> 00:18:49,941 {\an8}When he dropped out, that was a moment. 345 00:18:50,024 --> 00:18:52,235 {\an8}Just a stunning announcement from… 346 00:18:52,318 --> 00:18:57,740 {\an8}And then Election Day was this crazy moment where 347 00:18:57,824 --> 00:19:00,869 the way that the market moved that night and called Trump winning 348 00:19:00,952 --> 00:19:06,040 when the TV stations were still talking about, "Oh, it's neck and neck." 349 00:19:06,124 --> 00:19:09,043 {\an8}At the very end, we find a tie nationally, 350 00:19:09,127 --> 00:19:11,754 {\an8}49% for Harris, 49% for Trump. 351 00:19:11,838 --> 00:19:14,382 {\an8}Harris having the slight edge over Trump 352 00:19:14,465 --> 00:19:16,593 {\an8}in the latest national poll, very slight. 353 00:19:16,676 --> 00:19:18,845 {\an8}Polymarket was spot on the entire time. 354 00:19:19,512 --> 00:19:21,890 That was one of the most gratifying moments ever, 355 00:19:21,973 --> 00:19:24,392 just because the idea worked. 356 00:19:24,475 --> 00:19:25,768 The idea worked. 357 00:19:25,852 --> 00:19:29,814 And from that moment on, there was the level of credibility 358 00:19:29,898 --> 00:19:31,858 that Polymarket had and the way people thought about it 359 00:19:31,941 --> 00:19:33,610 had just changed entirely. 360 00:19:39,115 --> 00:19:42,160 So prediction markets have gotten very popular, 361 00:19:42,243 --> 00:19:45,496 {\an8}but there hasn't been a steady evolution. 362 00:19:47,332 --> 00:19:49,709 Another exotic idea from the Pentagon's 363 00:19:49,792 --> 00:19:53,004 Defense Advanced Research Projects Agency, 364 00:19:53,087 --> 00:19:54,339 DARPA. 365 00:19:54,923 --> 00:19:58,301 {\an8}A futures market, if you will, in terror. 366 00:19:58,384 --> 00:20:01,262 In 2003, the intelligence community 367 00:20:01,346 --> 00:20:04,057 was planning on launching public markets 368 00:20:04,140 --> 00:20:08,686 in geopolitical events called "the policy analysis market." 369 00:20:08,770 --> 00:20:10,980 It was going to be open to anyone. 370 00:20:11,064 --> 00:20:14,817 {\an8}The hope was that the collective judgment of that market 371 00:20:14,901 --> 00:20:19,364 would yield some useful information for the U.S. intelligence community. 372 00:20:19,447 --> 00:20:21,866 What they mostly wanted to forecast were things 373 00:20:21,950 --> 00:20:26,496 like the political stability of regimes or what was going to happen 374 00:20:26,579 --> 00:20:29,791 to oil in upcoming years. 375 00:20:30,667 --> 00:20:35,171 But when they went to work and kind of advertised the market, 376 00:20:35,255 --> 00:20:37,423 they also talked about things like, 377 00:20:37,507 --> 00:20:40,677 whether or not there would be a missile attack from North Korea 378 00:20:40,760 --> 00:20:43,680 or betting on assassinations. 379 00:20:44,180 --> 00:20:46,933 There was this just massive backlash against it. 380 00:20:47,016 --> 00:20:51,062 {\an8}The federal government is encouraging people to bet on 381 00:20:51,145 --> 00:20:55,817 {\an8}and make money from atrocities and terrorist attacks. 382 00:20:55,900 --> 00:20:58,820 You're gonna make money if terrible things happen. 383 00:20:58,903 --> 00:21:01,906 Why are we potentially creating an incentive for people to, 384 00:21:01,990 --> 00:21:03,616 like, go out and try an assassination? 385 00:21:03,700 --> 00:21:06,160 {\an8}It is a tragic waste of taxpayers' money. 386 00:21:06,244 --> 00:21:09,289 {\an8}It will be offensive to almost everyone. Can you imagine… 387 00:21:09,372 --> 00:21:12,875 {\an8}And the amazing thing is, as soon as there was any pressure, they folded. 388 00:21:12,959 --> 00:21:15,503 I mean, the whole thing was over within, like, two days. 389 00:21:15,586 --> 00:21:18,631 I think the main thing that has changed, honestly, 390 00:21:18,715 --> 00:21:21,926 is that we are just much more comfortable with gambling 391 00:21:22,010 --> 00:21:23,803 than we were 20 years ago. 392 00:21:24,804 --> 00:21:28,224 So when you give people the chance to bet on pretty much anything, 393 00:21:28,308 --> 00:21:30,393 it gets complicated really fast. 394 00:21:30,476 --> 00:21:34,564 And it seems like there are three big issues, 395 00:21:34,647 --> 00:21:37,191 let's call them the "Dark Side of Prediction Markets." 396 00:21:37,275 --> 00:21:39,694 The first one is insider trading. 397 00:21:39,777 --> 00:21:43,823 {\an8}A U.S. Special Forces soldier who helped to plan the January capture 398 00:21:43,906 --> 00:21:47,285 {\an8}of Venezuelan President Nicolás Maduro has been indicted. 399 00:21:47,368 --> 00:21:48,953 {\an8}Now pleading not guilty. 400 00:21:49,037 --> 00:21:51,956 {\an8}Authorities say he won more than 400,000 dollars 401 00:21:52,040 --> 00:21:54,584 {\an8}using classified information to win on Polymarket. 402 00:21:54,667 --> 00:21:57,211 {\an8}Polymarket says it referred the suspicious bets 403 00:21:57,295 --> 00:21:58,379 {\an8}to the Department of Justice. 404 00:21:58,463 --> 00:22:01,090 The second problem is the problem of people 405 00:22:01,174 --> 00:22:04,260 gaming the things that are used to measure the outcomes. 406 00:22:04,761 --> 00:22:06,971 {\an8}This involves tampered weather data. 407 00:22:07,055 --> 00:22:10,683 {\an8}France's national forecaster has filed a police complaint 408 00:22:10,767 --> 00:22:13,311 after detecting suspicious temperature spikes 409 00:22:13,394 --> 00:22:14,729 at Paris' Charles de Gaulle airport. 410 00:22:14,812 --> 00:22:18,941 {\an8}Somehow the equipment was tampered with, maybe a lighter, maybe a hairdryer, 411 00:22:19,025 --> 00:22:22,028 {\an8}to give this five-degree Celsius spike in the reading. 412 00:22:22,111 --> 00:22:24,405 Third, and I think by far the most consequential, 413 00:22:24,489 --> 00:22:28,326 is when the existence of a prediction market, 414 00:22:28,868 --> 00:22:31,954 actually changes what people do. 415 00:22:32,705 --> 00:22:33,956 There was a Kalshi market 416 00:22:34,040 --> 00:22:36,918 on whether or not George Santos would show up 417 00:22:37,001 --> 00:22:38,878 at the State of the Union address. 418 00:22:38,961 --> 00:22:41,214 I'm going to be there for the State of the Union 419 00:22:41,297 --> 00:22:42,882 in the gallery, guys. 420 00:22:42,965 --> 00:22:48,513 Santos had reportedly made a bet on Kalshi on the "no" side of the contract. 421 00:22:48,596 --> 00:22:50,264 That is, he would not show up. 422 00:22:50,348 --> 00:22:53,184 During the address, he posted, "Watching State of the Union 423 00:22:53,267 --> 00:22:55,895 from an airport TV was not part of the plan." 424 00:22:55,978 --> 00:22:58,314 By skipping the speech, sources say he pocketed 425 00:22:58,398 --> 00:23:00,108 tens of thousands of dollars. 426 00:23:00,650 --> 00:23:02,819 I do think going forward, they're just gonna have to figure out 427 00:23:02,902 --> 00:23:03,903 how to manage this. 428 00:23:12,203 --> 00:23:16,374 All right, so where are we on requesting materials 429 00:23:16,457 --> 00:23:19,085 from the traders in Georgia? 430 00:23:20,169 --> 00:23:22,130 He keeps spamming our inbox. 431 00:23:22,839 --> 00:23:24,257 {\an8}Because the account is frozen? 432 00:23:25,383 --> 00:23:26,384 {\an8}Yeah, yeah. 433 00:23:26,467 --> 00:23:28,636 {\an8}I suspect that that person's just nervous also 434 00:23:28,719 --> 00:23:31,097 {\an8}that there's an inquiry into their activity. 435 00:23:33,558 --> 00:23:37,061 {\an8}Any regulated financial institution is going to face 436 00:23:37,145 --> 00:23:40,022 {\an8}people who come to commit financial crime, 437 00:23:40,106 --> 00:23:42,400 {\an8}whether it's money laundering, whether it's insider trading, 438 00:23:42,483 --> 00:23:44,277 {\an8}market manipulation, etc. 439 00:23:45,319 --> 00:23:48,448 So I lead our investigations and the enforcement actions 440 00:23:48,531 --> 00:23:50,199 that we undertake. 441 00:23:50,283 --> 00:23:53,578 Our team's grown quite a bit in the last year. 442 00:23:53,661 --> 00:23:56,581 We have about 15 to 20 employees, 443 00:23:56,664 --> 00:23:59,000 individuals who are just focused on surveillance. 444 00:23:59,083 --> 00:24:01,252 We have individuals who are surveilling for fraud, 445 00:24:01,794 --> 00:24:03,421 and then also a legal team. 446 00:24:03,504 --> 00:24:06,048 We've hired surveillance analysts from the FBI. 447 00:24:06,674 --> 00:24:08,801 We have people with backgrounds at the CFTC 448 00:24:08,885 --> 00:24:10,470 and the Department of Justice. 449 00:24:10,553 --> 00:24:15,057 There's been a significant increase in our investigative and referral efforts 450 00:24:15,141 --> 00:24:19,145 over the last six months in particular, just as the exchange has grown. 451 00:24:19,228 --> 00:24:23,107 Our surveillance algorithms are running over every single trade 452 00:24:23,191 --> 00:24:24,192 happening on the exchange. 453 00:24:24,275 --> 00:24:26,986 When they demonstrate some anomalous behavior, 454 00:24:27,069 --> 00:24:31,908 whether that's a very well-timed trade, a pattern of very well-timed trades, 455 00:24:31,991 --> 00:24:35,995 a very significant price jump that occurs right after an unusual trade, 456 00:24:36,078 --> 00:24:39,332 all those things might trigger a trade that comes across my desk 457 00:24:39,415 --> 00:24:41,042 or the surveillance team's desk. 458 00:24:41,709 --> 00:24:42,585 So, then… 459 00:24:42,668 --> 00:24:47,381 There's probably a 100, 150 each quarter that are meaningful investigations 460 00:24:47,465 --> 00:24:50,968 that may lead to some finding of wrongdoing or disciplinary action. 461 00:24:51,052 --> 00:24:54,555 And we've made dozens of referrals to law enforcement. 462 00:24:55,556 --> 00:24:58,518 Any new product or evolution in technology 463 00:24:58,601 --> 00:25:02,813 leads to really smart bad actors figuring out how to game that system. 464 00:25:03,314 --> 00:25:07,568 And the key is to try to stay one or five steps 465 00:25:07,652 --> 00:25:09,487 in front of them at all times. 466 00:25:09,570 --> 00:25:11,697 You won't always succeed at that. 467 00:25:17,870 --> 00:25:20,540 This is one of the big things that I spoiled myself with. 468 00:25:21,332 --> 00:25:24,210 This is paid for by prediction markets. 469 00:25:24,835 --> 00:25:26,254 With the press of a button, 470 00:25:26,337 --> 00:25:32,385 you can go from a sunlit room to what becomes total darkness. 471 00:25:35,012 --> 00:25:36,764 {\an8}Brought to me 100% by Kalshi. 472 00:25:36,847 --> 00:25:41,102 My wife would not let me spend this money if it wasn't just like bonus money. 473 00:25:41,185 --> 00:25:43,187 {\an8}Back in March of 2024, 474 00:25:43,271 --> 00:25:46,649 {\an8}Kalshi really started to hit the culture markets hard. 475 00:25:46,732 --> 00:25:49,151 In theory, their music and movie markets, 476 00:25:49,235 --> 00:25:51,153 the way that you win 'em is by using math. 477 00:25:51,237 --> 00:25:55,157 So, I turned, you know, a 10,000 dollar deposit 478 00:25:55,241 --> 00:25:59,537 into over 200,000 dollars in about six or seven months. 479 00:25:59,620 --> 00:26:02,623 The most common plays that I would do on Spotify 480 00:26:02,707 --> 00:26:05,501 is who will get number one during a given month. 481 00:26:06,711 --> 00:26:08,379 June 28th… 482 00:26:08,921 --> 00:26:10,840 Talk to me, talk to me 483 00:26:10,923 --> 00:26:13,342 …I noticed some weird pricing on Olivia Dean. 484 00:26:13,426 --> 00:26:16,971 Somebody thought that there was a more than 11% chance 485 00:26:17,054 --> 00:26:18,889 Olivia Dean was going to get first. 486 00:26:20,016 --> 00:26:22,727 And I thought the true odds of Olivia Dean getting first place 487 00:26:22,810 --> 00:26:24,645 naturally was zero. 488 00:26:24,729 --> 00:26:26,272 This was an old song. 489 00:26:26,355 --> 00:26:29,775 When I dug into the details, I was very concerned. 490 00:26:30,526 --> 00:26:33,946 The data that I was looking at is the top 200 songs. 491 00:26:34,488 --> 00:26:36,407 Most of 'em saw a drop. 492 00:26:36,490 --> 00:26:39,201 Two of them were newer songs, like newer small songs. 493 00:26:39,285 --> 00:26:41,329 It's not unusual for those to go up, 494 00:26:41,412 --> 00:26:46,125 but for a well-established song to go up almost 20% 495 00:26:46,208 --> 00:26:48,127 like this Drake song did, 496 00:26:48,210 --> 00:26:51,464 or 7% like this Olivia Dean song did, 497 00:26:52,048 --> 00:26:55,801 this is a very strong sign that fraud was happening. 498 00:26:56,469 --> 00:27:00,348 In theory, somebody is stream botting or stream boosting. 499 00:27:00,431 --> 00:27:05,394 It's just artificial, automated ways of "listening to music" 500 00:27:05,478 --> 00:27:07,063 where nobody's really listening to it. 501 00:27:07,146 --> 00:27:08,814 They're just trying to run up the numbers. 502 00:27:08,898 --> 00:27:13,653 So, at this point, I had 17,000 dollars that Drake wouldn't get first place, 503 00:27:13,736 --> 00:27:15,237 and I had 13,000 dollars 504 00:27:15,321 --> 00:27:17,782 that Olivia Dean wouldn't get first place. 505 00:27:17,865 --> 00:27:18,991 And I was quite worried. 506 00:27:19,784 --> 00:27:23,037 So, I started sending emails. I emailed Kalshi. 507 00:27:24,413 --> 00:27:28,209 I emailed Spotify saying I was completely convinced 508 00:27:28,292 --> 00:27:32,171 that the Drake and Olivia Dean streams were being botted, 509 00:27:32,254 --> 00:27:35,132 but they didn't seem to take it very seriously. 510 00:27:40,137 --> 00:27:45,518 Then the results come out, and I look at who's in first place, 511 00:27:45,601 --> 00:27:46,977 and it wasn't Olivia Dean. 512 00:27:47,812 --> 00:27:49,188 And it wasn't Drake. 513 00:27:51,482 --> 00:27:52,566 It was Malcolm Todd. 514 00:27:56,570 --> 00:27:59,031 Like, what? That makes no sense. 515 00:27:59,115 --> 00:28:02,827 Malcolm Todd wasn't even on the radar as a possibility. 516 00:28:03,452 --> 00:28:07,164 And if you look at this chart, you can see, boom, 517 00:28:07,248 --> 00:28:09,125 just this huge spike. 518 00:28:09,834 --> 00:28:13,546 So, his streams went up by 70% in a single day. 519 00:28:14,422 --> 00:28:17,174 And then they paid it out, and then I was pissed. 520 00:28:20,302 --> 00:28:22,263 Spotify removed the streams. 521 00:28:24,014 --> 00:28:26,600 And they admitted that they were fraudulent. 522 00:28:27,643 --> 00:28:31,021 But then in seeing how Kalshi handled it, 523 00:28:31,105 --> 00:28:35,359 how they just stopped replying, I liquidated my Kalshi account. 524 00:28:35,443 --> 00:28:39,196 So, I withdrew maybe 220,000 dollars? 525 00:28:39,280 --> 00:28:40,614 Dad! 526 00:28:41,365 --> 00:28:44,076 There are individuals who take a look at something and say, 527 00:28:44,160 --> 00:28:46,454 I can conclude this is bots and it's manipulation, 528 00:28:46,537 --> 00:28:48,289 and they may very well be right. 529 00:28:48,372 --> 00:28:49,999 {\an8}But from a legal perspective, 530 00:28:50,082 --> 00:28:52,418 {\an8}you need evidence to make that determination. 531 00:28:52,501 --> 00:28:56,297 {\an8}You can't just say it looks like a duck and it quacks like a duck so it is. 532 00:28:56,380 --> 00:28:58,299 We're gathering the evidence we would need 533 00:28:58,382 --> 00:28:59,508 to make that determination, 534 00:28:59,592 --> 00:29:02,136 but that's pretty much the most that I can comment on 535 00:29:02,219 --> 00:29:03,846 in terms of specifics about that. 536 00:29:04,513 --> 00:29:05,765 Okay, Patricio. 537 00:29:05,848 --> 00:29:07,975 It's kind of the Wild West right now. 538 00:29:08,058 --> 00:29:11,687 Regulation has not caught up to what these markets are doing at all. 539 00:29:13,105 --> 00:29:17,568 And as long as it's the platforms basically policing themselves, 540 00:29:17,651 --> 00:29:20,780 they're going to grow as much as they possibly can… 541 00:29:20,863 --> 00:29:21,989 Gonna go and get a goal! 542 00:29:22,072 --> 00:29:24,492 …offer as many markets as they possibly can, 543 00:29:24,575 --> 00:29:27,036 and consequences be damned. 544 00:29:34,919 --> 00:29:38,756 It is day 11 of the US-Israel war with Iran. 545 00:29:38,839 --> 00:29:40,800 The strikes lighting up the night sky 546 00:29:40,883 --> 00:29:43,552 and sending people rushing to shelter. 547 00:29:47,807 --> 00:29:49,642 {\an8}My name is Emanuel Fabian. 548 00:29:50,309 --> 00:29:52,269 I've been working for The Times of Israel 549 00:29:52,353 --> 00:29:54,230 for around six years now. 550 00:29:55,648 --> 00:29:58,734 {\an8}I basically cover everything related to the Israeli military. 551 00:29:59,652 --> 00:30:02,947 I'm at this point covering the Iranian attacks on Israel 552 00:30:03,030 --> 00:30:05,241 and Israel's attacks on Iran. 553 00:30:06,492 --> 00:30:10,204 On March 10th, there was, you know, one of several missiles that day, 554 00:30:11,163 --> 00:30:15,668 which struck outside the city of Beit Shemesh near Jerusalem. 555 00:30:17,211 --> 00:30:19,797 They reported there was no injuries, no damage. 556 00:30:20,673 --> 00:30:22,800 There wasn't anything particularly unusual 557 00:30:22,883 --> 00:30:25,886 in the grand scheme of things of this war. 558 00:30:27,429 --> 00:30:29,932 Much later that day, I get kind of an unusual email, 559 00:30:30,015 --> 00:30:32,852 essentially asking me to change my earlier reporting. 560 00:30:32,935 --> 00:30:36,730 And they were claiming that the missile that struck was fragments 561 00:30:36,814 --> 00:30:39,525 that were following an interception of a missile. 562 00:30:41,235 --> 00:30:42,653 And I respond to them and said, 563 00:30:42,736 --> 00:30:46,615 "Look, residents told me that they felt a massive explosion 564 00:30:46,699 --> 00:30:48,325 and a shockwave that shook all their windows." 565 00:30:48,826 --> 00:30:52,329 And the army also confirmed to me that it was a missile that struck the area. 566 00:30:55,374 --> 00:30:59,169 And then I started getting a barrage of messages. 567 00:31:02,131 --> 00:31:06,927 They wrote here, "If you do not correct this by 1:00 a.m. Israel time, 568 00:31:07,011 --> 00:31:10,639 you are brining upon yourself damage you have never imagined you would suffer." 569 00:31:10,723 --> 00:31:13,183 "You make us lose 900,000 dollars, 570 00:31:13,267 --> 00:31:15,853 we will invest no less than that to finish you." 571 00:31:17,646 --> 00:31:21,442 It was scary at that point. I'm married. I have a young daughter. 572 00:31:22,192 --> 00:31:25,404 I didn't know what this person was actually capable of. 573 00:31:26,280 --> 00:31:30,200 At that point, it was very clear to me that it was bets on Polymarket. 574 00:31:31,368 --> 00:31:32,870 Essentially, the bet was, 575 00:31:32,953 --> 00:31:36,123 "Did Iran strike Israel on a specific date?" 576 00:31:36,206 --> 00:31:37,666 You can see that the amount of money 577 00:31:37,750 --> 00:31:41,837 that was bet here reached 23 million dollars. 578 00:31:42,796 --> 00:31:46,050 Those who had voted "no" were the ones trying to convince me 579 00:31:46,133 --> 00:31:48,761 to change my report and to say that it was intercepted. 580 00:31:49,470 --> 00:31:51,305 But I was not going to change the story 581 00:31:51,388 --> 00:31:52,973 and it was going to stay exactly how it is. 582 00:31:54,475 --> 00:31:56,894 It wouldn't surprise me if there are many more cases. 583 00:31:57,686 --> 00:32:00,481 Journalists being threatened to change their reporting, 584 00:32:00,564 --> 00:32:02,483 I don't think I'll be the last. 585 00:32:27,633 --> 00:32:30,386 {\an8}Prediction markets are a cesspool. 586 00:32:30,469 --> 00:32:35,099 {\an8}Even if it is legal, right, is there something immoral 587 00:32:35,182 --> 00:32:37,559 {\an8}or ethically questionable here about betting 588 00:32:37,643 --> 00:32:41,772 {\an8}on geopolitical events when lives are potentially at stake? 589 00:32:41,855 --> 00:32:45,067 {\an8}We haven't done a good enough job in terms of, you know, 590 00:32:45,150 --> 00:32:47,236 {\an8}distilling why we do what we do. 591 00:32:47,319 --> 00:32:52,408 I know that we are probably in some, like, vibe debt, maybe, 592 00:32:52,908 --> 00:32:54,868 in terms of just how people kind of 593 00:32:54,952 --> 00:32:57,621 group Polymarket in with a lot of other stuff. 594 00:32:57,705 --> 00:33:00,791 {\an8}It's the latest allegation of insider trading on prediction markets. 595 00:33:00,874 --> 00:33:03,419 {\an8}Someone opened an account on Polymarket 596 00:33:03,502 --> 00:33:04,920 {\an8}and now they can make over a million. 597 00:33:05,004 --> 00:33:07,464 {\an8}What are your thoughts on this? This is just another coinky-dink. 598 00:33:07,548 --> 00:33:09,967 {\an8}Kalshi is proven itself over the last few months. 599 00:33:10,050 --> 00:33:11,969 We are applying these rules no matter who it is. 600 00:33:12,052 --> 00:33:14,471 {\an8}If somebody is going to try to cheat, we will catch them. 601 00:33:15,180 --> 00:33:18,308 {\an8}It's not some sort of offshore thing where it's done in the shadows. 602 00:33:18,392 --> 00:33:21,562 It's done right here in the middle of our financial system. 603 00:33:25,482 --> 00:33:28,819 {\an8}I know what happens in this office. I know the conversation we have. 604 00:33:28,902 --> 00:33:30,446 I know what I care about and what drives me. 605 00:33:30,529 --> 00:33:35,159 And you have to kind of oscillate between cutting out the noise, 606 00:33:35,242 --> 00:33:38,412 but also understanding people's criticism and concerns. 607 00:33:38,495 --> 00:33:41,707 Maybe there's things that you missed that other people are flagging. 608 00:33:41,790 --> 00:33:44,460 And maybe they hate you, but maybe they're actually making some good points. 609 00:33:44,543 --> 00:33:46,420 This is inherently evil and bad. 610 00:33:46,503 --> 00:33:48,172 Do you think Kenzie's gonna do the splits on Love Island? 611 00:33:48,255 --> 00:33:49,631 It feels nihilistic, right? 612 00:33:49,715 --> 00:33:52,718 It feels like, why are we betting on everything? 613 00:33:52,801 --> 00:33:55,512 There's a place for prediction markets. I think they should definitely exist. 614 00:33:55,596 --> 00:33:56,847 I think they have values. 615 00:33:56,930 --> 00:34:00,184 I just think there needs to be more guardrails, 616 00:34:00,267 --> 00:34:02,436 more thought put into how this industry 617 00:34:02,519 --> 00:34:05,439 - has come about and where it's headed. - Come on! 618 00:34:05,522 --> 00:34:08,025 Right now it feels like all gas, no brakes. 619 00:34:08,108 --> 00:34:11,862 When this is everywhere and you have a completely gamblified world… 620 00:34:13,405 --> 00:34:16,200 people are not going to integrate it healthily into their lives. 621 00:34:16,283 --> 00:34:18,160 And I'm as guilty of that as anybody. 622 00:34:19,953 --> 00:34:22,206 I'm kind of just letting it ride. 623 00:34:22,289 --> 00:34:24,500 When everything's a market, 624 00:34:24,583 --> 00:34:28,170 the opportunities for cheating are basically endless. 625 00:34:28,712 --> 00:34:31,924 That's a reality that we're going to be facing now. 626 00:34:32,007 --> 00:34:35,385 And it's going to be much more difficult to sort of 627 00:34:35,469 --> 00:34:37,096 find what's true now. 628 00:34:37,179 --> 00:34:38,847 And that, I think, really worries me. 629 00:34:39,723 --> 00:34:42,184 With a couple of months to go until the midterms, 630 00:34:42,267 --> 00:34:46,313 we've already seen volume that's far exceeded 2024. 631 00:34:48,565 --> 00:34:50,984 What I'm most interested in about them 632 00:34:51,068 --> 00:34:55,447 is their usefulness for forecasting the future. 633 00:34:55,531 --> 00:34:59,076 And these midterms are going to generate a lot of interest 634 00:34:59,159 --> 00:35:01,537 because there's a lot at stake in them. 635 00:35:01,620 --> 00:35:03,914 And so in that way, this is kind of 636 00:35:03,997 --> 00:35:06,375 one of the bigger tests of prediction markets. 637 00:35:08,335 --> 00:35:10,796 I think prediction markets have definitely hit critical mass. 638 00:35:10,879 --> 00:35:13,590 The growth in the prediction market has been so fast because they work. 639 00:35:14,633 --> 00:35:17,469 We're putting the prediction markets data next to the news, next to polls, 640 00:35:17,553 --> 00:35:20,305 next to everything else, so people can look at everything 641 00:35:20,389 --> 00:35:22,057 and make their own independent assessment. 642 00:35:22,141 --> 00:35:25,310 I think that it's inevitable that everyone will be 643 00:35:25,394 --> 00:35:27,604 looking at it to kind of understand what will happen. 644 00:35:27,688 --> 00:35:29,231 The only thing that you have to believe… 645 00:35:29,731 --> 00:35:31,733 to believe that prediction markets are going to keep growing the way 646 00:35:31,817 --> 00:35:35,487 they've been growing, is that there's going to be interesting news in the world. 647 00:35:35,571 --> 00:35:37,614 I feel like there's so much work left to be done 648 00:35:37,698 --> 00:35:39,825 in terms of the inventive side of prediction markets 649 00:35:39,908 --> 00:35:42,119 and what could be that isn't yet. 650 00:35:42,202 --> 00:35:44,163 We're very committed to this vision because we think it's one 651 00:35:44,246 --> 00:35:45,873 of the most important things we could be working on. 652 00:35:45,956 --> 00:35:48,834 And I feel like if I don't go and invent that 653 00:35:48,917 --> 00:35:50,794 or realize that vision, it probably won't happen.