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Downloaded from
YTS.BZ
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[pensive music playing]
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Official YIFY movies site:
YTS.BZ
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Today we're watching Argentina and Spain
in the World Cup Final.
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{\an8}We're in Las Vegas, Nevada
at the Mirage Mega Mansion.
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This is a Winible
World Cup watch weekend.
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Winible is essentially OnlyFans
for the sports betting creator economy.
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The guys in this house have made
millions of dollars on prediction markets,
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probably eight figures
just over the course of the World Cup.
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I like betting on Kalshi.
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Trading on Polymarket.
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At the beginning of the World Cup,
you get to pick
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who you think is gonna win
the whole World Cup.
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So, before it started, I put 5,000 dollars
on Spain to win the whole thing.
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So I put Spain to win.
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[man] Like, when you wake up,
you gotta put on your lucky underwear,
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take a deep breath, say a prayer.
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I think prediction markets
are low-key taking over the world.
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Welcome to day four of flipping
1k into ten grand on Polymarket.
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Now, to an industry skyrocketing
in popularity, prediction market.
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What are you guys talking about?
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Prediction market app, dude.
You know, online peer-to-peer betting.
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Hundred dollars on Kane to score. Done.
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10K on Jake Paul
makes you 90,000 dollars?
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[James] There are two major players,
Kalshi and Polymarket.
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{\an8}[Dustin] They really
don't like each other.
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{\an8}Kalshi has just posted
its most lucrative market ever.
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{\an8}Who will win the finals of the World Cup?
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It is shocking
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the extent to which prediction markets
have proliferated.
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Thanks to prediction markets,
you can now bet on basically anything.
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And I mean anything.
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[reporter 1] From Taylor Swift's
wedding date
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to the chances of an Iran nuclear deal.
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We're gambling on war.
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[reporter 2] The longtime teleprompter
operator for the president.
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{\an8}He's on leave now
for alleged insider trading.
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The long-term vision
is to financialize everything.
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This is my life. Me, just, like,
refreshing, refreshing, refreshing.
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{\an8}[man] This is the hyper-financialization
or hyper-gamification
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{\an8}of our entire lives.
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{\an8}- Hussein Obama.
- Yeah!
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And the whole world unfortunately
has become somewhat of a casino.
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[pensive music playing]
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[James] I've been writing
about the prediction markets
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for almost 25 years now.
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{\an8}The first real prediction market
that we know of was started
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{\an8}at the University of Iowa
in the late 1980s.
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They started with a really obvious one.
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How likely a candidate
was to win a presidential election.
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You would buy a contract
in Michael Dukakis
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if you thought Dukakis was going to win.
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And that market proved
to be exceptionally good,
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really better than almost all polls.
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And by doing so,
they create this really powerful
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kind of collective forecasting machine
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that taps into what I call
the wisdom of crowds.
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{\an8}[crowd chanting in foreign language]
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[James] The basic idea
of the wisdom of crowds
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is that under the right conditions,
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groups of people
can be remarkably intelligent.
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So, if you can figure out ways to tap into
that wisdom of crowds,
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then you can actually create tools
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that will solve problems
and even in some circumstances,
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and this would be
where prediction markets come in,
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forecast the future.
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This is how it works.
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Every prediction market starts
with a question.
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Let's say,
"Will the US government acknowledge
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the existence of aliens by 2029?"
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And that is a real market
in Kalshi right now.
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So, there are two options. Yes, or no.
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In a prediction market,
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there are always two people
trading against each other.
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So, for you to make this trade,
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you would buy shares of yes at 25% odds.
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Another person would have to take
the other side of that trade at 75%.
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The price in the market
is always changing
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{\an8}and that reflects the changing opinions
of the people in the crowd.
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{\an8}And you can cash out your bet
at any point.
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When the outcome is known,
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the winner gets 100% of the payout
and the loser gets nothing.
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Kalshi and Polymarket,
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they make money
by taking a transaction fee.
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The more people that bet,
the more money they make.
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[crowd chanting in foreign language]
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{\an8}[Morgan] We've got all of this
enthusiasm over World Cup
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{\an8}and a betting bonanza.
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{\an8}And Kalshi did more
than five billion bucks
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{\an8}in trading volume this week.
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{\an8}Joining us, Tarek Mansour
is a CEO and co-founder at Kalshi.
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{\an8}When he left MIT,
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{\an8}he joined really the giants
of Wall Street.
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{\an8}Prediction markets are covering things
that are top of people's minds.
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Things that are very kind of core
and front and center right now.
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And so, sports have been
an amazing propeller.
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I mean, it's massive.
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I mean, 30 to 40 billion dollars
in volume.
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The growth has been incredible.
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A lot of people watch sports,
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so it's an easy way
to kind of understand what this is
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and get educated
about prediction markets.
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A big chunk of the users
essentially convert to other things
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like the economy,
politics, weather, culture.
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If you're not making money
watching Love Island,
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you're doing it wrong.
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You know, it's interesting.
When we started the company, it was 2018.
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This was a time where, you know,
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you saw the sort of first wave
of misinformation, polarization,
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{\an8}the country being driven to the extremes.
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{\an8}You will not resist us!
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{\an8}[Tarek] Social media
was supposed to be a solution to that,
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{\an8}but it ended up adding fuel to fire.
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I am over it.
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The beauty of prediction markets
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is the incentive structure
is the opposite.
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The incentive structure
in the system is truth.
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It's a truth that's coming
from people with skin in the game.
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And, you know--
And you think about it, right?
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Like, you sit sometimes
at a dinner table at Thanksgiving,
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and everyone has all these crazy takes.
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And you're like,
"Hey, let's put ten dollars on it."
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And all of a sudden,
they get a lot more careful, right?
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The person that was so certain
about their belief and their opinion,
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all of a sudden
they're not so sure anymore.
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It's objective. It's mathematical.
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It's statistical in a way that
all the other mechanisms are not.
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And I love math.
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[indistinct chatter]
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[Tarek] I grew up in Lebanon
with a single mom and I lived, you know--
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The way I describe Lebanon
is a very volatile country.
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In this sort of complex,
constantly evolving dynamic environment,
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I found math to be a refuge.
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And prediction markets
are a bit of an application of that.
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You want the people
that are doing the research.
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You want the people that are like
very "sharp," or well-informed, or smart.
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And imagine if society,
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we basically tackled a lot
of our big questions by thinking more.
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{\an8}[birds cawing]
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{\an8}[reporter 1] We can think about Spain
and climbing Mount Everest.
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But you have to deal with that lot first
and see where you can go.
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[reporter 2] Look at the scene here.
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- Another Capri Sun?
- [Isaac] Yeah.
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I just get nervous
and I like drinking Capri Sun.
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{\an8}[laughs]
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{\an8}[Isaac] We're a bunch of people
who bet and trade on sports for a living
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and always trying to make
as much money as possible.
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In terms of placing this bet,
yeah, you know,
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{\an8}you just get probably way too comfortable
with moving around large amounts of money.
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Since prediction markets started offering
sports trading, I've made mid six figures.
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{\an8}I remember not that long ago when…
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{\an8}if Datian lost 100 bucks,
it would be pretty devastating.
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{\an8}And now I think it would probably
take 30 times to maybe even register.
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{\an8}[producer] And that's worth it
to you guys?
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Making a million dollars
in like two weeks?
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That seems pretty great to me.
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[reporter] …and he celebrates
like LeBron James.
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- [man] Wait. Belgium just scored.
- [Isaac] Yeah, we fucked-- We missed it.
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The prediction markets are faster
than the streams,
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so Belgium scored
before we actually got to see the goal.
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You've made so much. This is crazy.
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Datian just made
like 50,000 dollars on that goal.
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Look at him. Doesn't even feel a thing.
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The way it works, you have market makers
and then you have market takers.
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And in the vast majority of cases,
the market makers are sharp or smart,
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and the market takers are not smart
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in the sense
that they are making losing trades.
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I mean, Datian used to work
at Jane Street.
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{\an8}The people at Jane Street are
often described as mathematical.
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{\an8}They're problem solvers
in the most advanced way.
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[Isaac] I mean, yeah, we're all
only able to make money
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because people smarter than us
haven't entered these markets yet.
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Describe your perfect counterparty.
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I think it's just, like, someone
who randomly, like, place orders
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and has, like, zero information.
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{\an8}Yeah, someone who just
logs in and just wants
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{\an8}to bet on anything that they see.
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They're not making a sophisticated choice
as to what they're trading.
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They're just buying or selling
whatever it is that's in front of them.
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It's a fancy way of saying
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that he wants to be
against the 19-year-old
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who's randomly firing off.
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[pensive music playing]
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[indistinct chatter on TV]
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[Daniel] I'm 19 years old.
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{\an8}I work as a chef and…
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{\an8}I like to bet on Kalshi.
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[reporter] …used to scoring really well.
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[Daniel] I think I've always been
a little more impulsive
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and maybe adventurous than,
you know, my peers.
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A lot of my friends I grew up with, like,
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you know, didn't want to do
crazy things as much.
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{\an8}[producer] Crazy things like what?
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Gamble away all their rent.
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[laughing]
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{\an8}- We've been undefeated.
- So Kalshi is the sauce?
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{\an8}Thank you Kalshi.
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{\an8}[Daniel] When the Knicks made the finals,
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{\an8}that's when I would say started the peak
of how much I was putting into the Kalshi.
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I started with 1,000 dollars,
you know, went up and down,
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and then I borrowed
another 1,100 from my roommate.
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Yeah, and I lost it all, pretty much.
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[Timothée] Kalshi.
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I don't understand,
but this is going very well.
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[Isaac] Gambling can be
incredibly dangerous
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and problematic for a lot of people.
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It's especially true for young people.
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I mean, we just saw Timothée Chalamet
on TV saying,
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{\an8}"Sign up for Kalshi, it's great."
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{\an8}And one of the things
that is most dangerous, in my opinion is…
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an influencer saying
how they paid their rent
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by guessing the weather
or some person on YouTube
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talking about how easy
it is to get rich quick.
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[grunts]
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The more people you expose to that vice,
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the more people who are going
to have serious problems.
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[reporter] …will be Spain against Belgium
in Los Angeles this Friday.
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[Daniel] Tonight, I'm lucky.
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We can see it, the final screen,
which isn't much, you know.
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Now my portfolio is 300 dollars
and it's pending payout.
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It has been
the cause of significant stress
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like I haven't paid my rent for a month
because of this specifically.
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You know, I can say, "No, it doesn't
have that much of a grip on me,"
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but clearly it does a little bit.
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As of right now, I have 57 dollars
in my checking account.
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{\an8}[producer] Did you ever consider
putting limits on your Kalshi account?
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Yeah, there's a limit
on my Kalshi account.
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It's whatever I have
in my checking account is the limit.
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{\an8}[birds chirping]
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[Dustin] All right. I'm going
to hit the button in three, two, one.
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{\an8}My name is Dustin Gouker.
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{\an8}I'm the host of this podcast,
The Event Horizon.
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{\an8}We're here to talk this week
about prediction markets.
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Over the course of the World Cup,
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Kalshi has had the biggest days
it's had in its history.
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I don't think even I had a sense
of how big this would be for Kalshi.
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{\an8}Prediction markets are the fastest
growing industry this side of AI.
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{\an8}I have no doubt about it.
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These companies have
gotten big really fast.
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Everything is disrupted by this.
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It's like, it's changed
how we view the world.
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Polymarket kind of dominated
for the early 2020s.
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They're crypto native
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{\an8}and mostly unregulated
offshore until recently.
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{\an8}Kalshi was doing this totally differently.
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We spent four years getting regulated
before we launched a single product.
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{\an8}We have more than a thousand markets
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{\an8}across politics, entertainment, culture.
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{\an8}[Dustin] But the billions of dollars
we're hearing are not
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on real-world events
that really matter.
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Sports are about 85 to 90%
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of trading volume at Kalshi
right now as we sit here.
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It may not be legally gambling,
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but what is happening is
a 100% just gambling.
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{\an8}Kentucky's Attorney General is suing
the prediction market platforms.
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{\an8}…accusing them of facilitating
illegal sports betting.
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{\an8}[Dustin] That's what all
these court cases are about.
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Because gambling has always
been the purview of the state.
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A year and a half ago now,
Kalshi said, we're going to offer this,
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but we're going to do it
under federal law,
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no different than other exchanges
where you can buy a stock
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or sell a stock.
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We don't have
to worry about state laws.
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We are legally
under the federal government
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and that's it.
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{\an8}Whether something feels
and looks like gambling
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{\an8}doesn't necessarily make it gambling.
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{\an8}Speculation exists
in all financial markets.
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There's this patchwork
state-based solution
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where every single state is
like some sort
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of weird backdoor lobbying.
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[Dustin] The CFTC started off
just being very hands-off.
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Then we got a new chairman
of the CFTC, Michael Selig,
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and they became not just hands-off,
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but an active proponent of the industry.
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{\an8}[producer] Why is he doing that?
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I have to say this in a way
that won't get me in trouble. Let's see.
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Some people will argue that
it has to do with corruption.
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Some people will say
it's just deregulation.
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I'm not here to pontificate on that.
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It's hard to, like, separate the fact
that Donald Trump Jr.
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is an advisor to both Kalshi
and Polymarket.
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{\an8}Certainly, the president,
his family has a vested interest
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{\an8}in the success of prediction markets.
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And we have a CFTC
that is being very friendly now
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towards prediction markets.
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{\an8}[pensive music playing]
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[Michael] There's agreements
and walls that are put in place
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such that we're not dealing
with any members
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of the president's family
when it comes to policy.
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We don't engage
with the president's family
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{\an8}on any of these types of issues.
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{\an8}So in my belief and understanding
there is no sort of conflicts of interest.
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The prior administration
didn't like the prediction markets.
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I mean, that was very clear.
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They sought to ban the product
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with respect
to political prediction markets.
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{\an8}The courts threw it out
and then we saw the gates open.
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Prediction markets
are absolutely exploding.
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Events in pop culture and tech
and sports and climate
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and the world and literally
anything you can think of.
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[Michael] I've been in the seat
for about six months now
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and there's no clear rules
of the road yet,
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but we're trying to put those in place
as soon as we can.
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{\an8}[producer] What's your message then
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{\an8}to states who are trying to limit
prediction markets?
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{\an8}The law is clear.
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The law provides that the CFTC
has exclusive federal
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regulatory authority
over these markets
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because they are national markets.
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To any state that seeks
to circumvent federal regulation
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and replace federal law with state law,
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we will see you in court.
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{\an8}An exclusive interview
is Polymarket founder
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{\an8}and CEO Shayne Coplan.
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{\an8}…bounced around this sort
of startup tech crypto scene for a while.
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{\an8}This NYU dropout crypto bad boy.
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{\an8}He's now a billionaire.
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I think that when people think
about prediction markets right now,
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all they think about is sports.
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{\an8}I love sports, but…
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{\an8}I didn't start Polymarket
for it to be a sports site.
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I found myself in a lucky position.
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It was during the pandemic.
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I was broke.
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I was living in the Lower East Side.
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And I was like, when
are things gonna open back up?
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00:17:15,743 --> 00:17:18,246
When people talk about the vaccine,
when's it gonna be ready?
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When's shelter in place gonna be over?
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Are things gonna go back to normal?
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And I was like, this idea
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of information markets is the perfect…
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this is the perfect use case
in the perfect moment.
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And I think because of a mix
of my nerdy passion of markets
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and this sort of like academic literature
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about what today we think
of as prediction markets,
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plus maybe just enough creativity
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and being so broke
that I had nothing to lose.
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The triad of that, I was like,
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"Screw it, I'm going
to go build this thing."
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You know, when Polymarket really
glowed up and became a thing,
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it was all about politics.
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I think the real watershed moment,
the inflection point,
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was during the first debate
between Biden and Trump.
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{\an8}With the COVID…
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00:18:07,461 --> 00:18:09,297
{\an8}[stammers]
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00:18:09,380 --> 00:18:11,340
{\an8}[Shayne] When Biden started
stumbling with his words,
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the Polymarket
for him dropping out was skyrocketing
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and the Polymarket
for him winning was tanking.
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And someone said to me,
it was like a really funny quote.
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They were like, "Shayne, there's really
two things that can happen here."
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"Either he'll drop out and you build one
of the most important sites in the world
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or nothing's gonna happen
and you've lost all credibility,
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no one's ever gonna take Polymarket
seriously again."
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I was like, "Okay." Like, you know…
Like, let's see what happens.
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{\an8}We are coming on the air at this hour
with breaking news
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{\an8}President Biden has just announced
that he is ending his re-election bid.
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{\an8}[Shayne] When he dropped out,
that was a moment.
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{\an8}[reporter 1] Just a stunning
announcement from…
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00:18:52,298 --> 00:18:57,720
{\an8}And then Election Day was
this crazy moment where
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the way that the market moved that night
and called Trump winning
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when the TV stations were still talking
about, "Oh, it's neck and neck."
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{\an8}At the very end, we find a tie nationally,
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{\an8}49% for Harris, 49% for Trump.
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00:19:11,817 --> 00:19:14,362
{\an8}[reporter 2] Harris having
the slight edge over Trump
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{\an8}in the latest national poll, very slight.
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{\an8}Polymarket was spot on the entire time.
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That was one
of the most gratifying moments ever,
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just because the idea worked.
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The idea worked.
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And from that moment on,
there was the level of credibility
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that Polymarket had
and the way people thought about it
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had just changed entirely.
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[James] So prediction markets
have gotten very popular,
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00:19:42,223 --> 00:19:45,476
{\an8}but there hasn't been a steady evolution.
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[reporter 3] Another exotic idea
from the Pentagon's
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00:19:49,772 --> 00:19:52,983
Defense Advanced Research Projects Agency,
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00:19:53,067 --> 00:19:54,318
DARPA.
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{\an8}A futures market, if you will, in terror.
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[James] In 2003,
the intelligence community
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was planning on launching public markets
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00:20:04,120 --> 00:20:08,666
in geopolitical events
called "the policy analysis market."
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00:20:08,749 --> 00:20:10,960
It was going to be open to anyone.
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{\an8}The hope was that
the collective judgment of that market
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00:20:14,880 --> 00:20:19,343
would yield some useful information
for the U.S. intelligence community.
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What they mostly wanted
to forecast were things
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00:20:21,929 --> 00:20:26,475
like the political stability of regimes
or what was going to happen
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to oil in upcoming years.
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00:20:30,646 --> 00:20:35,151
But when they went to work
and kind of advertised the market,
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00:20:35,234 --> 00:20:37,403
they also talked about things like,
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00:20:37,486 --> 00:20:40,656
whether or not there would be
a missile attack from North Korea
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or betting on assassinations.
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00:20:44,160 --> 00:20:46,912
There was this just
massive backlash against it.
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{\an8}The federal government
is encouraging people to bet on
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00:20:51,125 --> 00:20:55,796
{\an8}and make money from atrocities
and terrorist attacks.
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You're gonna make money
if terrible things happen.
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Why are we potentially creating
an incentive for people to,
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like, go out and try an assassination?
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00:21:03,679 --> 00:21:06,140
{\an8}It is a tragic waste of taxpayers' money.
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00:21:06,223 --> 00:21:09,268
{\an8}It will be offensive to almost everyone.
Can you imagine…
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00:21:09,351 --> 00:21:12,855
{\an8}And the amazing thing is, as soon as
there was any pressure, they folded.
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00:21:12,938 --> 00:21:15,483
I mean, the whole thing
was over within, like, two days.
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00:21:15,566 --> 00:21:18,611
I think the main thing
that has changed, honestly,
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00:21:18,694 --> 00:21:21,906
is that we are just much
more comfortable with gambling
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00:21:21,989 --> 00:21:23,783
than we were 20 years ago.
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00:21:24,784 --> 00:21:28,204
So when you give people the chance to bet
on pretty much anything,
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00:21:28,287 --> 00:21:30,372
it gets complicated really fast.
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00:21:30,456 --> 00:21:34,543
And it seems like there
are three big issues,
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00:21:34,627 --> 00:21:37,171
let's call them
the "Dark Side of Prediction Markets."
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00:21:37,254 --> 00:21:39,673
The first one is insider trading.
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00:21:39,757 --> 00:21:43,803
{\an8}A U.S. Special Forces soldier
who helped to plan the January capture
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00:21:43,886 --> 00:21:47,264
{\an8}of Venezuelan President Nicolás Maduro
has been indicted.
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00:21:47,348 --> 00:21:48,933
{\an8}Now pleading not guilty.
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00:21:49,016 --> 00:21:51,936
{\an8}Authorities say he won
more than 400,000 dollars
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00:21:52,019 --> 00:21:54,563
{\an8}using classified information
to win on Polymarket.
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00:21:54,647 --> 00:21:57,191
{\an8}[reporter 1] Polymarket says
it referred the suspicious bets
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00:21:57,274 --> 00:21:58,359
{\an8}to the Department of Justice.
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00:21:58,442 --> 00:22:01,070
The second problem
is the problem of people
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00:22:01,153 --> 00:22:04,240
gaming the things that are used
to measure the outcomes.
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00:22:04,740 --> 00:22:06,951
{\an8}This involves tampered weather data.
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00:22:07,034 --> 00:22:10,663
{\an8}France's national forecaster
has filed a police complaint
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00:22:10,746 --> 00:22:13,290
after detecting
suspicious temperature spikes
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00:22:13,374 --> 00:22:14,708
at Paris' Charles de Gaulle airport.
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00:22:14,792 --> 00:22:18,921
{\an8}Somehow the equipment was tampered with,
maybe a lighter, maybe a hairdryer,
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00:22:19,004 --> 00:22:22,007
{\an8}to give this five-degree Celsius spike
in the reading.
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00:22:22,091 --> 00:22:24,385
[James] Third, and I think
by far the most consequential,
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00:22:24,468 --> 00:22:28,305
is when the existence
of a prediction market,
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00:22:28,848 --> 00:22:31,934
actually changes what people do.
429
00:22:32,685 --> 00:22:33,936
There was a Kalshi market
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00:22:34,019 --> 00:22:36,897
on whether or not
George Santos would show up
431
00:22:36,981 --> 00:22:38,858
at the State of the Union address.
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00:22:38,941 --> 00:22:41,193
I'm going to be there
for the State of the Union
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00:22:41,277 --> 00:22:42,862
in the gallery, guys.
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00:22:42,945 --> 00:22:48,492
Santos had reportedly made a bet on Kalshi
on the "no" side of the contract.
435
00:22:48,576 --> 00:22:50,244
That is, he would not show up.
436
00:22:50,327 --> 00:22:53,163
[reporter 2] During the address,
he posted, "Watching State of the Union
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00:22:53,247 --> 00:22:55,875
from an airport TV
was not part of the plan."
438
00:22:55,958 --> 00:22:58,294
By skipping the speech,
sources say he pocketed
439
00:22:58,377 --> 00:23:00,087
tens of thousands of dollars.
440
00:23:00,629 --> 00:23:02,798
I do think going forward,
they're just gonna have to figure out
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00:23:02,882 --> 00:23:03,883
how to manage this.
442
00:23:04,508 --> 00:23:07,553
[pensive music playing]
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00:23:12,182 --> 00:23:16,353
[Robert] All right, so where are we
on requesting materials
444
00:23:16,437 --> 00:23:19,064
from the traders in Georgia?
445
00:23:20,149 --> 00:23:22,109
He keeps spamming our inbox.
446
00:23:22,818 --> 00:23:24,236
{\an8}Because the account is frozen?
447
00:23:25,362 --> 00:23:26,363
{\an8}Yeah, yeah.
448
00:23:26,447 --> 00:23:28,616
{\an8}I suspect that that person's
just nervous also
449
00:23:28,699 --> 00:23:31,076
{\an8}that there's an inquiry
into their activity.
450
00:23:33,537 --> 00:23:37,041
{\an8}Any regulated financial institution
is going to face
451
00:23:37,124 --> 00:23:40,002
{\an8}people who come to commit financial crime,
452
00:23:40,085 --> 00:23:42,379
{\an8}whether it's money laundering,
whether it's insider trading,
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00:23:42,463 --> 00:23:44,256
{\an8}market manipulation, etc.
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00:23:45,299 --> 00:23:48,427
So I lead our investigations
and the enforcement actions
455
00:23:48,510 --> 00:23:50,179
that we undertake.
456
00:23:50,262 --> 00:23:53,557
Our team's grown quite a bit
in the last year.
457
00:23:53,641 --> 00:23:56,560
We have about 15 to 20 employees,
458
00:23:56,644 --> 00:23:58,979
individuals who are just focused
on surveillance.
459
00:23:59,063 --> 00:24:01,231
We have individuals
who are surveilling for fraud,
460
00:24:01,774 --> 00:24:03,400
and then also a legal team.
461
00:24:03,484 --> 00:24:06,028
We've hired surveillance analysts
from the FBI.
462
00:24:06,654 --> 00:24:08,781
We have people
with backgrounds at the CFTC
463
00:24:08,864 --> 00:24:10,449
and the Department of Justice.
464
00:24:10,532 --> 00:24:15,037
There's been a significant increase
in our investigative and referral efforts
465
00:24:15,120 --> 00:24:19,124
over the last six months in particular,
just as the exchange has grown.
466
00:24:19,208 --> 00:24:23,087
Our surveillance algorithms
are running over every single trade
467
00:24:23,170 --> 00:24:24,171
happening on the exchange.
468
00:24:24,254 --> 00:24:26,966
When they demonstrate
some anomalous behavior,
469
00:24:27,049 --> 00:24:31,887
whether that's a very well-timed trade,
a pattern of very well-timed trades,
470
00:24:31,971 --> 00:24:35,975
a very significant price jump
that occurs right after an unusual trade,
471
00:24:36,058 --> 00:24:39,311
all those things might trigger
a trade that comes across my desk
472
00:24:39,395 --> 00:24:41,021
or the surveillance team's desk.
473
00:24:41,689 --> 00:24:42,564
So, then…
474
00:24:42,648 --> 00:24:47,361
There's probably a 100, 150 each quarter
that are meaningful investigations
475
00:24:47,444 --> 00:24:50,948
that may lead to some finding
of wrongdoing or disciplinary action.
476
00:24:51,031 --> 00:24:54,535
And we've made dozens of referrals
to law enforcement.
477
00:24:55,536 --> 00:24:58,497
Any new product or evolution in technology
478
00:24:58,580 --> 00:25:02,793
leads to really smart bad actors
figuring out how to game that system.
479
00:25:03,293 --> 00:25:07,548
And the key is to try to stay
one or five steps
480
00:25:07,631 --> 00:25:09,466
in front of them at all times.
481
00:25:09,550 --> 00:25:11,677
You won't always succeed at that.
482
00:25:14,430 --> 00:25:17,099
{\an8}[birds chirping]
483
00:25:17,850 --> 00:25:20,519
[Caleb] This is one of the big things
that I spoiled myself with.
484
00:25:21,311 --> 00:25:24,189
This is paid for by prediction markets.
485
00:25:24,815 --> 00:25:26,233
With the press of a button,
486
00:25:26,316 --> 00:25:32,364
you can go from a sunlit room
to what becomes total darkness.
487
00:25:34,992 --> 00:25:36,744
{\an8}Brought to me 100% by Kalshi.
488
00:25:36,827 --> 00:25:41,081
My wife would not let me spend this money
if it wasn't just like bonus money.
489
00:25:41,165 --> 00:25:43,167
{\an8}Back in March of 2024,
490
00:25:43,250 --> 00:25:46,628
{\an8}Kalshi really started to hit
the culture markets hard.
491
00:25:46,712 --> 00:25:49,131
In theory, their music and movie markets,
492
00:25:49,214 --> 00:25:51,133
the way that you win 'em is by using math.
493
00:25:51,216 --> 00:25:55,137
So, I turned, you know,
a 10,000 dollar deposit
494
00:25:55,220 --> 00:25:59,516
into over 200,000 dollars
in about six or seven months.
495
00:25:59,600 --> 00:26:02,603
The most common plays
that I would do on Spotify
496
00:26:02,686 --> 00:26:05,481
is who will get number one
during a given month.
497
00:26:06,690 --> 00:26:08,358
June 28th…
498
00:26:08,901 --> 00:26:10,819
[Olivia] ♪ Talk to me, talk to me ♪
499
00:26:10,903 --> 00:26:13,322
[Caleb] …I noticed some weird pricing
on Olivia Dean.
500
00:26:13,405 --> 00:26:16,950
Somebody thought that there was
a more than 11% chance
501
00:26:17,034 --> 00:26:18,869
Olivia Dean was going to get first.
502
00:26:19,995 --> 00:26:22,706
And I thought the true odds
of Olivia Dean getting first place
503
00:26:22,790 --> 00:26:24,625
naturally was zero.
504
00:26:24,708 --> 00:26:26,251
This was an old song.
505
00:26:26,335 --> 00:26:29,755
When I dug into the details,
I was very concerned.
506
00:26:30,506 --> 00:26:33,926
The data that I was looking at
is the top 200 songs.
507
00:26:34,468 --> 00:26:36,386
Most of 'em saw a drop.
508
00:26:36,470 --> 00:26:39,181
Two of them were newer songs,
like newer small songs.
509
00:26:39,264 --> 00:26:41,308
It's not unusual for those to go up,
510
00:26:41,391 --> 00:26:46,105
but for a well-established song
to go up almost 20%
511
00:26:46,188 --> 00:26:48,107
like this Drake song did,
512
00:26:48,190 --> 00:26:51,443
or 7% like this Olivia Dean song did,
513
00:26:52,027 --> 00:26:55,781
this is a very strong sign
that fraud was happening.
514
00:26:56,448 --> 00:27:00,327
In theory, somebody is stream botting
or stream boosting.
515
00:27:00,410 --> 00:27:05,374
It's just artificial,
automated ways of "listening to music"
516
00:27:05,457 --> 00:27:07,042
where nobody's really listening to it.
517
00:27:07,126 --> 00:27:08,794
They're just trying to run up the numbers.
518
00:27:08,877 --> 00:27:13,632
So, at this point, I had 17,000 dollars
that Drake wouldn't get first place,
519
00:27:13,715 --> 00:27:15,217
and I had 13,000 dollars
520
00:27:15,300 --> 00:27:17,761
that Olivia Dean
wouldn't get first place.
521
00:27:17,845 --> 00:27:18,971
And I was quite worried.
522
00:27:19,763 --> 00:27:23,016
So, I started sending emails.
I emailed Kalshi.
523
00:27:24,393 --> 00:27:28,188
I emailed Spotify
saying I was completely convinced
524
00:27:28,272 --> 00:27:32,151
that the Drake and Olivia Dean streams
were being botted,
525
00:27:32,234 --> 00:27:35,112
but they didn't seem
to take it very seriously.
526
00:27:37,364 --> 00:27:40,033
[insects trilling]
527
00:27:40,117 --> 00:27:45,497
[Caleb] Then the results come out,
and I look at who's in first place,
528
00:27:45,581 --> 00:27:46,957
and it wasn't Olivia Dean.
529
00:27:47,791 --> 00:27:49,168
And it wasn't Drake.
530
00:27:51,461 --> 00:27:52,546
It was Malcolm Todd.
531
00:27:53,130 --> 00:27:55,340
[upbeat music playing]
532
00:27:55,424 --> 00:27:56,466
[record scratches]
533
00:27:56,550 --> 00:27:59,011
[Caleb] Like, what? That makes no sense.
534
00:27:59,094 --> 00:28:02,806
Malcolm Todd wasn't even on the radar
as a possibility.
535
00:28:03,432 --> 00:28:07,144
And if you look at this chart,
you can see, boom,
536
00:28:07,227 --> 00:28:09,104
just this huge spike.
537
00:28:09,813 --> 00:28:13,525
So, his streams went up by 70%
in a single day.
538
00:28:14,401 --> 00:28:17,154
And then they paid it out,
and then I was pissed.
539
00:28:20,282 --> 00:28:22,242
Spotify removed the streams.
540
00:28:23,994 --> 00:28:26,580
And they admitted
that they were fraudulent.
541
00:28:27,623 --> 00:28:31,001
But then in seeing how Kalshi handled it,
542
00:28:31,084 --> 00:28:35,339
how they just stopped replying,
I liquidated my Kalshi account.
543
00:28:35,422 --> 00:28:39,176
So, I withdrew maybe 220,000 dollars?
544
00:28:39,259 --> 00:28:40,594
[boy] Dad!
545
00:28:41,345 --> 00:28:44,056
[Robert] There are individuals
who take a look at something and say,
546
00:28:44,139 --> 00:28:46,433
I can conclude this is bots
and it's manipulation,
547
00:28:46,516 --> 00:28:48,268
and they may very well be right.
548
00:28:48,352 --> 00:28:49,978
{\an8}But from a legal perspective,
549
00:28:50,062 --> 00:28:52,397
{\an8}you need evidence
to make that determination.
550
00:28:52,481 --> 00:28:56,276
{\an8}You can't just say it looks like a duck
and it quacks like a duck so it is.
551
00:28:56,360 --> 00:28:58,278
We're gathering the evidence
we would need
552
00:28:58,362 --> 00:28:59,488
to make that determination,
553
00:28:59,571 --> 00:29:02,115
but that's pretty much the most
that I can comment on
554
00:29:02,199 --> 00:29:03,825
in terms of specifics about that.
555
00:29:04,493 --> 00:29:05,744
Okay, Patricio.
556
00:29:05,827 --> 00:29:07,955
It's kind of the Wild West right now.
557
00:29:08,038 --> 00:29:11,667
Regulation has not caught up
to what these markets are doing at all.
558
00:29:13,085 --> 00:29:17,547
And as long as it's the platforms
basically policing themselves,
559
00:29:17,631 --> 00:29:20,759
they're going to grow
as much as they possibly can…
560
00:29:20,842 --> 00:29:21,969
Gonna go and get a goal!
561
00:29:22,052 --> 00:29:24,471
…offer as many markets
as they possibly can,
562
00:29:24,554 --> 00:29:27,015
and consequences be damned.
563
00:29:29,142 --> 00:29:32,145
[indistinct chatter]
564
00:29:34,898 --> 00:29:38,735
[reporter 1] It is day 11 of the US-Israel
war with Iran.
565
00:29:38,819 --> 00:29:40,779
[reporter 2]
The strikes lighting up the night sky
566
00:29:40,862 --> 00:29:43,532
and sending people rushing to shelter.
567
00:29:47,786 --> 00:29:49,621
{\an8}[Emanuel] My name is Emanuel Fabian.
568
00:29:50,289 --> 00:29:52,249
I've been working for The Times of Israel
569
00:29:52,332 --> 00:29:54,209
for around six years now.
570
00:29:55,627 --> 00:29:58,714
{\an8}I basically cover everything
related to the Israeli military.
571
00:29:59,631 --> 00:30:02,926
I'm at this point covering
the Iranian attacks on Israel
572
00:30:03,010 --> 00:30:05,220
and Israel's attacks on Iran.
573
00:30:06,471 --> 00:30:10,183
On March 10th, there was, you know,
one of several missiles that day,
574
00:30:11,143 --> 00:30:15,647
which struck outside the city
of Beit Shemesh near Jerusalem.
575
00:30:17,190 --> 00:30:19,776
They reported there was
no injuries, no damage.
576
00:30:20,652 --> 00:30:22,779
There wasn't anything particularly unusual
577
00:30:22,863 --> 00:30:25,866
in the grand scheme of things of this war.
578
00:30:27,409 --> 00:30:29,911
Much later that day,
I get kind of an unusual email,
579
00:30:29,995 --> 00:30:32,831
essentially asking me
to change my earlier reporting.
580
00:30:32,914 --> 00:30:36,710
And they were claiming that the missile
that struck was fragments
581
00:30:36,793 --> 00:30:39,504
that were following an interception
of a missile.
582
00:30:41,214 --> 00:30:42,632
And I respond to them and said,
583
00:30:42,716 --> 00:30:46,595
"Look, residents told me
that they felt a massive explosion
584
00:30:46,678 --> 00:30:48,305
and a shockwave
that shook all their windows."
585
00:30:48,805 --> 00:30:52,309
And the army also confirmed to me that
it was a missile that struck the area.
586
00:30:55,354 --> 00:30:59,149
And then I started getting
a barrage of messages.
587
00:31:02,110 --> 00:31:06,907
They wrote here, "If you do not
correct this by 1:00 a.m. Israel time,
588
00:31:06,990 --> 00:31:10,619
you are brining upon yourself damage
you have never imagined you would suffer."
589
00:31:10,702 --> 00:31:13,163
"You make us lose 900,000 dollars,
590
00:31:13,246 --> 00:31:15,832
we will invest no less than that
to finish you."
591
00:31:17,626 --> 00:31:21,421
It was scary at that point.
I'm married. I have a young daughter.
592
00:31:22,172 --> 00:31:25,384
I didn't know what this person
was actually capable of.
593
00:31:26,259 --> 00:31:30,180
At that point, it was very clear to me
that it was bets on Polymarket.
594
00:31:31,348 --> 00:31:32,849
Essentially, the bet was,
595
00:31:32,933 --> 00:31:36,103
"Did Iran strike Israel
on a specific date?"
596
00:31:36,186 --> 00:31:37,646
You can see that the amount of money
597
00:31:37,729 --> 00:31:41,817
that was bet here reached
23 million dollars.
598
00:31:42,776 --> 00:31:46,029
Those who had voted "no"
were the ones trying to convince me
599
00:31:46,113 --> 00:31:48,740
to change my report
and to say that it was intercepted.
600
00:31:49,449 --> 00:31:51,284
But I was not going to change the story
601
00:31:51,368 --> 00:31:52,953
and it was going to stay
exactly how it is.
602
00:31:54,454 --> 00:31:56,873
It wouldn't surprise me
if there are many more cases.
603
00:31:57,666 --> 00:32:00,460
Journalists being threatened
to change their reporting,
604
00:32:00,544 --> 00:32:02,462
I don't think I'll be the last.
605
00:32:05,090 --> 00:32:08,093
[pensive music playing]
606
00:32:24,401 --> 00:32:27,529
[upbeat music playing]
607
00:32:27,612 --> 00:32:30,365
{\an8}Prediction markets are a cesspool.
608
00:32:30,449 --> 00:32:35,078
{\an8}Even if it is legal, right,
is there something immoral
609
00:32:35,162 --> 00:32:37,539
{\an8}or ethically questionable
here about betting
610
00:32:37,622 --> 00:32:41,751
{\an8}on geopolitical events
when lives are potentially at stake?
611
00:32:41,835 --> 00:32:45,046
{\an8}We haven't done a good enough job
in terms of, you know,
612
00:32:45,130 --> 00:32:47,215
{\an8}distilling why we do what we do.
613
00:32:47,299 --> 00:32:52,387
I know that we are probably
in some, like, vibe debt, maybe,
614
00:32:52,888 --> 00:32:54,848
in terms of just how people kind of
615
00:32:54,931 --> 00:32:57,601
group Polymarket in
with a lot of other stuff.
616
00:32:57,684 --> 00:33:00,770
{\an8}It's the latest allegation
of insider trading on prediction markets.
617
00:33:00,854 --> 00:33:03,398
{\an8}Someone opened an account
on Polymarket
618
00:33:03,482 --> 00:33:04,900
{\an8}and now they can make over a million.
619
00:33:04,983 --> 00:33:07,444
{\an8}What are your thoughts on this?
This is just another coinky-dink.
620
00:33:07,527 --> 00:33:09,946
{\an8}Kalshi is proven itself
over the last few months.
621
00:33:10,030 --> 00:33:11,948
We are applying these rules
no matter who it is.
622
00:33:12,032 --> 00:33:14,451
{\an8}If somebody is going to try to cheat,
we will catch them.
623
00:33:15,160 --> 00:33:18,288
{\an8}It's not some sort of offshore thing
where it's done in the shadows.
624
00:33:18,371 --> 00:33:21,541
It's done right here in the middle
of our financial system.
625
00:33:25,462 --> 00:33:28,798
{\an8}I know what happens in this office.
I know the conversation we have.
626
00:33:28,882 --> 00:33:30,425
I know what I care about
and what drives me.
627
00:33:30,509 --> 00:33:35,138
And you have to kind of oscillate
between cutting out the noise,
628
00:33:35,222 --> 00:33:38,391
but also understanding
people's criticism and concerns.
629
00:33:38,475 --> 00:33:41,686
Maybe there's things that you missed
that other people are flagging.
630
00:33:41,770 --> 00:33:44,439
And maybe they hate you, but maybe
they're actually making some good points.
631
00:33:44,523 --> 00:33:46,399
This is inherently evil and bad.
632
00:33:46,483 --> 00:33:48,151
Do you think Kenzie's gonna do
the splits on Love Island?
633
00:33:48,235 --> 00:33:49,611
[Dustin] It feels nihilistic, right?
634
00:33:49,694 --> 00:33:52,697
It feels like,
why are we betting on everything?
635
00:33:52,781 --> 00:33:55,492
There's a place for prediction markets.
I think they should definitely exist.
636
00:33:55,575 --> 00:33:56,826
I think they have values.
637
00:33:56,910 --> 00:34:00,163
I just think there needs to be
more guardrails,
638
00:34:00,247 --> 00:34:02,415
more thought put
into how this industry
639
00:34:02,499 --> 00:34:05,418
- has come about and where it's headed.
- Come on!
640
00:34:05,502 --> 00:34:08,004
Right now it feels like
all gas, no brakes.
641
00:34:08,088 --> 00:34:11,841
When this is everywhere and you have
a completely gamblified world…
642
00:34:13,385 --> 00:34:16,179
people are not going to integrate it
healthily into their lives.
643
00:34:16,263 --> 00:34:18,139
And I'm as guilty of that as anybody.
644
00:34:19,933 --> 00:34:22,185
[Daniel] I'm kind of just letting it ride.
645
00:34:22,269 --> 00:34:24,479
When everything's a market,
646
00:34:24,563 --> 00:34:28,149
the opportunities for cheating
are basically endless.
647
00:34:28,692 --> 00:34:31,903
That's a reality that we're
going to be facing now.
648
00:34:31,987 --> 00:34:35,365
And it's going to be much
more difficult to sort of
649
00:34:35,448 --> 00:34:37,075
find what's true now.
650
00:34:37,158 --> 00:34:38,827
And that, I think, really worries me.
651
00:34:39,703 --> 00:34:42,163
[speaker] With a couple of months
to go until the midterms,
652
00:34:42,247 --> 00:34:46,293
we've already seen volume
that's far exceeded 2024.
653
00:34:48,545 --> 00:34:50,964
What I'm most interested in about them
654
00:34:51,047 --> 00:34:55,427
is their usefulness
for forecasting the future.
655
00:34:55,510 --> 00:34:59,055
And these midterms are going
to generate a lot of interest
656
00:34:59,139 --> 00:35:01,516
because there's a lot at stake in them.
657
00:35:01,600 --> 00:35:03,893
And so in that way, this is kind of
658
00:35:03,977 --> 00:35:06,354
one of the bigger tests
of prediction markets.
659
00:35:08,315 --> 00:35:10,775
I think prediction markets
have definitely hit critical mass.
660
00:35:10,859 --> 00:35:13,570
The growth in the prediction market
has been so fast because they work.
661
00:35:14,613 --> 00:35:17,449
We're putting the prediction markets data
next to the news, next to polls,
662
00:35:17,532 --> 00:35:20,285
next to everything else,
so people can look at everything
663
00:35:20,368 --> 00:35:22,037
and make their own
independent assessment.
664
00:35:22,120 --> 00:35:25,290
I think that it's inevitable
that everyone will be
665
00:35:25,373 --> 00:35:27,584
looking at it to kind of understand
what will happen.
666
00:35:27,667 --> 00:35:29,210
The only thing that you have to believe…
667
00:35:29,711 --> 00:35:31,713
to believe that prediction markets
are going to keep growing the way
668
00:35:31,796 --> 00:35:35,467
they've been growing, is that there's
going to be interesting news in the world.
669
00:35:35,550 --> 00:35:37,594
I feel like there's
so much work left to be done
670
00:35:37,677 --> 00:35:39,804
in terms of the inventive side
of prediction markets
671
00:35:39,888 --> 00:35:42,098
and what could be that isn't yet.
672
00:35:42,182 --> 00:35:44,142
We're very committed to this vision
because we think it's one
673
00:35:44,225 --> 00:35:45,852
of the most important things
we could be working on.
674
00:35:45,935 --> 00:35:48,813
And I feel like
if I don't go and invent that
675
00:35:48,897 --> 00:35:50,774
or realize that vision,
it probably won't happen.
676
00:35:53,151 --> 00:35:56,154
[pensive music playing]