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You Can Bet on Everything Now. What Could Go Wrong? · Question Everything

• 0:07
  Speaker 1: So this is a bet I can make right now.
• 0:10
  Speaker 1: I'm hanging out with three reporters who cover gambling, and
• 0:13
  Speaker 1: I'm about to place a bet, an experimental online bet.
• 0:16
  Speaker 1: One of the reporters is Danny Funt, who wrote the
• 0:19
  Speaker 1: book Everybody Loses, The Tumultuous Rise of American Sports Gambling.
• 0:23
  Speaker 2: What's your game of choice?
• 0:24
  Speaker 1: Craps.
• 0:25
  Speaker 3: Okay.
• 0:25
  Speaker 1: Yeah, how about you?
• 0:26
  Speaker 2: Probably blackjack if I'm at a casino. Okay, I'll just
• 0:28
  Speaker 2: post up at a table.
• 0:29
  Speaker 1: Yeah, my grandfather taught me craps when I was a teenager,
• 0:33
  Speaker 1: and it's the thing we did in common.
• 0:35
  Speaker 2: Wow.
• 0:35
  Speaker 1: Yeah, got that connection for me. I like it a
• 0:37
  Speaker 1: little too much. The bets I have in front of
• 0:41
  Speaker 1: me now on my laptop are totally different than Papa's craps.
• 0:44
  Speaker 1: I'm looking at something called a prediction market. These are
• 0:47
  Speaker 1: new companies that have popped up. The two most well-known
• 0:50
  Speaker 1: right now are probably Kalshi and Polymarket, where you can
• 0:52
  Speaker 1: basically place a wager on anything. What's going to be
• 0:56
  Speaker 1: the top U.S. Netflix show this week? You can bet
• 1:00
  Speaker 1: on who will win Survivor Season 50, the Super Mario
• 1:03
  Speaker 1: Galaxy movie Rotten Tomatoes score. What's that going to be?
• 1:06
  Speaker 1: These are all on the site Kalshi. That's what I'm
• 1:08
  Speaker 1: on right now. You can place a wager on who's
• 1:11
  Speaker 1: going to be the Democratic presidential nominee in two years,
• 1:14
  Speaker 1: what the next unemployment numbers are going to be, oil prices,
• 1:17
  Speaker 1: weather events, how long the government shutdown's going to last,
• 1:20
  Speaker 1: which celebs are going to go to the Met Gala.
• 1:23
  Speaker 1: But what's becoming clearer by the week is that these
• 1:25
  Speaker 1: seemingly trivial wagers about where Taylor Swift and Travis Kelsey
• 1:29
  Speaker 1: are going to get married, about who's going to be
• 1:31
  Speaker 1: on the Madden 27 video game cover, actually have major
• 1:34
  Speaker 1: implications for the state of politics, information, even war. Today
• 1:39
  Speaker 1: we have another After Hours discussion at the wine shop,
• 1:41
  Speaker 1: Bibber & Bell, where we huddle periodically with reporters. For
• 1:44
  Speaker 1: this conversation, three experts are going to fill us in
• 1:47
  Speaker 1: on what is going on with these fast-growing betting sites
• 1:50
  Speaker 1: that seem to be infiltrating all aspects of life. And
• 1:53
  Speaker 1: to kick things off, As research, of course, I went
• 1:56
  Speaker 1: ahead and placed a bet. Since, you know, learn by doing, right?
• 2:00
  Speaker 1: What will Rachel Maddow say during her show tonight? This
• 2:04
  Speaker 1: is a whole category on Kalshi. Betting on words you
• 2:07
  Speaker 1: think news anchors or politicians are going to say. They're
• 2:09
  Speaker 1: called mention markets. These are some of the words that
• 2:13
  Speaker 1: you can bet on what she might say.
• 2:16
  Speaker 4: We got Trump.
• 2:17
  Speaker 1: Prison slash jail. Our question everything producer, Sam Egan, read them. TSA.
• 2:21
  Speaker 5: TSA.
• 2:22
  Speaker 1: Oil slash gas slash gasoline. Election.
• 2:25
  Speaker 4: Hormuz.
• 2:26
  Speaker 1: Russia. Cuba.
• 2:28
  Speaker 4: Israel.
• 2:29
  Speaker 2: So dumb.
• 2:32
  Speaker 1: Each of these words has a percentage next to it
• 2:34
  Speaker 1: on the website. That's what Kelshi has determined are the
• 2:36
  Speaker 1: odds that Rachel Maddow will say each phrase and that
• 2:39
  Speaker 1: it pays out accordingly. You can bet on her saying
• 2:41
  Speaker 1: the phrase or on her not saying each phrase. There
• 2:44
  Speaker 1: are also charts and graphs on the page that kind
• 2:46
  Speaker 1: of make it look like investing. I'm trying to think
• 2:49
  Speaker 1: about what happened in the news today that Maddow might
• 2:51
  Speaker 1: talk about. I wanted to bet on something that would
• 2:53
  Speaker 1: pay decently. Rachel Maddow saying Trump is a given, so
• 2:56
  Speaker 1: it doesn't pay very much. One of our guests, reporter
• 2:59
  Speaker 1: Kate Nibbs from Wired, makes a suggestion.
• 3:02
  Speaker 5: You know, there actually also was a breaking news story
• 3:05
  Speaker 5: about insider trading on prediction markets.
• 3:07
  Speaker 2: So she like.
• 3:10
  Speaker 1: Let's do that. Let's do it. This is the word insider.
• 3:13
  Speaker 1: And it's and it's like 23 percent likelihood. So it'll
• 3:15
  Speaker 1: pay better.
• 3:16
  Speaker 5: Right.
• 3:16
  Speaker 1: So how do I do this? I click this. I
• 3:18
  Speaker 1: click yes on the word insider. Rachel Maddow is going
• 3:21
  Speaker 1: to say the word insider during her show tonight. I
• 3:25
  Speaker 1: put down $ 10. I'll get $ 42 if she says the
• 3:30
  Speaker 1: word insider. Not bad odds.
• 3:32
  Speaker 3: It's good action.
• 3:33
  Speaker 1: The CEO of Kalshi has claimed that the goal of
• 3:35
  Speaker 1: his company is to monetize, quote, any difference of opinion. Kalshi,
• 3:41
  Speaker 1: by the way, is the Arabic word for everything. This
• 3:45
  Speaker 1: seems like a noteworthy change. being able to suddenly wager
• 3:49
  Speaker 1: money on any event in the world from your phone.
• 3:52
  Speaker 1: At tonight's drinking session, I wanted to get these reporters
• 3:55
  Speaker 1: who cover this closely to tell me, how do these
• 3:58
  Speaker 1: markets work? What are the rules around them? And what
• 4:01
  Speaker 1: are the ways they're seeing that gambling is changing journalism,
• 4:05
  Speaker 1: changing how the news is covered, and also just changing
• 4:08
  Speaker 1: the news itself? Because it's starting to seem like bets
• 4:12
  Speaker 1: might actually be influencing real events. From cabinet firings to
• 4:16
  Speaker 1: missile strikes, to the deposing of world leaders.
• 4:20
  Speaker 5: A lot of people think that we are truly moving
• 4:22
  Speaker 5: towards a world in which we can place wagers on
• 4:26
  Speaker 5: the outcome of anything.
• 4:28
  Speaker 1: From KCRW and Placement Theory, this is Question Everything. I'm
• 4:31
  Speaker 1: Brian Reed. I was so surprised by what I learned
• 4:34
  Speaker 1: in this conversation. Stick around. I feel like this whole
• 4:43
  Speaker 1: online gambling mania has snuck up on me. The other night,
• 4:47
  Speaker 1: I'm watching CNN and seeing data with a Kalshi logo
• 4:49
  Speaker 1: all over the screen. Lots of news outlets are now
• 4:52
  Speaker 1: striking deals with prediction market companies and integrating data from
• 4:56
  Speaker 1: the markets into their coverage, kind of like how they'd
• 4:58
  Speaker 1: use polls. CNN, but also the Wall Street Journal, Fox,
• 5:02
  Speaker 1: the AP, even Substack.
• 5:04
  Speaker 6: Today, our network, CBC, announced a multi-year agreement with Kalshi,
• 5:07
  Speaker 6: which includes the use of Kalshi data for editorial purposes
• 5:10
  Speaker 6: as well as commercial components.
• 5:13
  Speaker 1: What are the prediction markets saying? about where they see
• 5:15
  Speaker 1: inflation going.
• 5:16
  Speaker 3: Yeah, where does the Kalshi prediction market.
• 5:17
  Speaker 1: Kalshi says it processed over $ 22 billion in bets last year.
• 5:22
  Speaker 1: It takes a fee on every one. And now these
• 5:25
  Speaker 1: news organizations are somehow in on the action.
• 5:27
  Speaker 3: How about the chance that Jeffries is the next House speaker?
• 5:30
  Speaker 2: Look at this.
• 5:30
  Speaker 4: Three months ago, according to the Kalshi prediction market, it
• 5:33
  Speaker 4: was a 66% chance.
• 5:34
  Speaker 3: Now, today, we're talking about a 79% chance.
• 5:37
  Speaker 1: I don't really understand how these partnerships with news orgs work.
• 5:41
  Speaker 1: How exactly the money is changing hands. seems like a
• 5:43
  Speaker 1: whole new constellation of conflicts of interest, which is why
• 5:46
  Speaker 1: I wanted to get these journalists together. They've all been
• 5:49
  Speaker 1: investigating the rise of prediction markets and also gambling and sports,
• 5:52
  Speaker 1: which really is a precursor to what's happening in news.
• 5:56
  Speaker 1: The reporters who join me tonight are Danny Funt, who
• 5:58
  Speaker 1: just had a book come out about sports betting, and
• 6:00
  Speaker 1: he reports on the prediction markets too.
• 6:02
  Speaker 7: I have a whole chapter about the VIP side of
• 6:05
  Speaker 7: the betting business.
• 6:06
  Speaker 1: There's June Lee, a sports reporter who spent years at ESPN,
• 6:10
  Speaker 1: who's recently gone independent with a YouTube channel. and has
• 6:12
  Speaker 1: taken a very critical stance against gambling's influence on sports media.
• 6:16
  Speaker 3: I'm in like a $ 200 fantasy baseball.
• 6:18
  Speaker 1: League right now.
• 6:19
  Speaker 3: Oh yeah, you're gambling.
• 6:20
  Speaker 1: And then Kate Nibbs, who covers prediction markets for Wired.
• 6:23
  Speaker 1: She reports a lot on attempts or failures to regulate
• 6:26
  Speaker 1: these companies and the alleged insider trading that's happening in
• 6:29
  Speaker 1: these markets.
• 6:30
  Speaker 5: If you spend any time on the phone with their
• 6:32
  Speaker 5: comms teams, they're going to tell you they don't place bets.
• 6:37
  Speaker 5: You're purchasing a binary futures contract.
• 6:42
  Speaker 1: The companies that run the prediction markets say their sites
• 6:45
  Speaker 1: aren't gambling. You're investing in the outcome of an event. Yes,
• 6:49
  Speaker 1: something will happen. No, something won't. But Danny says don't
• 6:52
  Speaker 1: be fooled.
• 6:53
  Speaker 7: The notion that what you just did is something other
• 6:55
  Speaker 7: than gambling is so ridiculous.
• 6:57
  Speaker 1: Well, I didn't even know people were claiming it's not gambling.
• 7:00
  Speaker 1: The day we recorded this, I saw a big Kalshi
• 7:02
  Speaker 1: ad in the subway that said in huge, bold letters,
• 7:06
  Speaker 1: Kalshi rule number four, we operate under U.S. law, which,
• 7:10
  Speaker 1: you know, was very much a question I had. How
• 7:13
  Speaker 1: is this legal? The answer is that Kalshi filed a
• 7:16
  Speaker 1: lawsuit to argue that it should be legal and won.
• 7:20
  Speaker 1: The company successfully convinced a court that they're not a
• 7:23
  Speaker 1: gambling site, they're offering financial products, and so that's how
• 7:26
  Speaker 1: they're treated. A federal agency, the Commodities Future Trading Commission,
• 7:31
  Speaker 1: the CFTC, is supposed to oversee all the trades on Kalshi,
• 7:35
  Speaker 1: which seems nuts when you think about the Matto bet
• 7:37
  Speaker 1: we just placed or this other bet we looked at.
• 7:40
  Speaker 1: which is which insulting nicknames you think President Trump is
• 7:43
  Speaker 1: going to use before the end of the month. Again,
• 7:46
  Speaker 1: my producer Sam did the honors.
• 7:48
  Speaker 4: Whackjob, Low Energy, Crazy Bernie, Piggy, Slopadopoulos, Fat Slob, Pocahontas,
• 7:56
  Speaker 4: Biden Crime Family. Comrade Kamala, Little Communist, Rocket Man, Tampon Tim.
• 8:03
  Speaker 1: A federal regulator approved every one of those?
• 8:05
  Speaker 2: Yeah, in theory.
• 8:06
  Speaker 7: Technically, they're all approved by the CFTC. There's some ways
• 8:10
  Speaker 7: of streamlining that. where it's sort of a rubber stamp
• 8:14
  Speaker 7: for stuff they've done previously, but yeah.
• 8:17
  Speaker 1: And what criteria are they approving these or not on? Like,
• 8:20
  Speaker 1: what are they not approving?
• 8:20
  Speaker 5: Well, you randomly can't do anything about onion futures.
• 8:24
  Speaker 1: Why?
• 8:25
  Speaker 2: Because, like, in the 50s, there was this corrupt.
• 8:28
  Speaker 5: Onion futures trader who amassed a bunch of money by
• 8:33
  Speaker 5: rigging the onion futures market, and so the federal government
• 8:37
  Speaker 5: made a law specifically outlawing onion futures, and it's still
• 8:40
  Speaker 5: in effect today.
• 8:41
  Speaker 1: So you won't see anything about onions on here. There
• 8:44
  Speaker 1: are also more serious rules.
• 8:46
  Speaker 5: This has been a whole big thing, like you can't
• 8:48
  Speaker 5: do death, war, assassination markets.
• 8:51
  Speaker 1: The CFTC says prediction markets like Kalshi aren't supposed to
• 8:55
  Speaker 1: offer trades on whether a human will be killed. There
• 8:58
  Speaker 1: was a controversy over this last month when the U.S.
• 9:01
  Speaker 1: and Israel killed the Ayatollah of Iran in a missile strike.
• 9:05
  Speaker 1: Kalshi had had a prediction market running on whether the
• 9:07
  Speaker 1: Ayatollah would be, quote, out as supreme leader. which I
• 9:11
  Speaker 1: guess was supposed to mean him leaving office or maybe
• 9:14
  Speaker 1: getting ousted. But people were upset when they didn't get
• 9:17
  Speaker 1: paid out after he was assassinated. The other thing that's
• 9:21
  Speaker 1: wild about prediction markets, they've created a cornucopia of fresh
• 9:25
  Speaker 1: opportunities for insider trading. Like gambling, these markets require a
• 9:29
  Speaker 1: lot of people to lose so that a few people
• 9:31
  Speaker 1: can win, which means people who are better positioned with
• 9:34
  Speaker 1: inside information can cheat. They're not supposed to. That's insider trading,
• 9:38
  Speaker 1: even on CalSheet. And the CFTC is meant to be
• 9:41
  Speaker 1: regulating that. But I saw a video on TikTok not
• 9:44
  Speaker 1: long ago that made me realize just how easy this
• 9:47
  Speaker 1: is now that so many events are fair game for betting.
• 9:50
  Speaker 1: It was from Chris Hayes, a colleague of Rachel Maddow's
• 9:53
  Speaker 1: at MSNOW. He had just left the CBS studios where
• 9:56
  Speaker 1: he'd recorded a segment on The Late Show with Stephen Colbert.
• 10:00
  Speaker 1: If you didn't know, those interviews on Late Night TV
• 10:01
  Speaker 1: are pre-recorded. So Chris had gone and done the interview
• 10:04
  Speaker 1: with Colbert around 5 p.m. and it was going to
• 10:06
  Speaker 1: run later that night.
• 10:08
  Speaker 6: As I'm walking out, having done the interview in front
• 10:12
  Speaker 6: of a live audience, several hundred people, I got this
• 10:15
  Speaker 6: text from an old friend and colleague of mine, a
• 10:17
  Speaker 6: guy named Bobby Allen, a phenomenal reporter at NPR who
• 10:20
  Speaker 6: covers tech. And he sends me this screenshot. Now, as
• 10:23
  Speaker 6: you can see, this is a market that now exists
• 10:27
  Speaker 6: on Calchi. For what I am going to say on
• 10:31
  Speaker 6: Stephen Colbert, you can make bets there. I'm like, will
• 10:33
  Speaker 6: I say Donald Trump?
• 10:34
  Speaker 1: Will I say affordability?
• 10:35
  Speaker 6: Will I mention China or Russia?
• 10:37
  Speaker 1: A mention market. And I was sort of shocked by this.
• 10:40
  Speaker 6: I didn't realize really that you can bet on something
• 10:43
  Speaker 6: as niche and obscure as like.
• 10:45
  Speaker 1: What I say on Stephen Colbert.
• 10:48
  Speaker 6: But there was a $ 22, 000 market, meaning there's like $ 22, 000
• 10:52
  Speaker 6: worth of.
• 10:52
  Speaker 1: Bets happening on this.
• 10:53
  Speaker 6: And of course, the crazier thing about it to me
• 10:55
  Speaker 6: was that this wasn't a future event.
• 10:57
  Speaker 1: This had happened.
• 10:58
  Speaker 6: We have recorded it. I, Stephen Colbert, production staff and
• 11:02
  Speaker 6: all the people in the building know what I said
• 11:06
  Speaker 6: or didn't say.
• 11:08
  Speaker 1: So all of those people, anyone who was in the
• 11:10
  Speaker 1: live audience or working on the show or Chris himself,
• 11:13
  Speaker 1: have this five or six hour window, basically, where they
• 11:17
  Speaker 1: can be insider traders and bet or pass information to
• 11:20
  Speaker 1: someone else to bet on what words Chris is going
• 11:23
  Speaker 1: to say when his prerecorded interview is broadcast later. Kalshi
• 11:28
  Speaker 1: ended up featuring this bet on their homepage and it
• 11:30
  Speaker 1: started ballooning to $ 800, 000 and $ 900, 000. Like close to a
• 11:32
  Speaker 1: million dollar market.
• 11:37
  Speaker 6: On what I will say on Colbert when it has
• 11:40
  Speaker 6: been prerecorded.
• 11:42
  Speaker 1: It would be so easy to game this. My producer
• 11:45
  Speaker 1: Sam and I thought about this with the bet we
• 11:47
  Speaker 1: just placed on what Rachel Maddow is going to say
• 11:49
  Speaker 1: on her show. Sam knows people who work at MSNOW,
• 11:52
  Speaker 1: people who are in the building while Maddow's show is
• 11:54
  Speaker 1: being written and taped. He could, theoretically, call up his
• 11:59
  Speaker 1: friends right now in the minutes before air and ask
• 12:02
  Speaker 1: them just to take a peek at the scripts. Tell
• 12:04
  Speaker 1: us what words show up, what to bet on. If
• 12:07
  Speaker 1: we were to call someone there and ask them, are
• 12:09
  Speaker 1: we doing something illegal?
• 12:10
  Speaker 5: Yeah.
• 12:11
  Speaker 1: That is illegal.
• 12:11
  Speaker 5: Yeah.
• 12:12
  Speaker 2: For you and the MSNOW employee.
• 12:14
  Speaker 1: Yeah. And the crime is?
• 12:16
  Speaker 5: It's like the same thing as insider trading with the SEC,
• 12:19
  Speaker 5: like taking non-public material information and benefiting from it. Will
• 12:24
  Speaker 5: you get arrested? It's a totally separate question, but technically
• 12:28
  Speaker 5: it is illegal.
• 12:29
  Speaker 3: One of the most recent examples is the invasion of
• 12:32
  Speaker 3: Venezuela when they got Nicolas Maduro and brought him back
• 12:36
  Speaker 3: to New York.
• 12:37
  Speaker 1: June, the sports reporter, says an anonymous better on Polymarket,
• 12:41
  Speaker 1: one of Kelshi's competitors, put down $ 20, 000 on Venezuelan President
• 12:45
  Speaker 1: Maduro being out as the country's leader.
• 12:48
  Speaker 3: Within a couple hours of that actually happening.
• 12:50
  Speaker 1: Hours before that was even a thought.
• 12:52
  Speaker 3: Before it had broken in the news. Someone had placed
• 12:54
  Speaker 3: a lot of money into that bet.
• 12:57
  Speaker 1: When the U.S. captured Maduro, this mystery better made $ 400, 000.
• 13:02
  Speaker 3: Insider trading is almost central to the utility and the
• 13:05
  Speaker 3: business model of these platforms.
• 13:06
  Speaker 1: Wait, say more.
• 13:07
  Speaker 2: Why?
• 13:07
  Speaker 3: Because it's basically saying that people, they know something is
• 13:11
  Speaker 3: going to happen. They're going to put hundreds of thousands
• 13:14
  Speaker 3: of dollars into these prediction markets. And that is a
• 13:18
  Speaker 3: more accurate depiction. or prediction of what is going to
• 13:21
  Speaker 3: happen than whatever is coming out of the news media.
• 13:23
  Speaker 3: The logic is that that is the most up-to-date, accurate
• 13:27
  Speaker 3: version of information that anyone in the world can get.
• 13:30
  Speaker 1: But you're saying it rests on the fact that people
• 13:32
  Speaker 1: are insider trading. I will say, Kalshi's motto, which I've
• 13:36
  Speaker 1: noticed popping up every time I open the app, certainly
• 13:39
  Speaker 1: seems like it's goading users into insider trading. The motto is,
• 13:43
  Speaker 1: trade on what you know. When we asked Kalshi about this,
• 13:46
  Speaker 1: a media rep named Jack Such wrote us a long
• 13:48
  Speaker 1: email saying that the motto is not about insider trading,
• 13:51
  Speaker 1: that they're trying to encourage experts to use their knowledge
• 13:54
  Speaker 1: to make trades that will lead to more accurate markets and, quote,
• 13:58
  Speaker 1: keep the public better informed about current events. Jack says
• 14:01
  Speaker 1: insider trading is incredibly rare on Kelshi, less than 0.01%
• 14:05
  Speaker 1: of activity on the site, and that the company works
• 14:08
  Speaker 1: hard to prevent it because if people think of the
• 14:10
  Speaker 1: market as a swamp of insiders, as he put it,
• 14:13
  Speaker 1: people will stop trading. It's true that after that whole
• 14:16
  Speaker 1: Chris Hayes situation, Kalshi did end mentioned markets on late
• 14:19
  Speaker 1: night shows. Jack Such also stressed that Kalshi is not
• 14:23
  Speaker 1: the same as their much less regulated competitor, PolyMarket. Over
• 14:27
  Speaker 1: on PolyMarket, which is an offshore company, though Americans still
• 14:30
  Speaker 1: use it by logging on through a VPN, death and
• 14:33
  Speaker 1: war markets are allowed. PolyMarket runs on cryptocurrency, so there's
• 14:37
  Speaker 1: a public ledger of every transaction involving each user's virtual
• 14:41
  Speaker 1: crypto wallet. You can't see who owns the wallet, but
• 14:45
  Speaker 1: you can see the shady bets.
• 14:46
  Speaker 5: There have been a ton of instances that have been
• 14:48
  Speaker 5: documented of wallets that certainly seem like they're insider trading
• 14:53
  Speaker 5: on U.S.
• 14:54
  Speaker 2: Military actions.
• 14:55
  Speaker 5: Really suspicious activity like wallets that were just created before
• 15:00
  Speaker 5: an Iran strike and there's $ 700, 000 and then they never
• 15:04
  Speaker 5: make another move again. There was a wallet that had
• 15:08
  Speaker 5: MAGA in like the title of it and they were
• 15:11
  Speaker 5: placing like huge bets on Iran war strikes.
• 15:15
  Speaker 1: Getting it right?
• 15:16
  Speaker 3: Yeah, yeah, yeah. And like right before there was any news.
• 15:19
  Speaker 5: Published about it. People like Senator Chris Murphy has come
• 15:23
  Speaker 5: out and just straight up said, I think members of
• 15:26
  Speaker 5: the Trump staff are insider trading on the Iran war
• 15:29
  Speaker 5: on polymarket.
• 15:31
  Speaker 1: But there's been nothing proven yet.
• 15:33
  Speaker 5: No. And so far, no one has been arrested and
• 15:35
  Speaker 5: no one even seems to have been investigated. Like the
• 15:38
  Speaker 5: first criminal trial on insider trading on prediction markets hasn't
• 15:42
  Speaker 5: happened yet.
• 15:46
  Speaker 1: Markets like this create a very disturbing opportunity. for people
• 15:49
  Speaker 1: in power to make decisions, take potentially life or death
• 15:52
  Speaker 1: actions to win a bet or help someone win a bet.
• 15:56
  Speaker 1: When you start gaming it out, you can picture all
• 15:58
  Speaker 1: sorts of ways the prediction markets might begin shaping reality.
• 16:02
  Speaker 1: You can imagine, for instance, a close political race where
• 16:06
  Speaker 1: a super PAC starts plowing cash behind their candidate in
• 16:09
  Speaker 1: a prediction market, which makes it seem like the candidate's ahead,
• 16:12
  Speaker 1: which the news channels would start reporting because they treat
• 16:16
  Speaker 1: these markets like polls. which could turn into real political
• 16:19
  Speaker 1: momentum and affect the outcome of the election. You can
• 16:22
  Speaker 1: also imagine new pressures on reporters. That's already starting to happen.
• 16:27
  Speaker 5: There's this wild story that happened recently with a Times
• 16:29
  Speaker 5: of Israel reporter. He reported a fairly straightforward news story
• 16:34
  Speaker 5: about a missile detonating and basically got death threats from
• 16:39
  Speaker 5: polymarket bettors who were trying to pressure him to change
• 16:43
  Speaker 5: the wording of his news report.
• 16:45
  Speaker 1: So these people had bet that there wouldn't be a
• 16:46
  Speaker 1: missile attack on a certain day, basically?
• 16:48
  Speaker 5: Yeah, or vice versa.
• 16:49
  Speaker 1: Changed the truth, basically.
• 16:50
  Speaker 5: Yeah.
• 16:51
  Speaker 3: They didn't care about the truth.
• 16:53
  Speaker 5: They wanted to win their bet, trying to strong arm
• 16:57
  Speaker 5: a news outlet to change their article because a lot
• 17:00
  Speaker 5: of the geopolitical current events contracts resolve based on the
• 17:05
  Speaker 5: outcome of like reputable news sources. And like that just
• 17:09
  Speaker 5: seems like it's got to be the beginning of something
• 17:11
  Speaker 5: terrible because we have all of these different events that
• 17:14
  Speaker 5: people are wagering like sometimes millions and millions of dollars on.
• 17:18
  Speaker 1: Are there any stories that you've heard of or been
• 17:20
  Speaker 1: able to report out of like individual journalists being bribed?
• 17:23
  Speaker 2: That is my dream story.
• 17:25
  Speaker 5: So if anyone listening knows, please hit me up.
• 17:28
  Speaker 3: It's got to be happening. I feel like I can
• 17:30
  Speaker 3: kind of speak to the bribing thing on a personal
• 17:32
  Speaker 3: level because.
• 17:33
  Speaker 1: Do tell. This is June, the YouTube sports reporter.
• 17:36
  Speaker 3: So I launched an independent YouTube channel covering sports and
• 17:39
  Speaker 3: culture and gambling is one of the major topics that
• 17:42
  Speaker 3: I cover. I've tweeted a lot about the way that
• 17:44
  Speaker 3: sports gambling has changed the fan experience, how it's changed
• 17:48
  Speaker 3: sports media and how people talk about sports and how
• 17:51
  Speaker 3: People listen to podcasts about sports. And I had a
• 17:53
  Speaker 3: tweet a couple months ago critiquing the CEO of Kalshi
• 17:57
  Speaker 3: who went on a CNBC program and basically insinuated that
• 18:00
  Speaker 3: insider trading is kind of central to the platform's business model.
• 18:03
  Speaker 1: I tweeted that.
• 18:05
  Speaker 3: Within two days, I got an email from an agency
• 18:08
  Speaker 3: that represented Kalshi saying, hey, we're looking to sponsor your
• 18:11
  Speaker 3: YouTube channel.
• 18:12
  Speaker 1: Are you interested?
• 18:14
  Speaker 2: Really?
• 18:14
  Speaker 5: Yes. Days? Days.
• 18:16
  Speaker 3: And I've got multiple emails about this, too.
• 18:18
  Speaker 5: Wow.
• 18:19
  Speaker 3: And different gambling platforms as well.
• 18:21
  Speaker 1: What'd you say? Did you respond? I politely declined. What
• 18:24
  Speaker 1: do you think their perception is when they reach out
• 18:26
  Speaker 1: to you? Like, what's your kind of reading between the lines?
• 18:29
  Speaker 3: I think they either are unwittingly, like, ignorant of my
• 18:33
  Speaker 3: takes on gambling. Maybe that's kind of naive. Like, that
• 18:36
  Speaker 3: is the most generous reading of it. You know, the
• 18:39
  Speaker 3: least generous, most cynical reading of it is, like, they
• 18:41
  Speaker 3: saw my tweets and they were just like, hey, see
• 18:44
  Speaker 3: if we can buy this person off.
• 18:46
  Speaker 2: I've gotten that too.
• 18:47
  Speaker 1: It's funny. You have a similar story, Danny.
• 18:48
  Speaker 7: Just like a few days ago, someone was like, hey,
• 18:51
  Speaker 7: because a big piece of customer acquisition for gambling sites
• 18:55
  Speaker 7: is paying for referrals. The dollar figures are pretty bananas.
• 18:59
  Speaker 7: You know, $ 500 or $ 600 per customer who clicks a
• 19:02
  Speaker 7: link on some news site and then goes and signs
• 19:05
  Speaker 7: up for a betting account. There's another business model where
• 19:09
  Speaker 7: they give you a share of that person's future losses,
• 19:12
  Speaker 7: sometimes as high as 45% of your net losses.
• 19:16
  Speaker 1: What?
• 19:17
  Speaker 2: Yeah.
• 19:18
  Speaker 4: So if I post a link on my Instagram and
• 19:20
  Speaker 4: I'm like, hey, guys, check out my FanDuel link, and
• 19:22
  Speaker 4: then you, Danny, click on it, and you bet $ 1, 000
• 19:25
  Speaker 4: on the Raptors winning and they lose, I get $ 450, theoretically?
• 19:29
  Speaker 1: Yep.
• 19:30
  Speaker 2: That's not that uncommon.
• 19:32
  Speaker 1: Just to clarify, Danny's not talking about Kalshi here. Kalshi
• 19:35
  Speaker 1: says they don't profit off of or offer shares of
• 19:38
  Speaker 1: their customers' losses, and also that their outreach to June
• 19:41
  Speaker 1: wasn't related to his comments about their CEO. Danny's offer
• 19:44
  Speaker 1: came from a different sports betting site.
• 19:46
  Speaker 7: And so someone who facilitates those deals was like, hey,
• 19:50
  Speaker 7: your rinky-dink dannyfund.com website, why don't you do that with
• 19:54
  Speaker 7: us and we'll give you a share of people who
• 19:56
  Speaker 7: click on gambling links and go bet with us. They
• 19:59
  Speaker 7: did the littlest amount of research, but now we're not
• 20:03
  Speaker 7: the people they want to partner with.
• 20:04
  Speaker 5: I know.
• 20:05
  Speaker 1: Have you been reached out to? No, I'm a little offended.
• 20:14
  Speaker 1: When was like the first deal with a news organization?
• 20:17
  Speaker 3: I think it was last year.
• 20:19
  Speaker 1: Which was the first?
• 20:20
  Speaker 7: It might have been Yahoo Finance and Polymarket.
• 20:23
  Speaker 1: Okay.
• 20:23
  Speaker 2: And then soon after, CNN, CNBC with Kalshi.
• 20:26
  Speaker 1: Okay. And what are these deals? Like, what does a
• 20:29
  Speaker 1: CNN partnership with Kalshi mean?
• 20:30
  Speaker 7: That they'll exclusively reference Kalshi odds when they reference prediction
• 20:35
  Speaker 7: market data, and that they'll incorporate it in coverage in
• 20:38
  Speaker 7: various ways.
• 20:39
  Speaker 2: Or they have segments where.
• 20:40
  Speaker 7: They'll say, now we're going to go to the board
• 20:42
  Speaker 7: and look at, you know, the price of a cabinet
• 20:45
  Speaker 7: secretary being ousted based on Kalshi data.
• 20:49
  Speaker 1: Like, are they making money on bets? Like, is CNN
• 20:51
  Speaker 1: making money on bets in some way?
• 20:54
  Speaker 5: Yeah, I don't know. The, like, granular details of the
• 20:57
  Speaker 5: partnerships are pretty opaque right now, though. It's, like, hard
• 21:00
  Speaker 5: to get them to speak openly about exactly what's happening.
• 21:05
  Speaker 5: So there are still, like, a lot of unanswered questions.
• 21:08
  Speaker 2: CNBC's is interesting.
• 21:10
  Speaker 7: I don't know the specifics of this, but they do
• 21:12
  Speaker 7: have a customer acquisition component, which could resemble what we
• 21:16
  Speaker 7: were talking about, where... Kalshi is paying CNBC to get
• 21:21
  Speaker 7: people to click on Kalshi links and go sign up
• 21:24
  Speaker 7: for Kalshi.
• 21:25
  Speaker 3: CNBC also has equity.
• 21:27
  Speaker 1: In Kalshi? Yeah.
• 21:28
  Speaker 5: Okay.
• 21:29
  Speaker 7: All the conflicts of interest that can come with that,
• 21:31
  Speaker 7: that is definitely.
• 21:34
  Speaker 2: Significant.
• 21:35
  Speaker 7: It motivates CNBC to promote Kalshi excessively, to make it
• 21:40
  Speaker 7: sound like a way to win money, to shy away
• 21:42
  Speaker 7: from covering the negative aspects, even if something as basic
• 21:45
  Speaker 7: as how hard it is to win money for the
• 21:48
  Speaker 7: average person or these insider trading dangers, on and on
• 21:52
  Speaker 7: and on.
• 21:53
  Speaker 1: I will say, there are interesting arguments that these prediction
• 21:56
  Speaker 1: markets can have real news value, and if harnessed correctly,
• 22:00
  Speaker 1: could help promote more accurate information about what's going on
• 22:02
  Speaker 1: in the world.
• 22:03
  Speaker 7: The whole, like, wisdom of crowds appeal of prediction markets
• 22:07
  Speaker 7: is really powerful and compelling.
• 22:09
  Speaker 5: There is like this whole body of research that points
• 22:11
  Speaker 5: to different ways that they're better than like experts or polling.
• 22:16
  Speaker 7: I remember one that was like if a crowd bets
• 22:18
  Speaker 7: on like the weight of a cow or something. And
• 22:21
  Speaker 7: like they don't have to have any knowledge of like
• 22:23
  Speaker 7: how heavy cows are. And they tend like the number
• 22:25
  Speaker 7: like the aggregate number tends to be like exactly what
• 22:28
  Speaker 7: the cow weighs.
• 22:28
  Speaker 5: Yeah.
• 22:29
  Speaker 2: Better than experts.
• 22:30
  Speaker 1: Cow experts. Like a bovine expert.
• 22:32
  Speaker 7: Somehow when you distill all that opinions and information. it
• 22:36
  Speaker 7: tends to be really spot on. So if we were
• 22:39
  Speaker 7: trying to predict how many troops should be in another country,
• 22:44
  Speaker 7: if we had a prediction market on what's the best number,
• 22:47
  Speaker 7: it would be potentially a lot more insightful than if
• 22:51
  Speaker 7: someone at the Pentagon had to make that call.
• 22:54
  Speaker 1: I saw something in some of your reporting, Danny, that
• 22:56
  Speaker 1: markets where more money was wagered were more accurate. Is
• 23:00
  Speaker 1: that right?
• 23:00
  Speaker 5: Oh, yeah.
• 23:00
  Speaker 7: So if there's a high-profile Senate race getting hundreds of
• 23:05
  Speaker 7: millions of dollars in action, those numbers are a lot
• 23:08
  Speaker 7: more valuable than something that's getting 20,000, like what Rachel
• 23:12
  Speaker 7: Maddow will say.
• 23:13
  Speaker 5: Got it.
• 23:14
  Speaker 1: The adage, put your money where your mouth is.
• 23:17
  Speaker 7: Yeah, the money is a reflection of a lot of
• 23:19
  Speaker 7: people and a lot of people who.
• 23:20
  Speaker 2: Have strong convictions.
• 23:22
  Speaker 7: I don't know about y'all, but I already catch myself
• 23:24
  Speaker 7: if I'm like, who's going to win best picture or
• 23:27
  Speaker 7: who's up in the primary?
• 23:29
  Speaker 2: I look at the prediction markets.
• 23:31
  Speaker 7: I do think there's a case to be made that
• 23:33
  Speaker 7: this can motivate people to be reading the news or
• 23:36
  Speaker 7: following the news in ways that they're not.
• 23:37
  Speaker 2: And that's a plus.
• 23:39
  Speaker 7: There was a study done kind of investigating could this
• 23:43
  Speaker 7: combat misinformation. And they took climate change skeptics and believers
• 23:50
  Speaker 7: and they had them engage in prediction markets on short
• 23:53
  Speaker 7: term measures of climate change like rising ocean levels and
• 23:57
  Speaker 7: extreme weather. And they found that the people who were
• 24:00
  Speaker 7: climate change skeptics, if they won money betting on those
• 24:05
  Speaker 7: proxies for climate change, very short-term signs of climate change,
• 24:09
  Speaker 7: like ocean levels going up. At the end of the study,
• 24:12
  Speaker 7: they were more likely to now be accepting that climate
• 24:15
  Speaker 7: change is real. So that's pretty promising.
• 24:18
  Speaker 1: And is there any understanding what's happening there? Like they're then,
• 24:21
  Speaker 1: to make the bet, they're reading information to try and
• 24:24
  Speaker 1: understand how much ocean levels might rise. And in doing
• 24:27
  Speaker 1: that and kind of like investing in it both financially
• 24:30
  Speaker 1: and intellectually, they're coming to believe the facts more.
• 24:34
  Speaker 2: Yeah.
• 24:34
  Speaker 7: And then even beyond that, one of the neuroscientists who
• 24:37
  Speaker 7: was conducting the study theorized to me that what makes
• 24:41
  Speaker 7: you money tends to become part of your identity. So
• 24:45
  Speaker 7: if you were making money by betting there are signs
• 24:49
  Speaker 7: of climate change, you were more likely to then say, okay,
• 24:52
  Speaker 7: I believe this, as opposed to just hearing an argument
• 24:56
  Speaker 7: of why this is happening.
• 24:59
  Speaker 1: So people came to believe in the reality of climate change.
• 25:02
  Speaker 1: And the idea is people could become more invested, literally,
• 25:06
  Speaker 1: in factual information in general, in staying up to date
• 25:09
  Speaker 1: about the news, because it's making them money. Kalshi's rep
• 25:12
  Speaker 1: wrote in his email to us, quote, Social media, mainstream media,
• 25:16
  Speaker 1: alternative media, polling, and academia, really everything except prediction markets,
• 25:21
  Speaker 1: have incentive structures with human bias baked into them. Kalshi data,
• 25:25
  Speaker 1: he said, is, quote, The only form of information in
• 25:29
  Speaker 1: the world that is verifiably free of bias. The ruthless
• 25:33
  Speaker 1: efficiency of capitalism applied to the pursuit of truth. That's
• 25:38
  Speaker 1: the argument in favor of prediction markets. Coming up, we
• 25:41
  Speaker 1: look at sports gambling, which my guests argue has shown
• 25:45
  Speaker 1: us the many downsides. How have you seen this affect athletes? Oh,
• 25:48
  Speaker 1: it's so bad. It is so bad. Hey everybody, it's
• 25:57
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• 25:59
  Speaker 1: while ago, but I've been dealing with this pretty scary
• 26:01
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• 26:05
  Speaker 1: One of the first things I thought when this happened was,
• 26:07
  Speaker 1: oh man, I have got to reactivate my Delete.me account.
• 26:10
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• 26:12
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• 26:15
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• 26:24
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• 26:27
  Speaker 1: after I was doing a big investigative story for the
• 26:28
  Speaker 1: New York Times, and we were worried that we might
• 26:30
  Speaker 1: get threats from that. And I'm really regretful that I
• 26:33
  Speaker 1: let it lapse. As soon as the threats started coming in,
• 26:35
  Speaker 1: my wife and I signed back up, and we received
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• 26:59
  Speaker 1: We'll include this info in the show notes too. Hey, everybody.
• 27:04
  Speaker 1: I want to tell you about this sponsor of Question Everything.
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• 27:09
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  Speaker 1: behind them and language that's being used. For instance, they
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  Speaker 1: the topic this episode is about, prediction markets. Can you
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  Speaker 1: so they know we sent you. If you want to
• 28:07
  Speaker 1: get a sense of what the future might look like
• 28:09
  Speaker 1: with prediction markets now rocketing through the news industry, sports
• 28:13
  Speaker 1: betting is a good place to look. It used to
• 28:15
  Speaker 1: be that betting on sports was relatively hard to access.
• 28:18
  Speaker 1: You had to go to a physical room in a
• 28:20
  Speaker 1: handful of states or on a reservation or do it illegally.
• 28:23
  Speaker 1: You could really only bet on things that were hard
• 28:25
  Speaker 1: to influence, like the outcome of an entire football game
• 28:28
  Speaker 1: or the total points scored. But since online sports gambling
• 28:32
  Speaker 1: was legalized less than a decade ago, we've gone from
• 28:35
  Speaker 1: Americans casting about $ 4. 9 billion in sports bets to $ 167
• 28:40
  Speaker 1: billion last year. Nearly half of men age 18 to
• 28:44
  Speaker 1: 49 have an active online sports book account now. It's
• 28:47
  Speaker 1: super widespread. And it's also led to the rise of
• 28:50
  Speaker 1: a species of bet, the prop bet, where you can
• 28:53
  Speaker 1: wager on all sorts of little outcomes in a game,
• 28:55
  Speaker 1: often tied to the performance of one player. Like how
• 28:58
  Speaker 1: many fouls someone will make or how many points they're
• 29:00
  Speaker 1: going to score in the first quarter. And this has
• 29:02
  Speaker 1: had a massive impact on sports. I know there's been
• 29:05
  Speaker 1: a bunch of scandals kind of, you know, in sports
• 29:08
  Speaker 1: in particular. What's the one that you think is like
• 29:10
  Speaker 1: most illustrative of how it has changed sports and sports reporting?
• 29:15
  Speaker 2: The John Tate Porter scandal.
• 29:17
  Speaker 1: This is Danny, who just had that book come out
• 29:19
  Speaker 1: about sports betting.
• 29:20
  Speaker 7: So this was, I wouldn't blame you for having no
• 29:22
  Speaker 7: idea who that was, even when he was playing. A
• 29:25
  Speaker 7: no-name bench player on the Toronto Raptors who was making
• 29:29
  Speaker 7: the league minimum. He had developed gambling debts for sports
• 29:34
  Speaker 7: and other things. And these guys, gamblers, caught wind of
• 29:37
  Speaker 7: that and they essentially extorted him. So he would say,
• 29:40
  Speaker 7: I'm going to fake injuries and remove myself from games.
• 29:44
  Speaker 7: And that way, if you've taken the under on all
• 29:46
  Speaker 7: of these props on my performance, those bets are guaranteed
• 29:49
  Speaker 7: to hit and we'll make a lot of money together.
• 29:51
  Speaker 7: And he was caught and convicted of colluding with gamblers
• 29:56
  Speaker 7: to fix his player props and The fact that you
• 30:00
  Speaker 7: could bet millions of dollars on Jaunte Porter's stats in
• 30:04
  Speaker 7: a random game in the middle of March is a
• 30:07
  Speaker 7: total creation of this online legal betting era. It doesn't
• 30:11
  Speaker 7: take a genius to realize it'd be so tempting to
• 30:14
  Speaker 7: fix that.
• 30:15
  Speaker 1: Like that wasn't happening in the shadows before? Absolutely not.
• 30:18
  Speaker 1: And how much money did they end up making in
• 30:20
  Speaker 1: the scandal?
• 30:20
  Speaker 7: I saw a bet slip for more than a million
• 30:22
  Speaker 7: bucks on just one bet.
• 30:24
  Speaker 1: And he made money too?
• 30:25
  Speaker 2: Yeah, but then he got convicted.
• 30:26
  Speaker 1: The list of cheating schemes goes on and on In
• 30:30
  Speaker 1: fall of last year, two Cleveland Guardians pitchers were indicted
• 30:33
  Speaker 1: for rigging bets by throwing specific pitches to help gamblers.
• 30:37
  Speaker 1: Three former college basketball players at the University at Buffalo
• 30:40
  Speaker 1: were just charged with cheating. It's alleged they were purposely
• 30:43
  Speaker 1: underperforming in games, scoring fewer points, landing fewer rebounds, so
• 30:48
  Speaker 1: that people they were in cahoots with could win the under.
• 30:51
  Speaker 1: Dodgers pitcher Shohei Otani's interpreter is in prison now for
• 30:54
  Speaker 1: stealing $ 17 million from him to pay off gambling debts.
• 30:58
  Speaker 1: June says he feels for a lot of the athletes.
• 31:00
  Speaker 1: How have you seen this affect athletes? Oh, it's so bad.
• 31:03
  Speaker 1: It is so bad.
• 31:04
  Speaker 3: I mean, I've gotten screenshots of DMs that athletes will get. Basically, like,
• 31:08
  Speaker 3: regardless of what you do on the field now or
• 31:10
  Speaker 3: the court, you're getting someone angry at you on social media.
• 31:14
  Speaker 1: Because someone has a bet in some direction.
• 31:16
  Speaker 5: Right.
• 31:16
  Speaker 3: So even if you perform well, people are going to
• 31:18
  Speaker 3: be pissed at you in some capacity. I mean, I've
• 31:21
  Speaker 3: had some athletes tell me kind of anonymously, like on background...
• 31:26
  Speaker 3: It kind of takes away some of the joy of
• 31:27
  Speaker 3: playing sports because you do well and people are still
• 31:31
  Speaker 3: mad at you. People aren't cheering for you on the
• 31:34
  Speaker 3: basis of your team in the same way anymore. Like, oh,
• 31:37
  Speaker 3: he pitched well, he helped my team win. It's like, well,
• 31:39
  Speaker 3: he pitched well and he helped me lose my bet.
• 31:41
  Speaker 3: I'm going to curse out your girlfriend and call your
• 31:44
  Speaker 3: girlfriend ugly. Or people are threatening their kids and families.
• 31:48
  Speaker 3: People have had to call the police and get restraining orders.
• 31:52
  Speaker 1: And what are the rules? I just remember growing up,
• 31:54
  Speaker 1: to gamble, you had to go to Vegas, Atlantic City,
• 32:01
  Speaker 1: or a reservation. And now you just need phone.
• 32:03
  Speaker 2: Yeah.
• 32:04
  Speaker 1: How did that change?
• 32:06
  Speaker 7: The surface level answer is a 2018 Supreme Court decision.
• 32:11
  Speaker 1: Denny's talking about Murphy v. National Collegiate Athletic Association, a
• 32:15
  Speaker 1: 2018 Supreme Court case where the state of New Jersey
• 32:17
  Speaker 1: sought to strike down a federal law from 1992. that
• 32:20
  Speaker 1: prevented sports gambling from taking place in all but four states, Nevada, Delaware, Oregon,
• 32:26
  Speaker 1: and Montana. Jersey wanted in on the action too. And
• 32:29
  Speaker 1: the court sided with New Jersey. It did away with
• 32:31
  Speaker 1: the old restriction federally, unleashing sports betting across the country.
• 32:35
  Speaker 7: I would say the thing that's more influential was four
• 32:38
  Speaker 7: years before that, Adam Silver, the commissioner of the NBA,
• 32:42
  Speaker 7: wrote an op-ed in the New York Times that came
• 32:44
  Speaker 7: out in favor of legalization. And it was like a
• 32:47
  Speaker 7: seismic event just because all of the other commissioners, including
• 32:51
  Speaker 7: his predecessor and mentor, David Stern, had been so anti-gambling,
• 32:56
  Speaker 7: calling it an evil and an existential threat and the
• 32:59
  Speaker 7: deadliest possible thing that could happen to sports. That's something
• 33:02
  Speaker 7: Bud Selig of Major League Baseball said right around then.
• 33:05
  Speaker 7: And so when Adam Silver broke from that tradition and
• 33:08
  Speaker 7: said this should be regulated, it set in motion a
• 33:12
  Speaker 7: lot behind the scenes to convince the other leagues that
• 33:15
  Speaker 7: they should embrace gambling. The NBA and the other leagues
• 33:18
  Speaker 7: claim that legalizing gambling is good for the integrity of
• 33:22
  Speaker 7: sports because it allows them to monitor betting activity, specifically
• 33:26
  Speaker 7: about catching illegal betting. You know, if it's happening in
• 33:28
  Speaker 7: the black market, maybe it's harder to see betting trends,
• 33:32
  Speaker 7: whereas legal sports books, we can look at that information
• 33:35
  Speaker 7: in real time and say, oh, something strange is happening
• 33:38
  Speaker 7: in this game.
• 33:38
  Speaker 2: Let's investigate that or stop taking bets on it.
• 33:42
  Speaker 7: Part of the problem, you know, with that argument of like,
• 33:44
  Speaker 7: we're going to catch all this stuff now.
• 33:45
  Speaker 2: Is The black market still exists.
• 33:48
  Speaker 7: There's still tens of billions wagered through offshore sites and
• 33:52
  Speaker 7: street bookies and stuff.
• 33:54
  Speaker 1: June has an interesting perspective on all this. He was
• 33:57
  Speaker 1: laid off from ESPN in 2023. For two years, he
• 34:00
  Speaker 1: couldn't work in sports reporting because of a non-compete. And
• 34:03
  Speaker 1: he says being out of the game for that stretch,
• 34:05
  Speaker 1: and specifically outside of the big networks, he was able
• 34:08
  Speaker 1: to see the way gambling and the network's deals with
• 34:12
  Speaker 1: betting companies, ESPN, for instance, has a big partnership with DraftKings,
• 34:15
  Speaker 1: was warping their coverage.
• 34:17
  Speaker 2: The thing that.
• 34:18
  Speaker 3: Sports media is predictive of that I think is going
• 34:20
  Speaker 3: to happen in news media if things kind of continue
• 34:24
  Speaker 3: to head down this path is how much of sports
• 34:28
  Speaker 3: media now frames conversations solely through the lens of gambling odds.
• 34:35
  Speaker 3: In the past, people would talk about sports through the
• 34:38
  Speaker 3: lens of like, The human stories and this team overcame X, Y,
• 34:43
  Speaker 3: Z in order to get here. And, you know, we
• 34:45
  Speaker 3: see this in the Olympics every year, like this skier
• 34:48
  Speaker 3: has a grandparent with cancer that's going to motivate them
• 34:52
  Speaker 3: to go for gold.
• 34:53
  Speaker 1: Cue Rocky music.
• 34:54
  Speaker 5: Right.
• 34:54
  Speaker 3: Yeah, exactly. But I think what's changed about sports coverage
• 34:58
  Speaker 3: in particular has been segments completely framed around gold. Who's
• 35:03
  Speaker 3: favorite and who's not? What are the odds of this
• 35:05
  Speaker 3: team winning, this team losing? It's become central to the
• 35:09
  Speaker 3: way that sports media works. Because of the amount of
• 35:14
  Speaker 3: sports gambling sponsorships that exist in the industry, most people
• 35:18
  Speaker 3: cannot talk frankly or report frankly about how gambling is
• 35:22
  Speaker 3: changing sports. You look at the way that sports media
• 35:25
  Speaker 3: covered gambling scandals in the past. Specifically, I would look
• 35:29
  Speaker 3: at the Tindani scandal in the 2000s where an NBA
• 35:31
  Speaker 3: referee was caught fixing games. It became a major national
• 35:35
  Speaker 3: news story covered across, you know, the major news programs
• 35:39
  Speaker 3: and ESPN. And those stories aren't getting the same coverage
• 35:43
  Speaker 3: today in terms of like the intensity of the reporting
• 35:46
  Speaker 3: and just the quantity of reporting. And part of it
• 35:48
  Speaker 3: is these leagues and companies are partnered with these gambling outlets.
• 35:52
  Speaker 3: And I've heard personal testimony, you know, on background. You know, friends,
• 35:57
  Speaker 3: whatever in the industry is saying, like, I can't report
• 36:00
  Speaker 3: on this topic because it might affect literally my paycheck
• 36:05
  Speaker 3: and my job security. And they feel like they can't
• 36:08
  Speaker 3: report in the same way that they might have 10,
• 36:10
  Speaker 3: 15 years ago. People don't get emotionally invested in their
• 36:25
  Speaker 3: favorite teams anymore or their favorite players in the same way.
• 36:28
  Speaker 3: Sometimes people will bet on their favorite team to lose
• 36:32
  Speaker 3: so they can make money off their team losing. And
• 36:34
  Speaker 3: if it's like, okay, well, if they lose, I make money.
• 36:36
  Speaker 3: If they win, I'm happy. They're literally pricing how much
• 36:39
  Speaker 3: they're willing to lose in order to be happy.
• 36:40
  Speaker 5: I need to tell you something that's probably going to
• 36:43
  Speaker 5: make your ears steam. So I went to this Kelshi
• 36:47
  Speaker 5: research conference on Friday and they were like presenting all
• 36:50
  Speaker 5: of these like super financialized use cases for Kelshi. And
• 36:54
  Speaker 5: one of the presentations was from this guy whose business
• 36:58
  Speaker 5: is sports insurance. And he uses the prediction market contracts
• 37:04
  Speaker 5: to hedge. And so he was like, for example, like
• 37:07
  Speaker 5: a college team, if like they win the championship, have
• 37:11
  Speaker 5: to pay their coach a bonus. So the team will
• 37:14
  Speaker 5: bet against itself to hedge against the financial downside of
• 37:18
  Speaker 5: paying the coach a bonus.
• 37:28
  Speaker 1: Have you always been a sports fan, like your whole life?
• 37:31
  Speaker 2: Oh, totally.
• 37:31
  Speaker 5: Yeah.
• 37:31
  Speaker 3: I mean, it's I moved to the United States when
• 37:33
  Speaker 3: I was two months old, grew up in Boston in
• 37:36
  Speaker 3: the 2000s and became a part of the most obnoxious
• 37:39
  Speaker 3: generation of sports fans ever. it was like impossible to
• 37:41
  Speaker 3: not become a sports fan. And for me, it was
• 37:43
  Speaker 3: like the way I made friends at school, like especially
• 37:46
  Speaker 3: growing up in like a culturally Korean home, like it
• 37:48
  Speaker 3: was the way I was able to talk to people
• 37:51
  Speaker 3: and have.
• 37:51
  Speaker 1: Things to talk about.
• 37:53
  Speaker 3: Like one of the reasons why I love sports is
• 37:55
  Speaker 3: that in theory, like, It's totally emotionally irrational to get
• 38:00
  Speaker 3: invested in all of this, but you get caught up
• 38:02
  Speaker 3: by the stories of these athletes. For me, I think
• 38:06
  Speaker 3: the biggest example of this is 2013. After the Boston
• 38:08
  Speaker 3: Marathon bombings, the Red Sox won the World Series that
• 38:11
  Speaker 3: year with a team that probably, on paper, was not
• 38:15
  Speaker 3: good enough to win a World Series. But there was
• 38:16
  Speaker 3: something that happened. that entire season, everyone was just like
• 38:20
  Speaker 3: working for something bigger than just their own individual stats.
• 38:23
  Speaker 3: They were trying to like kind of uplift the city
• 38:25
  Speaker 3: and like really felt like Boston kind of came together
• 38:28
  Speaker 3: in this like special way. And I think that when
• 38:32
  Speaker 3: people put such a definitive like financial stake into something,
• 38:37
  Speaker 3: I think you lose that like ineffable quality of being
• 38:42
  Speaker 3: emotionally invested in something and caring about something without having
• 38:45
  Speaker 3: to make money off of it.
• 38:48
  Speaker 5: Yeah.
• 38:48
  Speaker 3: I have some, some nephews that are like in high
• 38:50
  Speaker 3: school age and I've had some conversations with some, you know,
• 38:53
  Speaker 3: I'm 30 years old, some younger men. And one of
• 38:56
  Speaker 3: the consistent themes is that it's often tied to their
• 38:58
  Speaker 3: like ideas of masculinity. Like I talked to someone who's
• 39:01
  Speaker 3: a truck driver out in long Island. And the way
• 39:04
  Speaker 3: that he thought about it was just like, I know sports.
• 39:06
  Speaker 3: I know more about sports than the average person. This
• 39:09
  Speaker 3: is a way for me to provide. And eventually he
• 39:10
  Speaker 3: kind of got to a point where he was pulling
• 39:12
  Speaker 3: out money out of his 401k and to pay back
• 39:16
  Speaker 3: the money that he was losing on sports betting. And
• 39:18
  Speaker 3: so people feel as if like they're not enough and
• 39:22
  Speaker 3: that money is directly tied to their masculinity. And there's
• 39:25
  Speaker 3: all this like identity stuff that I think is tied
• 39:27
  Speaker 3: up into what making money off of sports betting almost represents.
• 39:31
  Speaker 4: It's so adjacent to this idea that you, like, see
• 39:33
  Speaker 4: circulated in the manosphere of, like, escaping the Matrix.
• 39:35
  Speaker 2: Exactly.
• 39:36
  Speaker 1: It's like, every day it gets harder and harder and
• 39:38
  Speaker 1: harder to.
• 39:38
  Speaker 4: Live in America, and, like, it's sort of positioned by
• 39:41
  Speaker 4: these prominent influencers as a scam, living a normal life,
• 39:44
  Speaker 4: having a 9-to-5 as a scam. You're being used.
• 39:47
  Speaker 2: You're a sucker.
• 39:48
  Speaker 1: You're a sucker, and.
• 39:50
  Speaker 4: If you just gamble right, you can get out of
• 39:51
  Speaker 4: it quickly. You can get out of the matrix.
• 39:53
  Speaker 3: I think that's 100% spot on. I think it's very
• 39:55
  Speaker 3: much tied to the rise of this manosphere.
• 39:57
  Speaker 7: Also, I mean, financial desperation isn't necessarily delusional. There's good
• 40:02
  Speaker 7: reason to feel trapped and you'll never buy a house
• 40:05
  Speaker 7: or pay off your student loans. And so I think
• 40:08
  Speaker 7: a lot of this get-rich-quick gambling appeals to that. It's
• 40:12
  Speaker 7: why I was kind of blown away when Tarek Mansour,
• 40:16
  Speaker 7: the CEO of Kalshi, they were doing this March Madness
• 40:19
  Speaker 7: promotion where you'd win a billion dollars if you got
• 40:22
  Speaker 7: every pick right, which has never happened. The odds are
• 40:24
  Speaker 7: like one in a quintillion or something.
• 40:27
  Speaker 1: Very important fact check here. The odds of this are
• 40:30
  Speaker 1: actually one in 9.2 quintillion.
• 40:33
  Speaker 2: It's truly astronomical.
• 40:35
  Speaker 7: And he was like, in his tweet about it, he
• 40:38
  Speaker 7: was like, this will provide generational wealth for your family.
• 40:42
  Speaker 2: You owe it to your grandchildren.
• 40:43
  Speaker 5: It's so bonkers because like, Regular people don't make money
• 40:47
  Speaker 5: at this. It is not a good invest. It's a
• 40:50
  Speaker 5: terrible investment strategy. There are people making money in prediction
• 40:54
  Speaker 5: markets right now, but they're almost exclusively professional finance people.
• 40:59
  Speaker 5: There are quant traders diving in and looking for arbitrage opportunities.
• 41:04
  Speaker 5: And there are straight up financial institutions participating in these markets.
• 41:09
  Speaker 5: And so your average, they call them click traders. don't
• 41:14
  Speaker 5: stand a chance really. And so to hear that people
• 41:17
  Speaker 5: are being lured in with this promise of providing for
• 41:20
  Speaker 5: their families and then they're going up against like Wall
• 41:24
  Speaker 5: Street wizards, they don't stand a chance. One of the
• 41:29
  Speaker 5: reasons why I felt like so strongly like I had
• 41:31
  Speaker 5: to cover this as someone who covers like the future
• 41:34
  Speaker 5: and where things are going and like changes in behaviors
• 41:37
  Speaker 5: is because I don't see this train stopping anytime soon.
• 41:42
  Speaker 2: A lot of people think that.
• 41:43
  Speaker 5: We are truly moving towards a world in which we
• 41:46
  Speaker 5: can place wagers on the outcome of anything. And there's
• 41:52
  Speaker 5: clearly an appetite for moving in that direction. We are
• 41:56
  Speaker 5: moving towards the space where wagering on literally every aspect
• 42:02
  Speaker 5: of our lives is mainstreamed.
• 42:07
  Speaker 1: We're now entering a world where it's not crazy to
• 42:09
  Speaker 1: wonder if every politician is acting like a cheating basketball
• 42:13
  Speaker 1: player or every judge a scheming ref.
• 42:16
  Speaker 3: I think that's kind of the central issue for a
• 42:17
  Speaker 3: lot of these sports leagues right now is that for fans,
• 42:20
  Speaker 3: like the whole point of carrying out sports is like
• 42:22
  Speaker 3: you believe that this is real competition. It's not, you know,
• 42:25
  Speaker 3: WWE wrestling where the results are predetermined.
• 42:28
  Speaker 1: And then when you have real scandals like you're talking
• 42:30
  Speaker 1: about where athletes are sitting out early or shaving points.
• 42:34
  Speaker 3: And it makes people doubt all the big controversial moments
• 42:37
  Speaker 3: of any game. Like a referee makes a bad call
• 42:39
  Speaker 3: and now you're instead of having a fun debate about it,
• 42:41
  Speaker 3: you're asking the question, was this fixed? And I think
• 42:44
  Speaker 3: the way that this ties actually back to politics in
• 42:46
  Speaker 3: some ways is like sports ostensibly doesn't change the direction
• 42:50
  Speaker 3: in the future of the.
• 42:51
  Speaker 2: World, right?
• 42:52
  Speaker 3: But if there's this level of corruption within sports, people
• 42:56
  Speaker 3: perceive that level of corruption in things that actually do
• 42:59
  Speaker 3: change the course of the world. You have only more
• 43:02
  Speaker 3: reason to be cynical about the stuff that actually does
• 43:04
  Speaker 3: change people's lives, whether it's.
• 43:06
  Speaker 1: Elections, tax codes, all that other stuff. All right, it's
• 43:13
  Speaker 1: 10 o'clock, 10.05. Rachel Maddow's done?
• 43:16
  Speaker 4: I think so, based on it's an hour-long show, isn't it?
• 43:18
  Speaker 1: Okay, so how do I check this? All right, let's go, Ruth.
• 43:23
  Speaker 2: Are you going to donate your winnings to charity?
• 43:25
  Speaker 1: Sure. Thanks for holding me accountable. How do I tell
• 43:30
  Speaker 1: what happened here?
• 43:31
  Speaker 3: Oh, it seems like it just closed.
• 43:32
  Speaker 1: Oh, no contracts available now. Okay. This is complicated. Oh, no.
• 43:38
  Speaker 3: It's treating it like a stock, basically.
• 43:40
  Speaker 4: I think you lost.
• 43:40
  Speaker 3: Yeah.
• 43:41
  Speaker 2: I think you lost.
• 43:42
  Speaker 1: She didn't say insider. So if we'd gone with Cuba, election, Hormuz,
• 43:47
  Speaker 1: we would have won.
• 43:47
  Speaker 5: Yeah.
• 43:49
  Speaker 1: Damn. I don't know what to make of this loss.
• 43:51
  Speaker 1: It's kind of anticlimactic. What did we learn?
• 43:55
  Speaker 4: That sure felt like gambling.
• 43:57
  Speaker 5: This sounds like loser talk, though, guys.
• 44:01
  Speaker 1: Fair enough.
• 44:02
  Speaker 5: We were not equipped to win that. There are people
• 44:05
  Speaker 5: who have these, like, transcription services that try to get
• 44:09
  Speaker 5: the show like milliseconds before it airs and like do
• 44:13
  Speaker 5: probability analysis based on Maddow's previous episodes.
• 44:17
  Speaker 1: There are people who actually do that?
• 44:18
  Speaker 3: Yeah.
• 44:19
  Speaker 5: You're going against them.
• 44:20
  Speaker 1: Oh, I didn't know there were like professionals working this
• 44:23
  Speaker 1: bet about Rachel Maddow. I thought this was like some
• 44:25
  Speaker 1: random thing. This is somebody's like job?
• 44:30
  Speaker 2: Yeah.
• 44:30
  Speaker 5: I mean, people have quit their jobs to do mention
• 44:32
  Speaker 5: markets full time. I don't think you should do that.
• 44:41
  Speaker 1: Noted. Fair enough. Fair enough. Thank you guys. Seriously. This
• 44:45
  Speaker 1: is a pleasure. Thanks again to Danny Funt, June Lee,
• 44:53
  Speaker 1: and Kate Nibbs. Denny's book is Everybody Loses, The Tumultuous
• 44:57
  Speaker 1: Rise of American Sports Gambling. June publishes independent sports journalism.
• 45:02
  Speaker 1: No money from the gambling companies over on his YouTube channel.
• 45:05
  Speaker 1: I am June Lee. That's I am J-O-O-N-L-E-E. And Kate
• 45:11
  Speaker 1: writes at Wire, where she recently dug into the very
• 45:14
  Speaker 1: timely question of how to file taxes on prediction market wins.
• 45:17
  Speaker 1: I also want to mention we reached out to a
• 45:20
  Speaker 1: bunch of outlets who've partnered with prediction markets. The AP,
• 45:23
  Speaker 1: the Wall Street Journal, and Fox didn't respond to our questions.
• 45:27
  Speaker 1: Representatives for CNBC and CNN both told us that their
• 45:30
  Speaker 1: Kalshi deals have no impact on their editorial independence, that
• 45:33
  Speaker 1: the companies disclose the relationships with Kalshi to their audiences,
• 45:37
  Speaker 1: and that they have rules in place to avoid conflicts
• 45:39
  Speaker 1: of interest, like not allowing journalists to make trades in
• 45:42
  Speaker 1: the prediction markets. They did not tell us the details
• 45:45
  Speaker 1: of their agreements with Kalshi. Polymarket didn't respond to us.
• 45:48
  Speaker 1: We're going to share all of Kalshi's response to our
• 45:50
  Speaker 1: questions on our newsletter, questioneverything.substack.com. Go subscribe. Thanks as always
• 45:57
  Speaker 1: to Bibber & Bell Wine Shop in Brooklyn for letting
• 45:58
  Speaker 1: us take over their space. Please tell your friends about
• 46:01
  Speaker 1: our show, share this episode with them, and rate and
• 46:03
  Speaker 1: review us. Today's show was produced by Sam Egan and
• 46:06
  Speaker 1: Brendan Baker. It was edited by Jen Kinney. Robin Semien
• 46:09
  Speaker 1: and I are the executive producers of Question Everything. Our
• 46:12
  Speaker 1: team also includes managing editor Kevin Sullivan, producers Sophie Casis
• 46:15
  Speaker 1: and Zach St. Louis, contributing editor Neil Drumming, and associate
• 46:18
  Speaker 1: producer Kevin Shepard. This episode was fact-checked by Annika Robbins,
• 46:22
  Speaker 1: mixing and sound design by Brendan Baker. Our music is
• 46:25
  Speaker 1: by Matt McGinley. Sound engineering by Gabe Kiroga. If you
• 46:28
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• 46:31
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• 46:43
  Speaker 1: See you next time.