Can sports betting overthrow Iran?

Hey, it's Cindy Crichton, and this is the risk-giving podcast by Lux Capital. Well, it's January, and even though we aren't supposed to be sponsored by anyone, it does feel opportune to act like we are sponsored by a sports betting company. After all, they seem to be completely unavoidable in the present moment, as the alcohol companies pull back in a lame attempt to undue dry January. Sports betting is larger than ever, with nearly a majority of American men holding accounts. But as betting turns to politics and culture, can it capture the same experience? I'm turning to Dustin Galker on this one. He's the author of the closing line, and the event horizon newsletters, covering prediction markets and the sports betting landscape. We talk about why prediction markets remain a small sliver of betting, how new underwriting models are taking market share from incumbents, the interface between betting and parametric insurance, because why not? Why sports will always dominate the industry, help perform activities increasingly interacting with international relations? Whether betting markets can be optimized for propaganda value, let's dive in. Dustin, thanks so much for joining us. Cheers. Thanks for having me on. Dustin, you covered the prediction markets for a very, very long time. You have a couple newsletters, the closing line, event horizon. You write about the subject a lot, and I can't think of a particular theme outside of artificial intelligence, which quite frankly does dominate everything. When you pull out artificial intelligence, you pull back into other aspects of tech and finance, prediction markets seem to be everywhere, and they seem to be going from a transition where they were very niche maybe two, three years ago, very, very close to tech and very tech-literate audiences to a little bit more of this broader gambling market, young people, men in particular, maybe. This year, it really seems like they're poised to break out and become a nationwide phenomenon. I'm saying that my parents are going to be using every retirement village that's going to give out a big no-night and go to a polymarket bet on the future of Iran or whatever the case may be. I'm just curious at the beginning of 2026, you've been covering this for such a long time. What are you seeing? What are your predictions going ahead in 2026 and what's changing in the market? The big thing I think is the information side of things is that's what the big idea of prediction markets is that trading and people trading on information, that's the thought behind it. It's not the gambling part. It's not the sports part. That's the point that's where I come at it from a lot, but people believe in this as a disseminator of information. And honestly, I believe them a lot of times when I see that. I always come back to Intercontinental Exchange, the owner of New York Stock Exchange, said, "We don't care about the sports stuff. What we care about is the information that we are going to glean from the rise of prediction markets and disseminating that to their partners. So I take them at their word that they really see this big picture and the people who are behind polymarket and calcium also believe that. They believe this might be a means to the end in the short term, but in the long term, this value of information and what we learn from it is super valuable. And I'm not here to argue with that. I think that's one of the themes that we're really going to see driven home this year and into the future is what's the value of that information? Where else does this go? It also, of course, creates some controversy around insider trading and whether we actually need to be able to trade on XYZ markets, but that information, the one I always go to is federal government shutdown. It was hard to place probabilities on whether the government would shut down, right? So we got that from prediction markets. Is the government going to shut down? The trader saw it would and that obviously happened. It's obviously just giving us probabilities, but then how long will the government shut down go here in the United States? We were able to price that in real time in a way I don't think it was really possible other than you and me and other expert spitballing and on a bunch of information that we have in our heads, and so it's super interesting, I think, that information piece is what's going to be interesting moving forward. One of the questions I have in this market, it's been on my, like, edit list for a very, very long time, is you go back to the early to mid-2000s and there was this goal of crowdsourcing knowledge and the power of the people and the idea of it's not experts, I'm thinking of folks like Philip Tetlock who showed that expertise, you know, if you ask experts about political events, they're not just wrong, they're like consistently wrong. If all the experts say X, you should just bet against that, you'll almost certainly make money. In prediction markets, actually sort of form out of this. There's some start-ups that started the late 2000s, early 2010s, and it sort of peeders out. It doesn't go anywhere. There's kind of no company that, at least that I know of, that's from that early generation of prediction markets, and then you have now, you know, Polymarket, Calcium, others that sort of came out in the last couple of years and it seemed to have done extremely well. And I don't know if you have an opinion on this or if you focused on it, but I'm curious like why success today, when, at least, I mean, even theoretically prediction markets have been around truly decades, even if the experiments were only two decades ago. Yeah. I mean, I'll start, like I started coming into prediction markets along with predicted, right? That was my first time. I really intersected with it back, you know, several election cycles ago. You could bet on elections and the presidency and, you know, down ballot races and, you know, they've been around for a while and then, you know, Polymarket, Calcium kind of have been growing up sort of in parallel, but differently. Polymarket, you know, obviously, I think grew and tapped into something from a crypto standpoint, right? This is all unchained. This is crypto native and, you know, you know, it's international. Queen, Queen, it's not in the United States. You can obviously trade on polymarket international if you have a VPN and crypto, that's not impossible to do. But, you know, they tapped into that, like everybody doing it on crypto and, you know, crowdsourcing information. Crypt, what's happening on polymarket, at least internationally, a ton of all this other stuff. These valuable information markets about world events and financial events, but there's a lot of sports trading too, but it's not just that. It's a lot of this other stuff, you know, and Calcium, you know, found in 2018, but didn't really launch till much later, wasn't doing a whole lot, was doing a little election betting, started fighting the CFTC under the Biden administration to allow election betting, winning court, 2024, they start blowing up, you know, hundreds of millions getting bet on the election and the Harris, Harris Trump, and then roll around into 2000 early to last year, sports betting rolls around, and this is, you know, it's been, that's been most of what's happened at Calcium. A lot of people talk about the other stuff, but 90% of the volume at Calcium is sports event contracts between football, basketball, football, you name it, all of those things. Everything else has been really kind of diminimous. I mean, there's still tens of millions, hundreds of millions being, but being traded on this stuff, but it's dwarfed, absolutely dwarfed by all the sports stuff, which is, you know, arguably just feeding into liquidity, giving them retail, which is, you know, to the end goal of, let's get to trading on it, all this other stuff is in from this interesting information and making that the product rather than, you know, you and me betting on sports on an exchange. Like, that's where, that's sort of where their growth has come from. And now we're at a point where there's all these other players and it'll be fascinating to see what happens in this. Like, there's tons of tons of crypto projects, there's sort of the blending of on chain and off chain, like Calcium is trying to do, there's just going to be a lot to happen in 2026 about where all this is headed and how, how ubiquitous it will be as you say. Well, I mean, particularly with sports betting, I mean, they're going up against these central lies, the trading houses, the thing of fan dual, draft kings, et cetera, where, you know, they are the market mega, they are the, the book, if you will, they're the one setting up the contracts. These are more decentralized. They are trying to create marketplaces where you can bet against each other. They're taking sort of their piece off the top there. Do you see any movement among people in terms of understanding, you know, the market structures that these and what it implicates for their own bets? I do people like a certain model versus another or more traditional models like a fan dual of draft kings, more understandable, amenable people who are, I get it, I'm working with this company. They're going to give me odds. I'm just spending a lottery ticket, essentially, versus against other people. Yeah. On the sports betting side, it's interesting because I come from that background, I came, you know, I kind of grew up, but I, I covered the rise of legal sports betting here in the United States right over the past 10 years. And before that daily fantasy sports, which is how draft kings and Vandal got big, you know, like, there's a long way to go before the experience at a prediction market is replicated, like, what is in a legal and regulated sports book in terms of product offering and breath the vods and liquidity, like again, draft kings and Vandal are the house, right? They don't have to back all this by fiat, which is how it happens on exchanges, like a trade has to be backed on both sides by cash. Draft kings and Vandal are sitting on, you know, billions of dollars to resolve every bet. They know how much they're going to hold. They'll pay you if they win, but they're not like every trade is every bet you make is not backed in fiat. So, you know, that's where it's, you know, that's where it's really interesting is that this product class of sports books and being disrupted by prediction markets and what's available. It's really interesting to see how that's going to change. Like, how she has obviously softly moved toward, like, replicating the sports betting experience. There's a six box that we know well and in sports betting that has here's the spread. Here's the money line. Here's the total for both teams just little little six little squares that it captures most of the betting. You can do that at most prediction markets now from the people standpoint for sports betting. It's about been met at retail users, right? Like the average person wants some odd boosts. They don't really care about. They're not price sensitive. They just want a good experience. They want, if they were watching the game the night, they want to bet on it. And whoever gives them the best experience overall, that's who's getting it. They have 70, 80% of market share, depending on what you're talking about. So Fikalshi and Polymarket and the other prediction markets are not that yet. They have not replicated that. It's really cool for live trading, but it's also just not intuitive. It's not the same product, not offering these bonuses and odds boosts and other things that you get and people have come to expect from sports betting. So I think whoever, like, kind of replicates that, at least on the sports betting side, is going to win, at least in the short term, short to medium term. And it'll be interesting to see how that product goes. Polymarket in the US, their CFTC regulated thing is basically just sports. It's just trade on who's going to win a game. That's it. It'll grow from there. But right now, it's that. And how much they grow into the sports betting and how much they can convert people to those other things that we were talking about earlier that they really care about in the long tail. So when I think about sports betting, I think there's a lot of complexity these days. It's not just who wins, who loses. People are betting on all kinds of individual things scores before half time, which players are up or down or whose scores touchdowns. People are doing part lays with very complicated math, none of which are really amenable or at least easily amenable to a prediction market, where you do need multiple sides and someone to actually, you know, there has to be sort of a complete cohesive set of outcomes that you're sort of betting on. And people pick and choose which ones they want to actually bet. To what degree do people make those sort of more complex bets? Are most people just going into these games and saying, you know, I want my team to win or buy a certain point value or do people actually, you know, or the most valuable people go and do some of those more complicated sets where Calcium Polymarker would be a little bit more challenged off of a product there. Before the rise of online sports betting, say the last, you know, especially in the regulated space here in the United States, it was pregame, right? Like you go to the sports book, you'd bet on a game, who wins, point spread, a total, whatever. And that was it. You're kind of done. You're like, you know, I bought my ticket and I watched the game and cool. This is fun. But the as online sports betting has grown, especially here in the United States and with the competitiveness of the market here, like a lot of betting is live and a lot of betting is parlays. These, these are the dominant ways to bet on sports books right now. It is betting live on everything under the sun, props, spreads, money lines, totals, all of these things. And you can place parlays in real time too, if you're doing it like with while games are going on. Fandals again, been the example of leaning into this most. The way of structural hold the United States was something like seven percent of wagers when it was mostly just in Nevada. Fandals can hold up to 15 percent of all wagers now. And most of that is because of a little bit of higher vague on live betting and the fact that they're so good at offering parlays and letting people bet parlays and, you know, selling the idea and the dream of winning a lottery ticket, which is what parlays are. It's not, there's not a whole lot of people like you are analytically minding like, I'm going to go crush this parlay by doing, and it's really hard to do correlated outcomes in a sportsbooks because they're not going to let you do them. But so people are like, I'm going to put 10 things into a parlay for a buck and hope I win a few thousand, they're going to lose almost all of the time. And that's how Fandals and the sportsbooks make their money, right? Because they're like, that they sell, they're selling the lottery ticket. That's, that's again, the dominant form of, of betting in, in U.S. right now. And couchie to its credit has replicated that to some extent, like it's still not most of their trading. It's still pretty small in the grand scheme of things, but you can parlay a lot of things on, on couchie where I think people were dismissive of that even, you know, six to nine months ago. And now it's a, you know, a core part of their, their product offering. So everybody who, everybody needs to figure that out, right? How do I, how do we do this? How do we, you know, stand up markets behind parlay's and, and couchie's obviously figured that out and has liquidity behind, behind the parlay's. So it's not, you know, it's not a problem that it's not solvable. I think that prediction markets can definitely get there and get to product equity, I think, in terms of parlay's and it already is in live betting. It's a live betting thing. Like so much of what's happening on couchie is trading during a game, not trading, but there is trading before, but so much is trading in an opposition. And again, that's where couchie and polished couchie is actually makes money, they're making money on fees when you trade. They don't care if you win or lose, they just want you trading and paying them their fees. Now, when we go from sports and to politics and to culture society, we were recording this right after the golden globes, you know, people were betting on, it was actually not that interesting because I think most of the categories were fairly predictable. And I'm not sure there was a lot of interesting trades going on, but obviously it was in the news. There were a lot of bets. You can sort of predict things. I'm curious, these seem to actually make a huge amount of influence, or at least in my world, you know, probably market to sign this a partnership agreement with Dow Jones, you know, in our Wall Street Journal, barons, a bunch of other products, presumably they're going to start to include some of that betting, some of those tickers and predictions straight into articles. And you can imagine that included in other formats, other places all around the media. You know, how does that interact with the sports? Is that just, you know, here's another vertical. This is great. This is another opportunity to bet. Or is there something deeper there that I'm not saying? It'll be fascinating to see what else happens, like going back to the politics and everything else. Bloomberg, Bloomberg Terminal has added a bunch of functionality of ingesting and then putting back out polymarket and calcium data, which was a fascinating data point, right? The fact that they're, they are doing this Bloomberg, like people were talking about, oh, who's going to create the Bloomberg of the terminal of fiction markets? But it's, by the way, it's going to be Bloomberg. It's going to be Bloomberg. It gets, like, there's still a ways to do it that are going to be free and more accessible, but it's Bloomberg. Bloomberg wins. But I don't know if it, the sports betting part of it is interesting because like we have it this ingrained world around sports betting and how like the media does it and we'll get a little too in the weeds. But like, the value of a customer in a sports book is way higher than a single customer of the prediction market terms of lifetime value of that customer, right? So there, like a sports book is paying more for a customer acquire a customer or to retain a customer than a prediction market ever will. That's not, that's not going to change. I don't think even with competition. So, like, I don't, like, we're going to see this like on ESPN and all the other networks, arguably not because they're ingrained with the sports betting industry, right? They, like, like that, like, it's, you know, they're, I'm not saying it could never happen, like there's, there's reasons why the sports ecosystem is not necessarily going to jump into this. Now, obviously we saw the NHL do a deal with Kalshi seven figure deals with Kalshi and Polymarket to become their, their marketing partners and official partners, like there's something there, but at, you know, at the same time, like, I just don't see it being adopted in the same way. The value of the data and the information again is everything else. There's not that much different than a prediction market is providing us than a sports book either. They're giving us odds, right? And, you know, arguably Kalshi and Polymarket has a little graph, right, that you can see real time probabilities. That's kind of interesting. It's also not really going to change anything. So it's like, there's no difference. Like the difference with the other stuff is that we have this graph. We have these probabilities for things we've never had probabilities for, right? You know, like, temperature in a place, like you're looking for your, you're looking at weather apps or you're looking to your local meteorologist. Instead, we now have, here's what we say, what traders think the temperature is going to be. How many tornadoes are going to be? Hurricanes, we think they're going to be all those things, like that's, that's the, that, those, that data and those probabilities are the stuff we don't have and the stuff that we'll see. Like, what do we see? A partnership with a weather channel in these? Sure. Why not? Like, again, like, you know, it's another data point of trying to get to stuff. Like, obviously, the weather channel is probably really believes in its meteorologists. And they do a good job predicting the weather. But at the same time, there's another data point that we can use to like validate what we think is going to happen on any given day and then any given season. You know, it's interesting when I hear this because I think of parametric insurance. So this model that's moving in the insurance markets from traditional insurance where you're sort of guaranteed around damage to a parametric model where you say, look, if, you know, winds hit 135 miles an hour for sustained for more than five minutes in your area, you just get to pay out automatically whether there's damage or not. And so this dramatically lowers the cost of administration and lowers the cost of claims adjusted that has to come out and evaluate the damage to your home, whether a hurricane hit your house and it was flood damage or wind damage and, you know, the sound subtle, but this is literally tens and tens and tens of millions of dollars of lawyer fees to go back and forth between insurance companies to figure out who's at fault and who's not. So it's interesting to me to think of like the future will be prediction markets determining your parametric insurance rates of your home. Look, at some point, these become institutional. This is why it's in Bloomberg, but you can imagine hedge funds going like, no, I'll take on some of the the risk burden of a parametric insurance model for South Florida, because I think you're wrong. I have a much more accurate model. In some ways, that to me is like the gold standard of the belief of what prediction markets were all about was to say, like, well, I'm willing to put up real money. And I don't think there's going to be any hurricanes and I have my data. You have your data. And one of us is going to be right. And over's right is going to win and whoever's wrong is going to be out a lot of hurricane damage, you know, insurance payouts. The insurance stuff is definitely interesting. Like, I kind of, I'm skeptical that like average retail, you and me, like me trying to ensure my house is going to do that through a prediction market, right? Like, you know, I definitely could see institutional capital coming in, like, you know, trying to hedge against bad outcomes and hurricanes and things like that. That seems like a pretty likely outcome, honestly. I mean, the real interesting thing that just happened within the like the past couple of weeks was kind of related, but probably market did a deal with an on chain housing site called parcel to start launching friction markets about housing prices. And this is again, real estate is this huge market that the only way to really like for you and me, the only way to do it is buy and selling houses, right? Like we can, I can sell my house or I can, you know, take out a whole neck with a credit or, you know, it's pretty limited how I can do it. If we have markets where you can hedge on the price, the price going up or down over a day, a month, a year, a quarter, I don't know, whatever. And that's where it's headed. Then you have a real way to hedge against like the bad outcomes over your house. Like if we have a housing crisis, I could go hedge on that. Or if you're any company that's exposed to the real estate industry, realtors, builders, contractors, any of these things, like there's a real use case in the real world from an economic standpoint, a hedging standpoint. So like that's another great example of, I'm excited to see what else comes out. That's really in this year and as product is developing and we're getting and everything becomes kind of grows up and becomes more serious. Like what kind of stuff like that is coming out, because that's what, you know, honestly, when I talk about prediction markets, that's the stuff that excites me. But adding this to a lot of domains that don't exist right now to your point. So looking at, you know, today we have like the case shiller index and you can look at housing prices and metros and we have a general sense. But I can see your point of like, there's no hedging market here. There's no ETF to go in and say, look, I think many apples and prices are going to go up 4%. That's my hometown. You know, I, others think it's 10% I can predict against this. I can make money because I'm right. And there's ways of even hedging against a mortgage around that. And so that, that part is actually really interesting to me. I agree with you. I don't think it's a retail play, although a retail folks can certainly be a part of that to me. That is like a money marking, you know, Citadel is going to get into that and a bunch of market makers can get out, go into that business, hedge funds, et cetera. And that's how most of these products end up going. I mean, that's what the stock market is ultimately is a prediction engine on companies, right? So that's not obviously what you talked about. You know, Polymarket, Kalshi, we're looking at sportspinning. These have had huge impacts in here and not just, I think financially you look at the leagues, you look at the, the broadcasters, they are signing massive deals. You're starting to see this as I already mentioned with Polymarket and Dow Jones. I think we'll see more than the cultural, political, sphere, going glows had an inclusion of some betting on screen. That was, I think, a little bit controversial from CBS. But I want to take a step back because, you know, one of the goals with prediction markets was that they were observing these phenomena in the real world and you would get these sort of bets that were sort of, let's call them objective or they were crowdsourced up. But now there's a loop back, which is that actions in the real world can be altered based on what the bets are showing. There's actually a full loop that can take place. We've already seen some major scandals in sports for sure in multiple leagues where players either were taking money or sort of either throwing a game or trying harder to win the game and they were trying to hit their own betting targets, whatever the case may be. We're starting to see this a little bit with politics. I'm a little less convinced in some of the initiatives. I don't think we would blow up Iran to hit a Polymarket deadline by a certain period time, although you never know. But I'm thinking of a little like Tempest of Teapot scandal that a press conference went an extra couple of minutes and this was a prediction that the press conference would go for longer than 60 minutes and so is a press secretary looking at their clock and being like, "If I hold another minute, I can make $500 and Polymarket, whatever the case may be." So take me through this because I feel like at one point they were abstractions and they had no kind of observer effect. Now we're seeing that as you observe the effect, we are influencing the outcomes of that effect. How real is that? And is that saying that you're concerned about long term for this sustainability of this entire industry? Like that whole thing is not impossible to imagine how it can impact it. Yeah, again, so far it's been, I think most people believe on the up and up. Sometimes it's just inside of trading pretty clearly on some markets where somebody who has information is trading on it and profiting off of it or if you're going to spin it from the prediction market size, giving us information that we need to know. I digress on that. But like the Venezuela markets are the one that's been, I've talked to like a lot of mainstream media folks about this where somebody who was probably an insider at Polymarket traded right ahead of the attacks in Venezuela, on Maduro being out on the three other markets and like clearly like it's hard to believe it was a coincidence, right? Now, yeah, somebody going to like make us a strike or pull somebody out because of a prediction market, probably not. What I think is actually more interesting is would you, if these get to scale, would you trade something on a market to send a, to send false information to say like we're like, there's going to be a strike on X, Y, or Z in this country and then you do it to sit like throw people off the cent and you start using it for military intelligence purposes, like that doesn't seem impossible to me if this gets to a scale of where this is how people are doing it. I mean, there are already, I'm certain governments using Polymarket to like inform decision making about like, you know, world leaders and things like that. The community in Iran is like, it's a huge part of what's going like, that's a huge one that people are keeping tabs on, like what do traders think, are they're insiders trading on it that no more than we do. So I don't think there's this impossibility of using markets to like send information, like you're definitely going to see it. I feel like in politics where people try to, you know, manipulate markets by putting a lot of money on X, Y, or Z to make it look like somebody should win when they're not, they don't. That's impossible to do at the presidential level with the amount of liquidity you're going to get beat down, but on smaller down ballot races, it's not impossible. I think to manipulate that now, and Kalshi makes a point of that's prohibited, right? We can't, you can't do that here, your KYC, you're not going to do that here. I think there's some, there's some skepticism about how well they can actually police that and surveil it. But they say they do it on Polymarket, though, and anything that's on chain, it's very easy to, you're anonymous, right? You're linked to a wallet, but you don't, we don't know who you are and you're never going to know. And some amount of Kalshi's markets are tokenized as well, where you could bet this on Solano on chain and then not have that exposure to this. So I don't think it's impossible. Is it like, is it going to get to a scale of like, we really have to worry about it? I don't know, but it's not, it's not unfeasible to say, like, people could start sending signals through the world on, on lower liquidity markets and try to, to influence how people view them. And I think politics actually is the best one. Like, we're going into midterms here in the United States and, you know, house, like certain down ballot races resolve is going to determine who wins the House's representatives, Democrats Republicans. And, you know, are people going to try to do it? I can't say for a fact that they will or that they can influence it, but I think there's there will be up, there will be people that will try to manipulate it to make it happen. Well, I think what you're getting at is a very well-known concept of performativity, which is do markets conform to the metrics conform to the market. And, you know, in the hypothetical of an efficient market, they should, the market should form and then there's a metric that comes out of the market. But I think there's a lot of work, particularly in the last 20, 30 years, that show it's actually quite the opposite that we look at the market and we say, oh, the market's going up, therefore I shall go in. Therefore, you know, narrative economics things go up. And so expectations set the market more than the actual market itself. You can certainly imagine them, the context of polls where a lot of people just care that their side wins or they don't want to vote for the loser and so they just don't show up at the polls. So they sort of, oh, my God, if it's, you know, 70% likely that my opponent is going to win that, whatever, I'm not going to go up and then that actually takes place. And so I could actually see where, you know, it's one thing with 50/50, it's super close, you know, et cetera. If it starts to go a little bit, hey, why are particularly in smaller raises to your point? You know, it is possible that this has a lot of influences, particularly as those sort of metrics start to show the news articles, as people start to report on the horse race that used to be polling in its now prediction markets. I could see a world where it actually really does influence that over the long course of time. The other piece here that I think is really interesting, though, is I'm on Polymarket homepage right now. Obviously a lot of stuff on Iran. You know, the volumes here are really low. I mean, to your point earlier, you know, some of the Iran markets are $700,000. The Super Bowl is $700 million. Okay. So you're probably not going to win a lot of trying to influence the Super Bowl outcome. $700,000 in terms of a market making. I mean, it's probably not low thousands would massively choose as a number, but if you put $30,000, $40,000, $50,000 on the $700,000 market, yes, it will adjust. Does that look like, you know, if the media were to start reporting like, oh, Polymarket says 85, 90 percent chance of strikes in the next month, except put pressure on a president to say, look, people think it's going to happen. If it now doesn't happen, now I look like Taco, you know, to Trump always trickens out or something like that. That that performativity is extremely interesting to me. Yeah. And there's been talk of, I mean, I don't think I would have to go look up through exact quote. But the CEO of Kowshi was like, kind of at one point was kind of behind the idea of prediction markets and forming policy. I think it was, I want to say it was a podcast with the Coinbase CEO talking about like, should we be taking prediction markets and then using that to inform policy? I mean, that's something that could definitely happen to you see, you know, we can see approval numbers or how, you know, how races are trending or what people are like, what people think about the, like, is it the GDP or things like that? Can all of that turn into information that people use to like inform their policy decisions or how they react to the public like that one, I think for sure, is going to happen more and more again. I might be a little fear-mongering that we're going to see the collapse of the democratic system. I don't think that's going to happen. But I do, but I do, but I do think there's, there's concerns here. There's definitely concerns of like, you can do, there are things that can be done. And again, the lower the liquidity the market is, and that's why they want to get the scale, right? You're, the market's going to get hammered in the market. You can't, there wouldn't be any amount of money that you could bet that somebody wouldn't say like, well, this guy's an idiot. I'm going to trade. I'm going to trade against that, right? Or the market maker or CIG or whatever it is doing it. So yeah, I mean, I think there's concerns and I think you can't just wave them away. I was like, there's no concerns here. There are concerns and it's just a matter of what's done about them. And again, there's a proposed legislation about insider trading that, you know, may or may not help all of this, but, you know, this is, this all happens so fast that I don't think a whole lot of people have stopped to think about some of the knock on effects of weakened trade slash gamble on anything in the world now. But I think it's coming up in the opinion place and I will say like a century ago, you know, and Sarah I go as a book called the averaged American, you know, there was no concept of polls. I mean, Mr. Gallup, you know, invented the Gallup organization, started polling Americans. You know, I think there's an amazing statistic, which I hope I'm not completely inventing. But one of the most popular books of the 1910s of the 1920s was actually like a statistical atlas of the United States, because the idea of like, well, who is the average American? First of all, there were tens of millions of new Americans coming in and streaming in from 1870 to 1920 through with immigration, you had the war, and then you had this rise of kind of consumerism that comes in the 1920s. And so all of a sudden, I was like, what do people buy? Like what did they help? No one knew because there was no polling. There was no surveys. No one knew what the averaged American was. And so all of a sudden, we had this idea of like, well, here's the average and here's how I'm different. And it was a very different conception for folks. I think we're going to see the exact same thing rising up now almost a century later, which is to say, you know, polls are an opinion and/or directly like saying, here's what I want. Now we're going to a betting market. That's not saying what I want. It's what I think is going to happen. That's a very different intention. And so what I hear, it's like, well, it's going to inform policy or something like that. Like, I actually agree with you in a deeply cynical way. You want to be on the right side. People want to manage their campaigns, et cetera, but it doesn't express any value. It's actually like the opposite. And you wonder at some point like, if no one has any values and we're all sort of betting what we expect everyone else to be betting on to get to something like who ultimately is choosing a law or a rule or whatever the case may be based on actually what they believe versus what they believe other people believe that kind of misdirection and indirection. Yeah. I mean, it does get really meadow when you start, like, listen, you talk about it in my brain's melting. My brain's melting, but you're right. You're brain melting melt melt. That's basically this podcast entire sagline is everyone's brain melts by the end. That's why our viewership and listenership in the last minute, what you're talking about this cyclical effect of like, okay, like polls are one point of data, right? We have a bunch of polls and but prediction markets obviously are ingesting that data, right? People who are trading are not just trading on a vacuum, right? Like I think this person or that they're taking data from polls and like how they think XYZ polls perform or taking an average of them and that data is getting into the prediction market. And prediction markets like, again, this is a little high-minded, but like the prediction market's like, we're the news, we're like, you don't need the news. You just read the news with us, which I kind of dismiss again, I've come from a journalism background. And I'm like, yes, it'll like, prediction markets will tell you the probability of something. They will tell you if something happened, what happened, but you get no context from that. You don't get why you don't get how, again, like the Venezuelan tax fair, a great example, like, okay, we knew that Maduro was like insider information, but Duro is probably going to get, you know, be out for whatever reason. But we don't let even at that point in time, we didn't know how, like, why was he out? Was he going to get, was there a coup? What, like, there was the United States invading, you know, like, there's a whole lot of the feedback loop is super, is a super interesting problem of law of this, I think. And again, like, it's like, you still need the news because that is informing the data that's getting there. It's just one part of the data that is getting into a prediction market. But anybody who's trading is clearly, like, sometimes you have information, sometimes you're reacting to the news and what that news tells us about the world. And again, the prediction market then takes that information, distills it, gives us a probability on something. That's the interesting part. It's not like, to me, is that we have a probability, we have a num, we can put a number on a thing happening, which again, other than an expert trying to put a number on it, like, people ask me things all the time, like, what I think a chance of something happening in prediction markets or the sports bidding industry is or happening, I have a pretty good sense, but I'm also guessing I'm just putting a number on it. Like, you know, will a prediction market survive, will sports event contracts survive the Supreme Court here in the United States? Or will they go away? I'm like, ah, it's a coin flip. I don't know. If you let a bunch of people trade on it, like, I don't think that's necessarily a good idea, but then you'd get to the information, right? So that's the, I think whenever I think about all this other stuff and how all the noise about this, the thing that's at core is not, it's not getting it right. It's giving us a probability, giving us, what are the odds of something happening? And that's super interesting. We don't need all the other, all the rest of it seems to me to be noise. And that's the, you just stood down to that one number at any time and in a rolling fashion, like, super interesting that, I think I, I, ah, I do have a test background and the, the cardinal rule of all probability is no one understands how probability works unless you're super trained and even people who are super trained really mess up probabilities all the time. I'm thinking particularly medical doctors on one of the fields that is sort of notorious for just being terrible about probability in so many different ways. Uh, but I was thinking about like, as you're going into surgery, you just sort of get a polymarket update that's like, your chance to survival is 84% based on what the market says. Get some combo of AI algorithm plus like polymarket trading data and, uh, you could back against yourself or something. I don't know. Like, it's going to be a, uh, uh, uh, crazy world. We already talked a lot about 2026, but let's, let's project out way out the next couple of years. It feels like polymarket calcium have pioneered, maybe not even pioneered, but they seem to have really built up a category as I mentioned at the beginning of the show that was sort of dormant. Took a long time with predicted others who were trying to make this market into a bigger thing. It took a long time. of Glomdaun either because of product or virality or marketing or because they're on chain, they connected into this crypto world or Robinhood as made betting and the idea of like quick hits on your phone, a popular choice, regardless they are some of the fastest growing companies in Silicon Valley. They're likely to continue to grow. We have this additional societal effects. How does this all come together over the next couple of years? I mean, do you think there's going to be a huge wave of legislation against them? Do you think that people are going to be very uncomfortable with this? And so therefore, it's just going to be a natural form of entertainment and information value for traders. Where do we go in the next couple of years? I mean, the real short term, it is about sports, right? This is, I can't overestimate how much this is how the growth has started. Like again, if sports, if we started ahead and started seeing self-sertification of sports event contracts, basically sports betting, we would probably not be having the same conversations. That is how Kowshi kind of willed itself in this category into this. And again, and by relation to the Trump administration coming into power, right? Like the Biden administration was fighting election betting, let alone being able to trade on sports on any time you want. So like these political considerations and illegal considerations about that kind of forms the contours of what we're going to see. Depending on what happens in the court, again, two or three years, we're going to have a Supreme Court case about all this and whether it's legal and whether the federal law preamps all the state gambling laws are not. We get something there, then we have clarity, right? One way or the other. This is either here to stay or it's gone, that's that's that. I still think there's a huge, in that world, I think there's a huge outcome still on all the other stuff. I'm still bullish on all the other stuff. The other one that I tell people is a presidential regime change in 2028. Like if the Democrats come in, or even if they win, Democrats win in midterms, like there's going to be, I think, more against this, right, against the sports part of this. I'm not overstating it. Say there's like, there's dozens of states, there are attorney generals, both red and blue, I've said, this is sports gambling. Can't have it here. So there's been, there's all this political and legal contours are going to shape all of this. That might be years down the road, but like, so two, three years, I think it's kind of, we're here, or this is the way it's going to be. But longer term, I don't know. That's the like, again, if I'm pricing it, coin flip, is that it all survive, that sports spending could survive. And then how much have they during these two to three years have it as everybody pivoted people to all this other stuff to the election stuff. I get elections are going to be huge, no matter what, but getting people to trade on crypto out crypto markets, getting people, you know, not the crypto itself, but trading on markets on what's the price of Bitcoin, national markets, cultural markets, how, how much adoption do they get? And again, how she's been pretty diminished so far. It's been sports. And then everything else is a, is a rounding error, more or less. Like like 10% of trading is everything else that's not sports. Only market has done a good job. Again, rest of the world, saying, getting people to care about all these other things and put their money on it, right? So if they can replicate that here in the United States, either of them or anybody else who comes along, that's the part that again, I think is interesting and is going to be here no matter what. We're going to have election better and we're going to have all this other event contracts. The sport stuff is whether it's here or not. And again, I would presume it gets smaller as a share over time that they do get people into all these other things that institutional capital gets involved. And we see more and more of the trading on everything else. All the other world events that again is the big idea around prediction markets. Well, I couldn't agree more and I'm looking forward to seeing what happens. The Supreme Court scotus case is coming up and I guess we're going to get a lot more information. That's like, we can bet on at least for now until it's all over. But it doesn't galker the editor and author of the closing line newsletter focused on US gambling news and the event horizon newsletters focused on the predictions market. Thank you so much for joining us. Cheers. Thanks so much for having me. [Music]