Sports Betting vs Prediction Markets w/ Isaac Rose-Berman | Prediction Market Movers

(upbeat music) Welcome to Prediction Market Movers. I'm Chris Gerlach with Prediction News. And we've got Isaac Rose Berman here with us today from the American Institute for Boys and Men. We're gonna talk about his time as a sports better. How he's moved over to market making on some of the exchanges and some of his policy priorities for young boys and men who encounter gaming content online and prediction markets in adulthood. Over at Prediction News, we're also covering the midterm elections. It's really hard to keep track of what exactly is going on in any given state as a whole. Even if you've got prediction markets that are on every granular race that you can find. Well, Prediction Edge solves that problem. It brings together real-time prediction market data alongside candidate info, fundraising data, endorsements and the latest polling. So head over to predictionedge.com and give it a good sign up there. Isaac, let's go ahead and start with your time as a sports better. I know you were quite good at it once. And now you've moved over to market making on Kalshi. What does that transition been like? - Yeah, so first of all, thank you for having me. I found this show so very happy to be here. Yeah, I mean, it's a different game. Definitely sort of betting and trading a lot less than I used to doing more on the kind of writing and policy analyst side. I go to schools and talk to kids about gambling so kind of a different lifestyle. I think from sort of a profitable trader standpoint, it's just a different game, right? These are zero-sum games. So it's important to know your counterparties, know the rules, know sort of where your edge, where your alpha is coming from. And at a sports book, it's often sort of exploiting model errors or you think of your sort of your counterparty as some trader who's working at the sports book who's incentives are not always the same as someone who's kind of your counterparty at a prediction market or on an exchange in general. So it's trickier. I'm definitely a lot better at beating draft Kings or Fandall than I am at trading at a prediction market. There are a lot of other concerns. You're also dealing with something where there's generally the liquidity's not really a constraint, right? So you're sort of easier at a traditional sports book a lot of the time because you're not always able to bet unlimited amounts of money, whereas at a prediction market, you can kind of always add on. The margins are generally going to be lower, but yeah, a bunch of reasons it's different. It's just a, it's a different game. And so, you know, always trying to stay on top of that. Can't say I'm as good as I am at the other stuff, but try my best. - Sure. How is market making different from just being a regular sharp trader because you're going up against other sharp traders almost exclusively on the prediction markets, right? - Ah, I mean, it depends. The goal is not to go up against other sharp traders, right? If I am going up against other sharp traders, I am going to be losing, right? I am only going to be able to win if I can, you know, capture some of that recreational flow. I think a lot of it, you know, comes down to sort of the micro structure of the prediction market. So to get a little bit into the weeds, right? Like I was doing a lot of market making on Novig, which sort of has no fees both as a market maker and as a market taker. And there are advantages there. There are also disadvantages where on Calshire, generally, you have relatively low market maker fees, but high market taker fees. And so I sort of, before I was doing more market making on Calshire, I sort of found the fees to be, oh, you know, this is kind of quite bad. This is negative for users, right? Because you're sort of getting a much worse price. As a market maker, it's kind of quite nice because you're really quite insulated, right? So if I post an order on Novig and you know, I go away from my computer for five minutes or I take a nap or whatever, and the market moves against me because there's no fees. It's very easy for a sharp trader to just snipe that order. Whereas on Calshire, they have to overcome that very large taker fee. And so you're just kind of much more insulated. But really, I mean, the difference between market making and betting is that you just have to be sort of much more active when you're market making because you don't get filled immediately, right? You need to sort of be always on your computer, monitoring everything. Whereas if you place a bet at trackings or a fan tool, you know, you can say to watch the game and track how you're doing, but once the bet is in, it's done. There's not really that active monitoring. Yeah, once you get your price, you've got your price and you're locked in at the sportsbook. Let me ask you, how you moved over from just the betting side exclusively to joining the American Institute for Boys and Men? Yeah. So my background was in sort of policy and journalism. And so a couple of years ago, I was just basically only betting. I was playing a lot of poker at the time too. I just sort of got frustrated with the state of coverage of the industry and, you know, of gambling in general. And this is sort of before prediction markets sort of really took hold. Obviously, you know, we met at a prediction market conference a couple of years ago. But the perspective I had was just like, look, I was frustrated that a lot of the people who were talking about this and doing this, you know, didn't really know what they were talking about. You know, maybe they weren't trading and they just weren't very knowledgeable about the space. And so I really wanted to, you know, get more involved in that sense. I started writing some stuff. And then, you know, being a freelance journalist is really hard. So it's not something that I sort of saw myself doing in the long run. And so I called, I reached out to the American Super Boys and Men, called you, emailed them. And I was like, hey, you know, I think this, you know, aligns with kind of the work that you guys are doing. I'd sort of love a more institutional backing, you know, some sort of kind of a more academic framing for this. And I thought it would be a good partnership and had some meetings. They liked me and it's been great ever since. Nice. Yeah, what was missing from the coverage of sports betting and prediction markets that was really frustrating you beyond just a lack of specific trading expertise? Yeah, I mean, I don't even think it's really like trading expertise, personally. Like I don't think, you know, what makes me a better media commentator than someone else is the fact that like I'm spending a ton of time, you know, in the order books or whatever. I just think it's sort of understanding like gamblers and traders, right? And so, you know, something as simple as, okay, well, if you're going to do this policy, how is it going to impact people? Like how are people actually engaging with these products? And I think that sort of goes both ways, whether it's people who would say, oh, you know, sports betting is like ruining this entire generation of young men and everybody is losing so much money and their lives are being ruined. And, you know, I would be on the ground seeing lots of people who are like engaging with these products in, you know, a relatively healthy normal way where they're placing a couple bets on Sundays and it's allowing them to have more fun watching the games with their friends. And I'm like, this isn't disastrous at the same time, you know, people who would be too far in the other direction and saying, oh, you know, there's no problems here when you're like, well, you know, obviously, there's sort of a lot of problems that people are encountering with gambling products, with sports betting prediction markets, whatever. So I just think, you know, knowing a lot of gamblers and understanding like how they engage with these products. - Hmm. Why go after the American Institute for Boys and Men to work there and do policy work there instead of like the National Council on Problem Gaming or other adjacent think tanks or organizations? - Yeah, it's a good question. So there's a couple of reasons. First of all, like when I, in particular sort of started doing this about a couple of years ago at this point, like there wasn't really kind of widespread institutional buy-in outside of the gambling world. So like some of the other larger think tanks that people might have heard of, like, you know, the Brookings Center's the, on the right, you know, sort of the American Enterprise Institute. Like a lot of these places sort of didn't really have gambling as a policy area. And I was coming in, you know, obviously relatively young, sort of saying, hey, you know, I want to be doing this. And so I, I sort of had to go to a smaller, more nimble organization. And so that's what the American Super Boys and Men was. And obviously, like gambling and prediction markets are not something that only impacts boys and men. But, you know, generally, especially when it comes to sports betting, that is sort of primarily male dominated. And so it really aligned with kind of their overall focus. And they were just a small nimble organization. I was a big fan of the work that they'd already done. I was a big fan of the founder, Richard Reeves. And so I reached out and I thought it would be a good match. And then I got lucky and then they said, yes. - Nice. - Yeah, and the big Richard Reeves fan myself. So it's really cool to see him carve out that non-toxic space for, you know, confronting issues with boys and men without going over the atmosphere, right? - No, I think, and I think that's it. I mean, I think it's funny. You know, I tell people I work at the American Institute for Boys and Men. And it's sort of like very right wing coded. It's like, oh, like, ask her whatever. And I don't, like, it's actually not, right? You know, I think we sort of maybe leave a little bit left but it's relatively moderate. You know, we're focusing on things like men's mental health, like male college graduation rates, like not really super controversial things, but having that sort of focus on boys and men. As you said, sort of in that kind of non-toxic way. I think if someone's gonna have these conversations, you know, you want it to be, you know, people who are sort of more moderate and reasonable, not sort of on the extremes. You don't want to relegate the conversation to the extremes. Well, if Richard Reeves can go to Utah and Massachusetts and have productive conversations in both states, that says a lot. I mean, what are your policy priorities in your writing and research era at your while you're over here at the American Institute for Boys and Men? - Yeah, well, there's, I mean, as you know, there's sort of sportsmening and in particular, and prediction markets obviously now. Like, this stuff is so new that they're kind of like, so many things that sort of can and probably should be done. And I like to sort of say I have two main policy priorities. and then everything else is like I'm a little bit, if beyond just because I don't really know how it would work in practice, and I can't be sure. But the two things that I'm very sure about are one sort of being a bulwark against this sort of spread of online casino games. So I'm sort of very anti online casino, anti eye gaming. I think the rates of addiction are far higher, overall losses are much higher. I generally believe that we should have legal sports betting, some form of legal regulated prediction markets, but I don't feel the same way for eye gaming and so sort of fighting back against that. And whether that's both the product itself, the conflation of the two, I think it's very problematic that if you're in a state with legal eye gaming, that the apps are combined, like you can't even use the sportsbook without being funneled into the casino. And the other thing is just the marketing, right? I think that like, look, obviously sportsbooks, casinos, prediction markets, whatever, like should be able to market their product. But you know, in the same way that we don't have like Joe Camelon TV, I don't think we should have LeBron James on ESPN every five minutes telling people to sign up. I think it's pretty aggrudition. I was at a Cubs game a couple days ago. There's like literally a draft king's sort of sign in the stadium. Like it's kind of crazy that you can't engage with sports as a fan in the stadium watching TV with that, whatever without being kind of inundated with these gambling advertisements. And whether the answer is, you know, whistle, whistle bands or some form of kind of restrictions on celebrity advertisements or whatever, I definitely think there's a lot of work that needs to be done when it comes to sort of cutting back the advertising. - Yeah, the advertising is, well, it's tricky even outside of sports as well. How do you confront something like some of Caljee's advertisements that show somebody paying their rent by hedging on the economic contracts instead of the sports contracts? - Yeah, I mean, I am not a fan of that marketing to say the least, right? I think that is certainly predatory. They've gotten a lot of trouble for it. You know, the classic sports betting companies will often sort of market it as well. You know, you can use your sports knowledge to win big. They've sort of cut back on that a lot, whereas the prediction markets, I think haven't done that as much. And so yeah, I think part of it is just, you know, general reasonableness about being a platform. Part of it is like, as a CFTC regulated exchange, like, are you really allowed to do that stuff? Aren't there supposed to be some sort of restrictions on what you're allowed to market? So yeah, I mean, I think it's both kind of the frequency of the advertisements, the nature of the advertisements, obviously the prediction markets, in particular, Caljee kind of have gone really hard at the younger demographic on social media. And so there, it's like, okay, you don't have to follow like traditional broadcasting rules. Also, you know, you have this weird thing where you have like all of these affiliates. And so like, it's not technically maybe at Caljee ad, but it's a Caljee sponsorship. And so they're not always gonna follow those same rules. And yeah, like I get it, it's really tricky, especially if you're a new company, you're trying to market your product, but man, like I have seen some pretty egregious marketing on social media from prediction market companies. And a lot of it ends up whether intentionally or not being viewed by people under the age of 18. I go to high schools and I hear kids all the time talking about Caljee because they see the advertisements. And I don't think that's necessarily what they want. But it's hard to sort of prevent that when you have, you know, you're just doing all the social media marketing. So it's a tricky issue for sure, but definitely a lot more restrictions are needed. - How do you approach the issue of prediction markets with 18 year olds in high schools and even some of the other younger, maybe high school juniors and sophomores you may speak to? - Yeah, it's a tricky one. I mean, so like even among prediction markets, right? There are different rules. So Caljee 18 plus, no big is 21 plus. I believe sport trade and profit X are 21 plus, although not 100% sure. So you know, different products are available to them. I think the other thing is sort of not only the use of the products, but the appeal of them, right? So obviously the majority of volume on pretty much all prediction markets is sports, but they do have all the other markets that appeal to a lot of different people, right? And generally we're not talking about like the geopolitical ones, but you know, what is Mr. Beast gonna say? Like who's gonna win dancing with the stars, right? Like what is, I don't know, like what is Mr. Beast's average audience demographic? Right? I think it's used pretty young, right? So like the people who are going to be interested in what words he is gonna say in his next video, we're generally gonna be on the younger side. So I mean, I sort of think, you know, in general, obviously the line between gambling and investing and finance has really been blurred over the last few years, not only with prediction markets, but I think, you know, Robinhood is sort of the biggest example of that, you know, you open up a Robinhood app and it's, you know, so smooth, so gamified, you know, the way that people are engaging with these products really is sort of much more akin to traditional gambling than it would be investing. I think I'd just like to sort of, when I go to schools in particular, explain that look, like there is sort of a blurry line, but there is a difference. I think, you know, generally the things that I like to stress is the time horizon, right? Gambling is sort of the short time versus investing is generally a long term thing, whether or not the game is zero or positive sum, right? So like in a prediction market, that doesn't meet, like obviously you can have winners in prediction markets, but every, like they every dollar that one person wins is a dollar that someone else loses minus the house cut, right? The pot does not grow over time, whereas if you buy stock in a company that can go up over time, which is one of the reasons that I get quite frustrated when you have people talk about, you know, prediction markets as an asset class, like something that everybody should be investing in, like these things don't go up over time, right? Like they're just gonna go down, you see the amount of fees that Robinhood and Calfier making, like it's just not gonna be profitable for most traders, but I just sort of like to sort of draw the line, explain, you know, some of the differences, whether it's about the counter parties, but really, I mean, from a user perspective, the Calchis, the Novigs, it's not that different than a sports book. Most people are not market-making, they're market-taking, so you're just gonna go on, choose your price, you know, you can track it, and maybe it'll be in percentages instead of American odds. But like fundamentally, you know, you're, I think it was Nigel Eckles, the founder of Fandalloo, was like the reason that, you know, Calchis and prediction markets are so similar to sports betting is because fundamentally, you're betting, you're risking money on the outcome of a sporting event, right? And so like, it's kind of, you know, all the same a little bit. - If prediction markets lose sports, are there other categories that you're worried about with this younger demo? - It's a great question. I mean, I think there's sort of two parts of that. One is like whether, you know, you're worried from the perspective of like young people getting really interested, the other is like sort of this general question about like valuations, right? Like how much of Calchis and Polymarkets valuations come from sports versus from other things? I think those two are sort of intimately related. I think that the thing is like people want to bet on sports. And that's, you know, young people, middle aged people, old people, like people just want to bet on sports. And so it's hard for me to imagine like a large percentage of the existing sports betting volume shifting over into other categories, not only because of the appeal, but also because of the regularity, right? Like people want to bet on the presidential election, but that's like once every four years, right? You have sports games, you have, you know, 10 NBA games every night, 12 NFL games every Sunday. So it's just like the regularity there. It's very difficult for me to see sort of the volume catching up there in terms of like the risks for young people. I think a lot of them get drawn in by sort of these exotic markets early on. And yeah, the degree to which like there's an illusion of skill and maybe they think that like, oh, I watched all of Mr. Beast's video, so I have a better chance of getting. That could be more dangerous for sure. But I think, you know, sports are the big thing. That's what most people are trading on young adults. - That is the double-edged sort of offering event contracts, the original pitch from Calci was you can hedge on in these increasingly niche, you know, risks and events that may affect you personally that aren't captured in some other derivative. And sports appeals to everyone, but the Mr. Beast mentions are, you know, you're only gonna care if you're a Mr. Beast fan. I got nothing against him, but I'm not trading in those markets 'cause I don't bother. - Exactly. - Yeah, and I think the other thing is that, you know, the nature of these markets, obviously a lot of them are gonna be, you know, more susceptible to insider information, but like on the kind of liquidity side, a lot of the, you know, offers are being posted by people who don't really want to do that, right? There's a lot of sort of behind the scenes, market-making that like, oh, you know, platforms are gonna incentivize market-making on certain markets because then you'll get benefits in other markets and like a lot of the people, and you know, I think if you've ever seen like the overall P&L for Calche's internal trading team, like they get crushed in culture markets. Like a lot of people do really badly, sort of when it comes to market-making culture markets and like I don't know how much of the liquidity sort of stays there, like who is really posting all of this when someone could kind of just come in and snipe you? And so I think like early on for sports betting, you had all of these like crazy sign-up offers and free money all over the place and you don't really get that for prediction markets, or at least we haven't really seen that yet. But I think that, you know, the sort of large amounts of liquidity and all of these random niche markets sort of are the prediction market equivalent of that. Like I think in a few years, you just won't really have people posting huge amounts of liquidity in things that they don't wanna be posting liquidity in, where they're sort of susceptible to both insiders or knowledgeable counter parties. This is probably not gonna exist. - Going back to the schools real quick, how are the kids reacting and the teachers reacting to your messaging about what gaming is and what to expect from really volatile prediction markets? I mean, I just sort of like to keep it more on the like here is what this activity is, right? And I think, you know, I like to start off my presentations with roulette just because I think it's sort of like the simplest game to understand like how the casino actually makes their money, right? You have 37 or 38 slots, 18 of them are red, 18 of them are black. And you know, you can double your money, but then one in 37 times or two in 38 times, you're gonna lose your money. And that's so the casino wins and then just extrapolating that towards sports betting where you have the big prediction markets where you sort of have the fee and just being like, look, these are fundamentally games of mathematics and statistics. It's just like a number game. And here's sort of why you are expected to lose. And I don't go in saying that like you should or shouldn't gamble at all, or you should or shouldn't trade. I'm just like, look, these games are set up structurally so that you will lose money. And so my goal is like, I want the kids to come out of my presentation being like, okay, if I do this, I am almost certainly going to lose. And I so I spend a lot of time talking less about prediction markets, but more sports betting like responding to all of these hypotheses that kids will have about, oh, if I place bets like this or if I have this trading strategy, like, am I going to win? And I spend a lot of time just being like, no, you know, if you bet a dollar lose and then bet two dollars, it's not gonna, you know, Martin Galing is not gonna work, or you know, if LeBron James is projected to get 25 points and you bet on him getting 20 points, no, that's not actually a lock. And like all of these sort of things about the games themselves, the market dynamics, the counter parties, I just want them to sort of have an understanding of like why they are actually going to lose, especially when so much of the marketing out there from, you know, all of these different companies and operators is kind of telling them, hey, sign up now, you're gonna win big. This is a lot of fun. Thank you. I'll end up in college finance classes anytime soon. I don't know. I spoke to, I was at the national conference for Greek life a few weeks ago. So speaking to a lot of fraternity and sorority leaders. And yeah, obviously, I think it's a different conversation given that, especially when it comes to prediction markets, they're able to use them, whereas like a lot of high schools aren't 18 yet. At the same time, like at high schools, it's sort of easier to slot into a traditional curriculum. So you can go to a college and talk like a club, but it's like trickier to talk to an official class unless you're like teaching there, which I'm not doing. But yeah, it's definitely, you know, a right market, something that, you know, working on developing resources that are sort of applicable for different audiences. But I've found it actually a little bit easier, I think, to talk to high school students, just because they're sort of exposed to these things, often on social media, but they don't have as developed views. So you can kind of mold them a little bit easier, whereas in college, people already sort of are a little bit hardened in their views sometimes. That's interesting. So you have a lot more of the exposure, maybe young, but it really, in four years is not a long time, or even the small time between high school and college, you can really harden that quickly. I don't think that quickly, like it's not like, okay, like, you know, you're not able to mold the opinions of college students. Like, we know that is not the case, certainly. I just think that, like, when it comes to high school students, there's a, the overall engagement with the products is a lot less, right? So they've sort of seen a lot of them, but they haven't done it as much, like, to be clear, a lot of them are betting or gambling, right? Like, kind of shocking numbers, but it's still not like an overall majority, whereas in college, especially, you know, you're talking, talking to like some fraternity leaders and like, all of their kids are already betting, that doesn't mean that it's like, you can't, you know, impact what they're doing, but it's sort of easier if I can get to them relatively early and start explaining this stuff as opposed to, like, it's more building a foundation as opposed to kind of correcting existing beliefs, right? And I think it's a little bit easier, kind of, to go in when someone doesn't have, like, if someone hasn't already used a sportsbook, you could, it's sort of a little bit easier to explain certain things, but how it works sometimes than if they have, and they already have sort of misconceptions about how they work, because most people, especially most college students, like, really don't have a good idea about how gambling works, and not only do they not have a good idea, like, they think they do, which is potentially even more dangerous than not. Okay. Now, listening to you talk about the high school presentations reminded me of some one finance guy in particular, I remember from business school, so they, yeah, the problem is not like, you know, the, the history of these things is not great in that, like, financial literacy programs, like often don't work, like, there's a lot of evidence on them that, like, even the good ones, like, they often, the effects don't last long, you know, I haven't AB tested my, my high school presentations yet, like, those kids are still in high school, like, maybe they're freshman and college, or I can't, like, track 30 years down the road, whether or not I'm having an impact, but the reality is it's very hard not only to explain things to, to people and to young people, but to actually, like, have that stick and change their behaviors for the better down the road, it's a really, really hard thing to do, and I'm not like here saying that, like, ah, you know, if a high schooler hears me talk, like, they are going to be cured from ever having gambling problems or losing money, that is certainly not the case, so just kind of constantly iterating and trying to, you know, adapt it so it's as good as possible. Let me ask you about the problem gambling rate, the kind of standard estimate is it's somewhere between one and five percent, and that's a figure that's been cited even among people in the finance industry who are defending prediction markets, saying, you know, the problem gambling's not an enormous concern for us here, I mean, here are the figures, here's the gaming industry saying this, what is finance lane missing about that figure? Yeah, so it's a really good question. I think there are two things that are missing. The first is that there are a lot of people who are sort of not, don't fall into that one to five percent, but are still using these products in a way that is not healthy for them, not in a way that's sort of beneficial to them, right? Like, I talk to a lot of particularly young, young men, students who, you know, someone who maybe is only losing whatever, 50, a hundred bucks a month, but betting and gambling is like dominating their life, right? They wake up in the morning, the first thing they do is open the draft Kings app, they leave the class, the first thing they do is log on to prize picks and see what the lines are, always tracking their bets, you know, their friends are watching sports and they're just like glued to their phone tracking their bets, and so I think, and that's sort of a problem with technology, compulsive use in general, like there are a lot of people who have a lot of problems with, you know, TikTok or Instagram or whatever, so it's not just kind of a gaming thing or a gambling thing. So I think there's sort of a large number of people who are not losing a lot of money, but using these products in a way that's, you know, not really healthy. And then the second thing is that, you know, the people who have problems with gambling, it's not the same group of people, they're kind of like cycling through, and I don't, you know, actually have great data on this, but the way I kind of think about it is, let's say you have like a hundred people and five of them have a gambling problem, right? And then you sample the same hundred people a year later, and maybe it's like five different people. And so over time, actually, it's much, it's not the same five percent that are having these problems. And the thing about, you know, a gambling problem or a gambling addiction is that like you can lose all of your money very, very quickly, right? And so I'm not saying this happens, but you could imagine a scenario where like you have a hundred people and each year, five different people fall into that sort of compulsive problem gambling category. And each year, every person with a gambling problem loses all of their money to gambling, like in 10 years, 50% of the people have lost all their money gambling. Obviously, that is an exaggeration. And like not everybody who has a gambling problem is going to lose all of their money. It's not like a complete recycling, but the point is it's not like, oh, there's a very small number of people who have a problem. It's the same people, and it's like whatever, it's actually sort of it cycles through and the sort of rates of problematic usage extend far beyond just sort of that small number of people who are losing a ton of money. How big a difference might position limits in certain more contentious or speculative markets make and keeping the problem gambling rate lower in those markets, but also just you're resolving some of the conflicts between the CFTC regulated platforms and the gaming industry. I mean, it's a great question. I think about early on predicted, right? What was it? $750 max limit? Yeah, I remember. I was an active user. So it's a really good question. I think there's also some stuff about, you know, both could impact sort of the insider trading argument, like the market structure. You know, you don't really, you're not really going to have institutional traders there if they're only able to, you know, bet by $850 worth of shares. I think like there's some decent evidence that deposit and sort of position limits can work. The problem is that like they are user implemented, right? And at least how they are sort of hypothesized for sportsbooks and what I've sort of seen for some prediction markets. And like someone with a gambling problem or a trading problem is often not going to self-impose those limits. And if the limits are imposed, they can kind of just get rid of them. So I think, and in general, you know, like this is America, we don't like people telling us what to do. Like people don't, people don't want, you know, draftings to tell them, hey, you can only bet $500 or you can only deposit $1,000 a month. Or they don't, like I don't want Kalshi telling me, hey, you know, you're not able to deposit this much. You're only allowed to have a position size this big. So I think it ends up just sort of falling on the user. And like probably, you know, these tools are good to have. And some people will use them. But the rates of adoption are incredibly low. I think you're talking about like one percent ish of users who will ever engage with, you know, the responsible gaming tools, the, you know, deposit limits, the position limits, whatever. And so I think that's, that's the real problem where you're not really going to have the platform mandate it and then people aren't really going to do it of their own choice. One of the other big contentious issues between finance and gaming is the issue of cannibalization. Citizens Bank, and you were on the call, or you were one of the experts on the call that broke down some of the ideas in this report, but industry leaders estimated there be a 5 percent cannibalization rate that prediction markets would take from sports folks. How, how does that figure seem to you? What are your thoughts on that? Yeah, well, I think that, I know, you know, Jordan Bender, the guy who wrote that report, the citizens folks, the other people who were doing that, you know, I, I think on this front they're a lot better than me. So I'm not really going to sort of dispute their numbers here. I'll say generally, I think that, you know, there's actually a lot less cannibalization than some people would think. Obviously, so much of the prediction market volume is coming from states without legal sports betting. I just don't know that many people in states with legal sports betting who are actively shifting their volume to prediction markets, who are not sort of really high volume or sharp traders. And those people, like, you know, myself, for example, I'm not allowed to bet on draft Kings or Fandall. So if I'm going on Kalshi and Novig in sport trade and doing a lot of trading, like my volume would not exist in the legal market, it can exist in the legal market. And so it's like not clear like that, you know, how much of that actually is being cannibalized. Yeah, I mean, 5% ish, maybe it seems right to me. You look at the, you know, gross gaming numbers, gross gaming revenue, total handle every year in a lot of states. It's going up and up. You know, in some places, it seems to be tapering off. But like in New York, I feel like every single month, we get a record high. So it doesn't seem like, you know, too many people are deleting their draft Kings and Fandall's app to place all their bets on Kalshi or Polling Market. How different is the customer who chooses an exchange over a traditional sportsbook for sports wagering? It's a great question. I think like there are some differences. A lot of it, obviously, is if you're someone who wants these other markets, you know, you want to bet on dancing with the star as you want to, you know, test your luck in the presidential election and you can sort of have all of that existing and one app, as opposed to, you know, people don't want to use a bunch of different apps to trade to gamble with, you know. So however much I think that, you know, like Robin Hood's idea of the everything investing app is really dangerous for society. The reality is that that is what people want. They want all of their trading to happen in one place. But, yeah, I mean, I think, you know, the sort of sharper, more price to serning customer is going to find their way to prediction markets, especially towards platforms which are having lower fees and you're able to get a much better pricing, you know, talk about the citizens reporting early on, Kalshi pricing was worse than sportsbooks. Their most recent report from March Madness said it was actually a little bit better than sportsbooks, even with sort of the taker fees. And so I think, you know, the sharper customer ends up going towards where they can get the better price and also, you know, they're not going to get limited in a platform like Kalshi or Polymarket or no bigger sport trade. And so, yeah, I think sort of the sharper customer ends up at the prediction market, the person who kind of just wants to place a random 10 leg, same game parlay, risk a couple bucks to win a few hundred, I think they're generally at least for the time being going to stay at the sportsbooks, not only because they can get all sorts of perks, but because the user interface is better. And there's just a lot more flexibility, especially with the parlay as although, obviously, prediction markets are getting better and better with the RF queues there. How important are the parlay's for prediction market exchanges to get right, especially if they end up keeping sports? I think it's very important, especially if you want to get a lot of that recreational accent, right? I mean, I think parlay's now make up something like 50% of, if not handle sort of total revenue for sportsbooks. And so, if you're trying to kind of onboard all of the people who were using the sports books to your prediction markets, you have to have the products that they want. And they want parlay's, right? People want to risk a little bit to win a lot. And it's also obviously very important from the revenue side, although just the problem is, you know, right now, obviously, a lot of different market makers competing for that flow. But yeah, I mean, if you are a prediction market and you want a draft king's customer to use your platform instead, you've got to have the parlay's all, all able for them to use. That all tracks. Well, Isaac, it's been great to talk to you and get your thoughts on the industry. Where can people find you and follow you for your thoughts? Thank you so much for having me. Yeah. So you can find me on Twitter @RoundRobin42. My substack, I write, you know, once in a while, howgamblingworks.com and then my personal website, just IsaacRoseBurman.com has all my podcasts writing, whatever, this will be up there very shortly. Thanks so much for having me, Chris. I really appreciate it. Thanks for coming on. Well, you know where to follow Isaac and to follow us. Make sure you like this video to give us some support, subscribe to our YouTube channel, @PradictionNews, and follow us on X, @PradictionNews. Isaac, thanks again for swinging by. Pleasure.