Hitachi Energy is proud to partner with the foreign desk on Monaco Radio. Powering Purpose is a new book resulting from the partnership between Hitachi Energy and Monaco. It tells the story of the people and the technology leading the energy transition and ushering in a sustainable and secure future. Hitachi Energy and Monaco work together to provide inspiration on powering people's lives and where to find the energy for change in the era of electrification. Secure your copy now at monaco.com or in-store in Monaco outlets around the world. And if you want to understand the role you can play in harnessing connections to ensure a brighter, more sustainable and secure future, head to powering-purpose.com now. Hitachi Energy and Monaco, inspiring the energy for change. January 2nd, 2026 was a good day for the United States military. Whatever one's views on the legality, morality or probity of the raid on Kyrakas to seize Venezuelan President Nicolas Maduro, Operation Inherent Resolve, as it was called, went with scarcely a hitch. The Americans were in and out in under 150 minutes. Maduro and his wife taken alive. But January 2nd, 2026, appears to have been an especially good day for one US soldier. In April, Ganon Kenván Dyke, a green beret wearing master sergeant with US Army Special Forces, was charged with, among other offences, the unlawful use of confidential government information for personal gain. It is alleged that in the days before the raid, he bet around $34,000 on imminent US action in Venezuela and cleaned up to the tune of 400,000 or so. He has pleaded not guilty. It is very far from the only such alleged or actual incident. One Israeli Air Force officer has been quoted as saying his entire squadron is at it. The platform Van Dyke is accused of using his polymarket. Polymarket, as the name very strongly insinuates, is an online betting exchange which permits customers to take positions on more or less anything. As of this writing, polymarket customers can punt, for example, on whether China will invade Taiwan by the end of this year, whether the United States will acquire Iran's uranium in the same time frame and when the US government might formally confirm the existence of aliens. Right now, $100 in favour of that last proposition will pay $644. The bet against will return $116, which is still better than bank interest. As the case of the United States vs. Master Sergeant Ganon Ken Van Dyke demonstrates, there is potentially a problem here. It is not even really that those in the know might exploit their inside knowledge, that only costs the mugs on the other end of the bet. It is that events may be contrived for profit, or that betting markets may be manipulated to influence events. A sudden plunge on imminent airstrikes against your antagonist is a relatively cheap way to discombobulate them. Our predictions markets potentially a security threat. Is there any way to regulate them? And might they actually be quite a good means of understanding the news? This is the foreign desk. Fake news is a really big problem in the United States and around the world. And prediction markets are an antidote to fake news. What's really concerning about this to me is the way that prediction markets further undermine whatever morsel of shared reality and trust we have left. And that act of predicting and seeing how they're thinking evolves with the stories is what keeps them coming back. You're listening to the foreign desk with me Andrew Muller. Our first guest is John Aristotle Phillips, founder of political data analytics firm Aristotle, which in 2014 launched the prediction market predicted. John first of all introduced predicted to our listeners what does it actually do and how does it work? Predicted is what's called a prediction market. It's structured like a stock market, but for politics and other types of events. Where you are buying and selling one dollar winner take all contracts based on what do you think an event is going to occur or not occur. So for instance in an election or will you starmer as an example? Mm-hm. Will starmer be in office on June 1st? And you can you can buy or sell a contract such as that. The price of the one dollar winner take all contract, which means if you predict correctly, you get a dollar if you predict incorrectly you lose your investment. So the price at which you can buy or sell that starmer contract to use this example is dictated by what thousands of individuals believe the odds are because that price reflects the rough odds of that event occurring in the eyes of the predicted traders. You come to this with a background as a political consultant. Where did your interest begin in converting, I guess, that knowledge and that experience into building a market of this kind? My interest in this goes back to the time I was a little boy. And my younger brother and I were always doing side hustles. And one of the best side hustles was shoveling snow out of people's out of our neighbor's driveways for a few dollars. And so when the weatherman would forecast that it was going to snow the next day, my brother and I would have a little betting exchange on whether or not it was going to be a snow day tomorrow. And that's that's where the interest in event contracts originated. Now more recently, it was and I guess the the more proper answer to your question is our company is a non-partisan political technology firm. That's the parent company that incubated predicted. And the gold standard up to a decade ago for measuring likely outcomes was public opinion polling. And the problem with public opinion polling is while it does some things very well, it's often too expensive or not responsive enough to last minute changes events that might influence the outcome of events. Markets and predicted would be one of them, but the stock market would be another or the commodities markets. They're very sensitive to new information coming into the market. So they are more likely to reflect in real time what the odds of events are of occurring or not occurring than if you question 500 or a thousand people and ask their opinion. If you want to know why people feel the way they do polling public opinion polling is quite good. Focus groups are also quite that they're expensive to hard to organize. But if done correctly, you can get inside the respondents head and understand why they feel is the way they do. But for predicting the future, focus groups and polling really aren't very good. I mean, I know no system is perfect, but why do you think that prediction markets are actually likely to be more accurate in predicting what is actually going to happen than things like polling or focus groups? Because surely markets can be skewed by people betting on what they hope will happen rather than what they think will happen. And people get caught out all the time. I mean, I can remember going back 10 years just before polls closed in this country on the Brexit referendum. You could get about 15 to one on a leave vote in a two-horse race. Yep. Yep. So the question is why are prediction markets and markets more generally more accurate than survey research? And that's a subject. I don't know the answer to that. I mean, I can give you the theories as to what and we have more than a hundred universities and professors at the universities and graduate students all over the world who are studying prediction markets. They look at the data and they try to understand, for instance, questions such as I'll give you another question that there are theories on is what makes for a super forecaster? What are the habits that someone who more consistently than the crowd is able to forecast future events? Is a super forecaster for a political election in Iowa? Do that? Does that man or woman have different habits than someone who is inside the Washington DC Beltway and is paid to make forecasts? And so there are interesting questions. I think it's a combination of things that make these markets so accurate, but all, but high on the list is skin in the game. But I don't really care what you want to have happen. What I really care about is what is going to happen. And so if I'm incentivizing you, if you consistently bet with your heart rather than your head, you're going to lose your money. And that's one of the neat things about these prediction markets is, you know, fake news is a really big problem, a really big problem in the United States and around the world. And prediction markets I like to think are an antidote to fake news. Because as I say, if you consume fake news and you may
make your forecast based on your consumption of fake news. You're going to lose your money. But do you not have any concerns that prediction markets might end up not merely reflecting events, but driving them? I.e. the people who make the decisions, notice which way things are trending on prediction markets and change their own decisions or their own course accordingly? Or do you have concerns that people even can thrive events in order to profit from prediction markets? I'm concerned about a lot of things, but to be honest, Andrew, the chance that public opinion polling and news reporting drives events as much as prediction markets. So we don't ban public opinion polling because politicians look at the polls when they decide what's going to come out of their mouth. What we do is we say, look, public opinion polling or prediction markets or flipping a coin. These are lots of different ways to drive events. But at the end of the day, if the event that you're forecasting will or will not occur on such and such a date, if it occurs, then you're going to make a little bit of money. And if it doesn't occur, you're not. Now, to your other point about extrapolate, I guess, the question is, are these markets susceptible to manipulation? And the answer is yes. And the important part of this is, at predictive, we've been operating this prediction market for more than a decade. There have been no instances of-- there are no scandals about insider trading, none of that stuff. And I'll tell you why. Unlike some of these other prediction markets, we have what's called a position limit, which means, for most of the decade that we've been operating, the position limit was $850. It's now $3,500 is the position limit. You mean, that's the maximum stake you can take in a market. So what that does, right, is that eliminates the ability of a whale, of a billionaire, to come in and try to skew the odds, because that can be no more than $3,500. And no one's going to start a war to win $3,500, or at least you would-- Well, especially if they're going to get caught, which is the second thing that happens, in predicted, there is what's called identity verification. It's rigorous identity verification. You've got to produce some type of government-issued ID to prove that you are Andrew Mueller, and to open an account. Now, not only are you not going to be able to skew the market, but you've got to be just pathologically stupid to provide proof of identity, and then to use misappropriated, non-public, confidential information to try to place a bet. That was John Aristotle Phillips, founder and CEO of Predicted. [MUSIC PLAYING] You're listening to The Foreign Desk with me, Andrew Mueller. There are obvious reasons why laws get written forbidding insider trading in shares, and why athletes are not generally permitted to wager on games in which they are playing. So if we're that worried about protecting the integrity of stock markets and sports, should we be at least as concerned about politics and diplomacy? Well, joining me now from New York is Sahil Desi, senior editor at The Atlantic, and author of The Recent Peace Insider Trading is going to get people killed. Sahil, first of all, let's define our terms a little bit. When we talk about a prediction market, what do we actually mean, and what do we mean by people doing inside betting on them? So prediction markets are a great coinage for these platforms. They love to call themselves prediction markets. For regular people, I would argue that prediction markets are actually the best way to think about these terms. I would like to just call them essentially just gambling sites, but instead of just gambling on sports, you can gamble on anything. So essentially, what that means is that you can bet on the outcome of any future event, whether that's the war in Iran, whether Trump will say whatever in his next press conference, really, whatever you can think of. And when we talk about insider trading on these platforms, that is arguably much more difficult to define. Because in a sense, insider trading, you can see suspiciously well timed bets, and you might be able to surmise or even think that you might know that someone has inside information and is betting accordingly. But especially on polymarket, where betters are anonymous, it can be quite difficult to know for certain that insider trading is happening. What have we seen, though, especially on polymarket that might lead a reasonable person to suspect that that is what's going on? Yeah. So we've seen a number of suspiciously well timed bets that keep honestly happening again and again and again, particularly around geopolitical events. So for example, maybe the quintessential example here in the US was when the Trump administration decided to invade Venezuela earlier this year. Someone bet tens of thousands of dollars in the immediate run up to the invasion. And this was someone who created a new account was only betting on events related to Venezuela, which are two signs that this person had inside information. And they came away with about $400,000. And in the last month or so, this person we've come to learn was an army reservist. So it was someone with inside information. This person has since been charged by the Trump administration. So we have seen instances in which these suspicious bets actually are outed and lead to charges of insider trading. But there are many orders of magnitude more weird concerning bets than there are definitive signs of insider trading. Well, if we assume-- and I think we can-- that people are taking advantage of information they may possess in order to clean up on sites like Polymarket, what actually are the risks of that beyond the people on the other side of that bet getting rinsed? Yeah. I want to sit with that one for a second. In a sense, I don't want to undermine or undervalue the risks of what this raft of insider trading means for people who are actually just putting money down. For example, the Wall Street Journal has reported that a very small percentage of people on Polymarket and other prediction markets are coming away with most of the money. So what that functionally means is if you were betting on any of these prediction markets and you don't have any inside information, you're very likely it's going to lose. So in a sense, it's easy to say, oh, there's not a huge downside for insider trading with the exception of the people who lose money. But lots of people are losing a lot of money. I would say beyond that, what's really concerning about this to me is the way that prediction markets further undermine whatever morsel of shared reality and trust we have left. For example, now we live in a world in which anyone with any kind of inside information might just be leveraging it for money all the time. One instance of this is there was an NPR report from a few weeks ago in which staffers for congressional candidates talked about betting on the outcome of the races that they're working for. It seems quite concerning to me that we can have staffers for political candidates just betting on the outcomes. The other problem here is even when someone is not actually engaged in insider trading accusations of insider trading, now all over the place. An example that we've seen here in the US is Caroline Levit, the White House press secretary. She ended a press conference just pretty suddenly and people on the prediction markets said that she did that just to swing the markets just so that it was under-- I think it was like 65 minutes or something to that effect. There's no evidence of this to be clear. But the way that we all see these accusations of insider trading makes these conspiracy theories bubble up all the time now. Beyond that, though, where do you see the actual risks to national security? Is it the problem that the prediction markets, these gambling platforms end up actually driving the event somehow rather than merely reflecting the probability? That's exactly right. I mean, on the national security front, the Iran War is a great example where right before we saw the first bomb strap earlier this year, there was a ton of really suspicious betting on polymarket in particular. And there's not lots of tools that people can use to track insider trading in real time. And the national security front that's extremely concerning. I talked to experts for my story. And they essentially said that in theory, the Iranian government or any other government for that matter could be a big problem.
to track bets on polymarket and sort of surmise what was happening ahead of time. So you could very much envision a scenario in which during the next invasion that plays out, some military rank and file soldier decides to put a few dollars down on polymarket and that ends up sort of having huge geopolitical consequences. I mean, and you could also see it presumably working in the other direction that a government thinks it's well worth its time and money just to bet two million dollars or whatever on something it knows it isn't going to happen because they're not going to do it merely to wrongful to discombobulate an adversary. Yeah, it really adds to the sort of the digital fog of war, right? It allows governments to really add confusion, right? You could see a scenario in which the odds for a strike in any given country just suddenly rise in polymarket and on the ground, civilians start freaking out. The government urges its residents to go into hiding and go into bunkers and all of that is just a ruse to scare people. It's really in terms of the money that governments have, it wouldn't take much for something like that to play out. Well, the inevitable concluding question then, is there anything that can or should actually be done about this? Or is this just going to be an arena in which people have to leverage whatever advantages they have because, well, there's a car crash of metaphors coming up now about Genie's being out of bottles and toothpaste-leaving tubes. Yeah, Pandora's box, we could keep it. That's the one. That's the one. Yeah, yeah, to answer your question, yes and no. There are some regulations that Congress is currently discussing to more actively regulate insider trading on these prediction markets. But in a top-line sense, I do think that we're going to just keep seeing this happen again and again. Polymarket has sort of just reached an inflection point where there's just so much money coursing through this platform. It is so embedded into every inch of warfare across the world where there's so many things you can bet on. And most importantly, it's extremely hard to regulate because Polymarket uses crypto. Anyone really around the world can use it using a VPN or a virtual private network as it's called, which makes it imaginably difficult to regulate. So in the short and medium term, it's hard to see anything stopping this from happening again and again. Saehyl Desai, senior editor at The Atlantic. Thanks for joining us. This is the foreign desk on Monaco Radio. But, and here is out, what if betting on the news is actually a better way to understand it? Even, perhaps especially if no money is changing hands, and it's just for the love of the game. Well, joining us finally is a Joss V. Jolal, founder of Cauldron. Joss V. First of all, introduce Cauldron. I was going to ask you to explain how it's different from other prediction platforms, except that I understand you don't even want it to be called a prediction platform. Yeah, I talked to hundreds if not thousands of news consumers and kept hearing the same thing. It's to depressing. We don't know what's true. There's just too many headlines and we are overwhelmed and I've just stopped reading the news. So I wanted to do something about it for a person, partly because of how I grew up, I grew up around news. And for me, news is a window into the world. It helps me understand what's going on. It feeds my curiosity. It helps me feel like I belong into the world and it belongs to me. So I wanted more and more people to feel like that instead of feeling all around by it. And it took many, many, many months of wideboarding until one day. It was, what if we flip the script? What if we flip the editorial script? And instead of blasting people with headlines and a constant stream of information? What if we ask them about predict what happens next and see whether or not it's true? I would that change something in the way they think about things and consume news. And that is called in every day you get one question, one prediction on what might happen next. You make a prediction and you follow the story, you see how it resolves and you engage with news differently, you engage with information differently. And the idea is you're predicting tomorrow not for the sake of being right about your predictions, you're predicting tomorrow to understand today differently. Does that make sense? It does make sense, I think. But what I'm interested in is which particular demographic it makes sense to. You mentioned that you'd spoken to hundreds of people who'd become disengaged, detached from the news. Was that a particular cohort? Was it a particular age group or any other kind of stratification? A lot of my friends who are in their 20s, 1890s, 20 early 30s, that is the main focus for us, making news lesser overwhelming for that age group. So is there possibly something in the idea that because this is a generation of people who've grown up online, these are digital natives that it makes more sense for them as a means of consuming news, not just to be consuming it, but to interact with it. I feel like it's a bit weird if they can't join in in some respect. But also, I think partly the problem I kept hearing was, oh, I'm constantly doom scrolling. There is just so much of it, it's an endless stream of information and I'm all around by it. So you're like, oh, that prediction button, it makes you stop. It makes you stop and it makes you be more selective about what you want to engage with. You get to participate because they do want to participate and things and think differently about what's happening. I'm trying to figure out here because one of the things that's different about Cauldron is that you're not taking bets on this, as opposed to most other similar predictive platforms. But if you had a response from the people who are using it that they're saying, yes, this is actually a better and more viable way for me to consume news that I do now actually have a better understanding of what's going on in the world because I'm having to think about what's going to happen next. So on average, people are spending 17 minutes a day on Cauldron on a news app. It's four to five minutes. It's a lot higher. And when I said done with them and I asked them, why are you spending so much time? Because it's not as if there is an endless stream of information. They tell me one thing again and again and it's, oh, it's making them read longer. They are spending more time on one subject and feeling less overrun by it. But also, they're pausing and thinking about things without it feeling like a burden. And that act of predicting and seeing how they're thinking evolves with the stories is what keeps them coming back and wanting to see where they write, where they're wrong. And also, but not even that being about them being right or wrong, just seeing how the story evolves. And to a certain extent, we are closing the loop for them where they're able to follow a story from, well, there is a beginning, middle and end, the beginning being the prediction question, the middle being as well, whatever is happening and the end being when it resolves. Which they don't find in news because they enter it and they feel like, well, come across the story in the middle of it. I don't know how it started and what's going to happen and then it disappears. What if you like so far about what kind of questions people most respond to? Because obviously, you're learning this as you go along. So, you must have have some questions you put out there that people didn't seem all that interested in and other questions which people did respond to in large numbers. Weirdly enough, a lot of the quite political questions are the ones that people respond to more than more technology driven or questions about the markets. They tend to engage with them less. And I am not sure if it's partly because at the moment our user base is small. So, you could possibly say that most of the people are interested in politics, so they're engaging with political questions a lot more. And they also tend to engage with questions that have clear resolution. So, for example, well, Iran be replaced by Italy and the World Cup has a really, it has a clear resolution. Whereas a question like, well, the US Iran ceasefire lost the whole two-week duration, which is more nuanced. There is a lot of great areas. We actually debated how to resolve it. So, those kind of questions, people tend to be more conservative about engaging because there is not a clear yes and no, this is how it happened. But just just finally, because what we're trying to address elsewhere in this program is the idea that markets of this sort, whether money is changing hands or not can end up not just reflecting the news, but actually driving the news or possibly causing the news. Do you have any concerns about that at scale, like a platform such as Cauldron could end up actually having a real world impact? Or do you think that risk is lessened if no money is changing hands? I think that risk is massively lessened if no money is changing hands. So, what prediction markets are doing, they're modifying information by turning events into a price. And whenever some things can modify, there's always more risk of things swaying one way or something happening because there is a lot of money involved. Whereas Cauldron, the question we ask ourselves every day when we come into the office is,
How do we build a new cultural movement around slow thinking and long reading? And it just happens to be that prediction as a mechanism is used to do that on Codren. I believe it's just going to help people consume news slower and more thoughtfully rather than sway, sway events. That was Ojarsvi Jalal, founder of Codren. Thank you for joining us. That's it for this episode of The Foreign Desk. We'll be back next week and look out for the Foreign Desk Explaner available every Wednesday. The Foreign Desk was produced by Anita Riotta and Lily Austin. Lily also produces the Foreign Desk Explaner. To contact the Foreign Desk team, you can email Anita at
[email protected] and don't forget to subscribe to Monical Magazine and our free daily email bulletins by heading to our website at monical.com. For me, Andrew Muller. Thanks very much for listening. Until next time, goodbye.
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