April 15, 2026 • 31 mins
What do frat boys, nepo babies and the Super Bowl have in common? Prediction markets. Wall Street Journal investigative reporter Katherine Long tells us how information from Jeff Bezos's stepson sparked a bet worth nearly a million dollars, and how a rumor loosely tied to Mark Wahlberg's daughter sent $24 million into a single market. And why college kids are betting in the first place.
Kalshi and Polymarket have been quietly making themselves at home on college campuses, paying fraternities for new sign-ups, handing out branded beer pong sets, and recruiting influencers to spread the word. The pitch to students: this is just a fun way to make money off what you already know. With over $10 billion in monthly trading volume and almost no regulatory oversight, Polymarket and Kalshi are no longer a niche corner of the internet.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:15):
Welcome to Tech Stuff. I'm Oz Valosha, and this is
the story. We've talked a bunch about Polymarket and Kalshi
on this podcast, so called prediction markets, and recently they've
had quite a run. Mystery traders on polymarket have made
big payouts wagering on events such as strikes on Iranian
nuclear facilities last year, the removal of Venezuelan President Nicholas
(00:37):
Maduro from power before the end of January this year,
and the exact date of the beginning of the aerial
war on Iran February twenty eighth. Just last week, two
Senators introduced a bipartisan bill bluntly called the Prediction Markets
Are Gambling Act that would ban prediction markets from creating
(00:58):
contracts around sport. Our guest today is Catherine Long, an
investigative reporter with The Wall Street Journal who recently wrote
a fascinating story about how prediction markets have overtaken college
campuses and about the intersection of insider trading, NEPO babies,
and frat boys. Welcome, Catherine, Hey, good to be here.
(01:18):
What a great triumvirate.
Speaker 2 (01:20):
I mean, I hadn't exactly conceived of it until you
put it that way, but I think you're right on
the money there.
Speaker 1 (01:25):
So take a step back there, and when did you
become interested in Calshi and poly market and when did
they kind of take the world by storm. I feel
like I'll hear about them all the time, but I
can't really put my finger on when it started.
Speaker 2 (01:36):
Yeah, so I think people really started becoming aware of
College and poly Market around the twenty twenty four election.
A lot of trading activity on poly market around whether
Donald Trump would win that election. Obviously he did, the
traders on poly market predicted it correctly, and I think
that caused a lot of people to perk up and
take notice of the platform, when before maybe they had
(01:58):
heard of it vaguely but not spend a lot of
time looking into it.
Speaker 1 (02:01):
I remember in the like Nate Silver days, like there
was always this idea that like betting markets were better
than polsters in terms of telling you what was going
to happen in future, and that was like a thing
that was talked about for a while, and then I
guess in twenty twenty four election like it became gospel.
Speaker 3 (02:18):
Yeah, yeah, totally.
Speaker 2 (02:18):
I mean, like prediction markets have been around for a
long time, but they have not been around in the
same to the same degree that they are currently embedded
in nearly every facet of American life. And actually, to
that point, you know, I should mention right off the
bat that Dow Jones, the publisher of the Wall Street Journal,
has a partnership with with Polymarket.
Speaker 3 (02:37):
I want to get that disclosure out there.
Speaker 2 (02:38):
Prediction markets have also inked partnership deals with a large
number of other.
Speaker 4 (02:43):
Media outlets, CNN, CNBC.
Speaker 3 (02:45):
That's right.
Speaker 2 (02:45):
We can look up and turn on the news and
see where the odds are trending.
Speaker 4 (02:49):
What's the difference between this and betting on the bookmaker?
Speaker 3 (02:54):
There's a few differences.
Speaker 2 (02:56):
So if you hear me stumbling over this, So the
differences are, you know, first of all, Paul Market and
College and other prediction markets, they would, you know, if
they were sitting right here with us today, they would
say stridently they are they are not gambling platforms. They're
not gambling, right, And the reasons that they say that
are there's a few of them. One is, you know,
there they have made the argument that they are exchanges,
(03:18):
their commodities exchanges, their futures exchanges, and they're regulated federally
by the CFTC. They've made the argument that you know,
unlike betting on a sports book, there is no house.
You know, you're betting peer to peer. You're trading against
each other, your match. It's a battle of wills or
battle of wits, I should say, battle of wits between
people who have information, people have analyzed information. They're going
(03:39):
toe to dough in these prediction markets, trying to be
the person who is going to bet correctly on what's
actually going to happen. And you know, I think they
would also say that there is a hedging and a
news value to them that they would perhaps argue some
traditional sports books might not have.
Speaker 1 (04:00):
And are they like Uber and lyft, PEPSI and coke,
or are there other like distinctions between Kelshi and Polymarket.
Speaker 2 (04:06):
Call she is US headquartered, US based platform that markets
to US users and is licensed by the CFTC, the
Commodity's Features Trading Commission. Poly Market took a bit of
a different approach. It's technically although it has offices in
the US and just down the street in New York City,
(04:26):
just like call she, it is technically an offshore platform
where users are trading using cryptocurrencies. Now that was the
result of a twenty twenty two settlement between Polymarket and
federal regulators. Federal regulators at that point charged that poly
Market was operating an illegal commodities exchange. It was an
illegal platform, and poly Market agreed just to go offshore
(04:47):
and say, Okay, we're going to technically ban US users
from using our platform. You know, I think anybody with
a VPN is able to get around that ban, and
most people who have a crypto wallet are pretty familiar
with how to operate a VPN, so know, definitely some
debate over whether that is effective at all. Polymarket, I
should say, is also launching its own US, licensed to
(05:08):
US regulated prediction market called Polymarket US. It's open for
US users at the moment, it's still sort of in
data and you can only trade on sports.
Speaker 1 (05:18):
And is that a little bit more hardcore in that
sense because it's you have to use crypto and you
have to use a VPN and stuff. Is that like
a difference in the user basis cal she more like
entertainment focused and Polymarket is more more like hardcore? Or
is that is that kind of a false dichotomy?
Speaker 2 (05:32):
Do you think no, I think I think you're onto
something there. I mean my impression from speaking with users
of both platforms is that the barrier to entry to
trade on call she is much lower.
Speaker 3 (05:41):
You're trading with us dollars.
Speaker 2 (05:42):
I mean, it's it's easier to get started on CALSH
and then polymarket is sort of the home of the quants.
Speaker 1 (05:48):
And final question before we get to your story that
these both these companies make money by essentially charging a
transaction fee on every wager. Do you have any sense
of the betting volumes?
Speaker 2 (05:59):
Yeah, I mean they have skyrocketed in just over the
past year. In fact, I'm going to actually consult a
chart so I don't get it wrong.
Speaker 1 (06:06):
If that's okay, live self like checking.
Speaker 2 (06:13):
So we know that the betting volumes are are relatively
equivalent between the two platforms. We know that in you know,
the first few months of this year, poly marketing call
She are approaching ten billion dollars in betting volume each month,
especially around.
Speaker 3 (06:30):
The Super Bowl.
Speaker 1 (06:31):
Well, and they're taking like a ten ten basis points.
So we don't know quite what that transaction fees are.
Speaker 2 (06:35):
The fee schedule is mathematical and changes based on how
much you're trading.
Speaker 1 (06:42):
So yeah, Well, without further ado I think to truly
understand Calci and poly market, which I know having read
your story, we have to talk.
Speaker 4 (06:50):
About Jeff Bezos's step son.
Speaker 1 (06:53):
We have to talk about Mark Wohlberg's Daughta, and we
have to talk about Dana white from the UFC's Daughta.
This is just ay and wild story. But can you
start with Evan white Cell? Who is he and what's
his story?
Speaker 2 (07:06):
Evan white Cell is the stepson of Jeff Bezos. He
is the son of Jeff Bezos's second wife, Laurence Sanchez,
with Patrick Whitesell, the Hollywood producer, famous guy. So he's
sort of the scion of two fantastically famous, wealthy families.
And he's also a freshman at the University of Miami
and a member of a fraternity there.
Speaker 4 (07:28):
And what happened next, Well.
Speaker 2 (07:31):
Sometime before the Super Bowl, members of this fraternity signal
fa Epsilon became aware via Evan white Cell. People tell
me that Jeff Bezos would not be attending the super Bowl,
And to you and I, maybe that information matters very little.
But two people who are familiar with calls, they knew
(07:51):
that there was a market around whether.
Speaker 3 (07:54):
Jeff Bezos would be at the Super Bowl.
Speaker 2 (07:56):
And they knew that at the time that they learned
this information, the odds were that Jeff Bezos would attend,
that he would be there. And people recognized, you know,
this information that they had via white Cell as possibly
a lucrative trading opportunity, and very quickly that information spread
not only throughout the fraternity, but throughout the school and
(08:18):
even two students at other colleges.
Speaker 1 (08:19):
Now, does your reporting suggest that white Cel mentioned in
passing oh, by the way, my stepdad's not going to
the Super BOWLT or that he knew this was tradable
information which he wants to share.
Speaker 4 (08:30):
With his friends.
Speaker 3 (08:31):
I don't think we have an answer to that.
Speaker 2 (08:32):
We do know that white Cell does not have a
college account, he did not place trades on this himself,
and the people I spoke to who were involved in
the trades, they weren't certain whether white Cell was aware
of this as a trading opportunity or that this is
something that he mentioned incidentally. But suffice it to say
somebody in the fraternity knew that this information could be monetized.
Speaker 4 (08:53):
He wasn't eager to comment on your story himself. No,
I mean, what are we talking?
Speaker 1 (08:59):
He are we're talking about a few thousand dollars we're
talking about I mean, when you mentioned a billion dollars
a month in trading volume, what does the does Bezos
attend the Super Bowl or not trade look like?
Speaker 2 (09:08):
So this was a market that ultimately had close to
a million dollars in trading volume. The people who were
involved in the trades that anywhere from fifty dollars to
in one instance as much as ten thousand dollars university
student people who heard about the trade via the university
students via the fraternity members.
Speaker 1 (09:28):
Yeah, was it hard to track down these fraternity members
and what did they and what did they tell you
about how this came about? And were they worried when
you called?
Speaker 2 (09:36):
Surprisingly, it was not difficult to track down people who
were involved in this. So the chain of the chain
of transmission for me actually was I called up a
student at Tulane who had written an excellent article for
his student newspaper about trading on Kalshi with his fraternity
(09:57):
during the Super Bowl, and I I was curious about
this topic. I called them up. I said, you know,
great article, I'd love to learn a little bit more.
And he was like, well, you know, The thing I
didn't put in the article was that fraternity members at
the University of Miami had this other trade around whether
Jeff Bezos were a tend like, no kidding, I'd love
to look into that more so, you know, it was
(10:19):
really just a process of making phone calls. At that
point when I called them up, I think, you know,
there was a mixture of pride and also nervousness, because
there's a real uncertainty, you know, not just among college students,
but among a lot of people who trade on these
markets about how rules around insider trading are going to
(10:43):
be enforced. I mean, this is a real sort of
gray area for a lot of folks. And I want
to read you and actually, you know something that one
of the people involved of these trades told.
Speaker 3 (10:53):
Me about this.
Speaker 2 (10:54):
He said, quote, we know this shouldn't be allowed. People
are like, is this insider information is regulated? You feel
like you're doing something you're not supposed to. It feels
like someone should stop you. And as soon as I
heard that, I was like, I know there's a story here.
Speaker 4 (11:10):
Wow, And what's the answer to his question?
Speaker 1 (11:12):
Is this, like, are they popular breaking the law by
betting on insider information?
Speaker 4 (11:16):
On in these platforms.
Speaker 2 (11:18):
Yeah, I mean I think I think a lot of
this has yet to be decided.
Speaker 3 (11:23):
You know, there's so many gradations.
Speaker 2 (11:25):
Of insider information that these platforms have kind of exposed. Right,
there's markets about everything, And is it insider information if
you stand outside the Super Bowl stadium and listen to
somebody rehearsing the national anthem so that you can bet
on how long the national anthem is going to be?
Is it insider information if you if you hear from
your fraternity brother that their family member is not going
(11:45):
to be at the Super Bowl. I mean, this is
not the type of information that the SEC would necessarily
find actionable. This is not material information, but this is
information that's now monetizable. And the federal agency that's in
charge of overseeing these prediction markets, in the past year,
they've certainly taken a very hands off approach, and they've
also scaled down their enforcement division significantly. So there's a
(12:08):
real question of, well, is anybody looking at this stuff?
Speaker 1 (12:12):
Well, I want to come back to the insider trading issue,
the regulation issue I want to point out now, which
we'll come back to that. I think Donald Trump Junior
is an advisor to Calshi and a board member and investor.
Speaker 4 (12:23):
At poly Market.
Speaker 3 (12:24):
That's right.
Speaker 1 (12:24):
Yeah, so some support for these platforms from within the
administration for sure.
Speaker 2 (12:30):
Yeah, yeah, friends and high places, definitely. And the chair
of the CFTC is also a big supporter of prediction markets.
Speaker 1 (12:36):
I want to, just before we get onto that to
the nit secrety of regulation, talk a little bit more
about NEPO babies, including Mark Wohlberg's daughter and Dana White's daughter,
talk about how their stories relate to the Super Bowl
and the betting.
Speaker 3 (12:49):
Yeah.
Speaker 2 (12:49):
So, in a lot of senses, this is real, like
a tale of two cities, the best of times in
the worst of times. So simultaneous to these Portunity members
at the University of Miami effectively monetizing information that they
you know, that they believed came from Evan Weitzel, there
were also fratrinity members all around the country who were
(13:10):
trading on what they believed was insider information that turned
out to be false. And that was a rumor that
started at fraternities and at Clemson University in South Carolina
that Mark Wahlberg would be at the Super Bowl.
Speaker 3 (13:26):
Mark Wahlberg noted.
Speaker 2 (13:28):
Patriots fan reason to believe that he might be there,
and his daughter, as it happens, attends Clemson and is
quite involved in Greek life there. So you know, within days,
a rumor that Mark Wahlberg would be in the super
Bowl spread to fraternities throughout the country, group texts, and
you know, I've seen some of these messages through posts
(13:48):
on a corner of Twitter called the burner Verse, which
is sort of populated by fraternity members who use pseudonymous
accounts to post like stuff that you probably wouldn't want
your name to be associated with. And then also on
social media, so like on TikTok for instance. And this
information spread so far that twenty four million was traded
(14:11):
on whether Mark Wahlberg would be at the super Bowl,
which was far and away the most money traded on
Call She's markets on who would be attending, which celebrities
would be attending, way more than whether Donald Trump would
it in the super Bowl, way more than whether Jdvans
would itten the super Bowl, in fact, more than any
of the other celebrities combined.
Speaker 4 (14:30):
Do we believe this volume was driven because of Mark
Wahlberg's daughters purported that the rumors that Mark Warlburg's daughter
are given insider information or do we not know what?
Speaker 2 (14:41):
I have no reason to believe that Mark Wolberg's daughter
was actually involved in this. After the end of the
Super Bowl, she posted on TikTok something to the effect of,
you know, any fraternity member who bet on Mark Wahlberg
being at the Super Bowl is an idiot who deserves
to wield all their money.
Speaker 4 (14:57):
And what about Dana White, the UFC CEO.
Speaker 2 (14:59):
So well, the UFC actually has a partnership with Polymarket.
Dana White's daughter is also a student at the University
of Miami. And in my conversations with some of the
fraternity members who had bet on Jeff Bezos' attendance, you know,
one of them brought up like, well, you know, the
children of a lot of famous people go here, for instance,
(15:20):
Dana White's daughter, maybe she knows something. And you know,
they said they hadn't done anything with that yet. But
we reached out to Dana White's team for comment, and
what he told us was, quote, my daughter gambled one
time and lost twenty dollars and was depressed for two months.
And as far as what I do for a living,
I don't even know if my daughter knows that I
(15:40):
work for the fucking UFC. Pretty strong response, implying that
his daughter is not probably going to be giving away
any inside information anytime soon on UFC matches.
Speaker 1 (15:50):
Now, you know, one doesn't often feel too sorry for
napper babies. But the idea of if you have a
famous parent, or even a somewhat famous parent, any information
you just close about your family can be traded upon online.
I mean that that is a huge blow to the idea.
I mean, we already live in a world with substantially
(16:11):
reduced privacy, right with like everyone constantly recording on their phone,
et cetera, et cetera. But the idea that you'd have
to be completely tight lipped about your movements of your
family because people you thought your friends might be using
it for insider information for trading. I mean, it's kind
of a spooky world we're contemplating.
Speaker 3 (16:28):
Oh totally.
Speaker 2 (16:29):
I mean I had exactly the same thought, right, the
idea that you know, just because I mentioned in passing
where my family might be like people I thought I
could trust might now be making money off that. I mean,
it's it's almost I mean, it seems potentially like demeaning
and cruel in a lot of senses.
Speaker 3 (16:49):
I mean, I do feel badly for these kids.
Speaker 4 (16:52):
It's dystopian.
Speaker 1 (17:03):
After the break, influencers, cash for parties, and the lure
of a poly market beer pong set.
Speaker 4 (17:10):
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The link is in the podcast episode description box. The
story I think is also particularly interesting.
Speaker 1 (18:35):
It's not just about NEPO babies, but I guess there's
a wider Polymarket and calshy frenzy. But it feels from
your story like there's a specific campus thing going on
as well.
Speaker 2 (18:46):
Yeah, I mean, what we found is that Cultry and
Polymarket have made efforts to aim their marketing towards college students,
and from a business standpoint, I would argue this makes
a lot of sense in a lot of states. You know,
not every state allows gambling. Not every state allows online gambling.
In many of the states that do, it's restricted to
(19:06):
people who are over twenty one. But because call She
and Polymarket have argued they're a different kind of platform
that's not gambling, anybody who's over eighteen can use them,
and that kind of means that there's a slice, a
three year slice between eighteen and twenty one where you
can legally use call She and poly market, but maybe
you might be restricted from betting on DraftKings or FanDuel.
(19:29):
And that means that call She and polymarket have possibly
an incentive to try to attract younger users to their platforms.
And what we found is that the way that they're
positioning their marketing suggests that that's exactly what they're doing.
I mean, call She has worked with a large number
of college age influencers to promote its product on social media,
and Polymarket has gone the route of working directly with
(19:52):
student groups to try to sign up users on college campuses.
Speaker 1 (19:55):
So I remember when I was a student, Red Bull
would come and give kinds of free red Bull. What's
the equivalent in the error of Polymarket.
Speaker 2 (20:02):
Polymarket has been working with fraternities in particular, but student
groups sort of cross the spectrum, saying if you are
able to sign up users, we will pay you for
every user that you sign up, and you can use
that money to throw wild parties.
Speaker 3 (20:18):
Wow.
Speaker 2 (20:19):
Yeah, they're handing out Polymarket branded beer pong sets. They're
sponsoring student competitions. Call She, I should say, did initially
roll out sort of a similar sounding program and then
decided to move in a different direction. But call She
was sponsoring briefly some campus student groups as well, though
Polymarket appears to be doing much more so in.
Speaker 4 (20:39):
That vein and I'm one about influence in marketing.
Speaker 2 (20:41):
So both companies have signed up college age students to
market their products on TikTok and Instagram. Call She has
filmed some advertisements directly on college campuses. I'm thinking of
advertisements that were filmed on the Utah Valley University campus.
Speaker 3 (20:57):
For instance.
Speaker 2 (20:59):
And they're sort of positioning their platforms as ways to
earn fun money or you know, ways to help get
to a concert on the weekend or buy a coffee,
or you know, ways to monetize things that you might
know but didn't know. Potentially we're worth money and create
an income stream for yourself as a student.
Speaker 4 (21:21):
And I think goes even younger than college students. Right.
Speaker 1 (21:24):
Wasn't there some influencer in your story who was offered
a gig who was fifteen?
Speaker 2 (21:29):
Yeah, there was a video game streamer. He's based in Europe,
but he was approached initially by call She. They signed
him up as an affiliate marketer on Twitter, and then
I've seen messages indicating that he was very uprom with
them about being under eighteen. You know, he's not even
allowed to trade on call She, and they said that's fine.
And then sort of a week later, he gets a
(21:50):
message from the call She employee that he'd been working with,
saying that quote, yo, brother, legal team confirmed that we
can't work with minors right now. Kind of sad tbh.
Speaker 4 (22:03):
And you couldn't make it up.
Speaker 3 (22:05):
No, yeah, you know this, yeah, China sayd TV.
Speaker 2 (22:11):
So this user also showed me messages confirming that Polymarket
had also reached out to him and attempted to recruit
him as as an affiliate on Twitter.
Speaker 1 (22:18):
Interesting timing for your story, because a couple of Bellwether
social media trials where Meta and YouTube were found liable
for harm caused the teenage users, And of course what
was most damning I think was the discovery and the
internal communications of the executives. You know, it's almost like
in real time, just we're seeing a new form of
(22:39):
social interaction explicitly targeted towards you know, minors or at
least under twenty ones, which has presumably enormous potential to
cause harm, taking off at exactly the same time that
these Bellweather trials are happening on the social media age,
and it's interesting and kind of chilling irony.
Speaker 2 (22:57):
Yeah, I mean, I think the platforms were responds to
that is, you know, that they don't believe that they
cause harm. I'm referring here to prediction markets. When my
colleagues spoke with Calshi's former head of operations, who began
trading on prediction markets precursors to cash and polymarket when
he was a teen, and he mentioned that, you know,
(23:18):
it was a formative experience for him, and he also
used it in part to help fund his college experience.
I've spoken with young people college students who find the
ability to bet on their convictions to be gratifying, and
they seem to be making a fair amount of money
doing so.
Speaker 3 (23:35):
Yeah.
Speaker 1 (23:35):
I mean, of course, the other thing which is worth
acknowledging is that campuses are not just for partying and boozing. Right,
There are also places where, like the marketplace of ideas
and debate, and the idea of being right is like
particularly important. There is a clearly like intellectual appeal which
I can imagine for like certain college students is very
different from betting.
Speaker 2 (23:55):
Yeah, yeah, totally I mean, even the college students who
are betting on sports, you know, some of them have
to developed quite sophisticated quantitative trading strategies, just like the
most sophisticated sports betters do.
Speaker 1 (24:05):
Is there any pushback from universities, from parents, from student groups,
I mean, is there is there a resistance brewing or
is it just so emergent that that the kind of
the response has not yet been marshaled.
Speaker 2 (24:18):
I would say it's it's the latter, you know. I
think conversations that I've had with parents and educators suggest
that they have becoming They're becoming increasingly aware of the
amount of time and energy that students might be spending
on prediction markets. But it's really so nascent still that
it's not something that any kind of formal strategy has
(24:41):
evolved to address.
Speaker 1 (24:42):
Efforts of regulation have begun, but they're quite narrow. There's
largely on sports betting and a little bit on government
inside of trading.
Speaker 3 (24:53):
Yeah.
Speaker 2 (24:53):
I would actually flip that to say it's focused largely
on government insider trading, and maybe a little bit on
sports betting. But yeah, I mean, you know that the
efforts at regulation, it seems like every day now a
new congress person that's coming out with some prediction market
related bill. I mean, I think it last count there
were like over a dozen of.
Speaker 4 (25:13):
A dozen prediction market bills.
Speaker 2 (25:15):
Yeah, yeah, yes, many of them are Bi Patterson. I
don't think any of them address the marketing to young people.
I did, I believe earlier today here Alexandria A Casio Cortez.
Speaker 3 (25:27):
Discussing that in the context of prediction markets.
Speaker 2 (25:29):
But there's no legislation that's been introduced that specifically is
directed at that.
Speaker 4 (25:33):
Can you take them one by one?
Speaker 1 (25:34):
I mean, let's start actually with the sports betting and
then go on to the government inside of trading in
the sports betting. What wider regulators and congress people and
senators care particularly about sports betting, is this lobbying?
Speaker 4 (25:45):
Is it something else? What's what's going on here?
Speaker 2 (25:47):
Well, I should say, first of all, just to give
us a little bit of context on this, the vast
majority of volume on calls she and Polymarket is sports,
easily over seventy percent at least on Kalshi is traded
on sports related contracts. So you know, detractors have said
College and Polymarket they market themselves as truth machines. They
market themselves as ways to learn more about global affairs
(26:10):
and the news, but really they are just a sports
book with a different wrapper. And sports books politically very powerful.
Something like thirty states have legalized online sports betting and
in return, the states received taxes from those platforms. If
there is now a new way of betting on sports
that does not involve those platforms paying taxes to states,
(26:35):
I mean, I think it's quite clear why states would
be opposed to that. The gambling lobby also, you know,
quite powerful, and they see prediction markets as a big
threat to their livelihood.
Speaker 1 (26:44):
That makes sense. And now let's talk about government inside training.
I mentioned at the beginning and the introduction the initial
strikes in Iran, the removal of Madura from Venezuela, and
then the exact date of the recent war in Iran
beginning February twenty eighth.
Speaker 4 (26:58):
I mean, this is pretty wild. Do we have any
sense of like, what's happening here is as obvious as
it looks from the outside.
Speaker 2 (27:06):
Yeah, I mean there are people who spend their entire
professional lives trying to track down the people behind these
highly opportune bets. One person in Israel, part of the
Israeli military was arrested by Israeli forces for inseder trading
on Polymarket related to our moon strikes. There have not
been any arrests in the US related to putative insider
(27:29):
trading on prediction markets, but it's clear that this is
a topic that is generating a lot of concern among
the public and among lawmakers.
Speaker 4 (27:38):
You mentioned your story that six suspected insiders made one
point two million dollars wag during that the US would
strike Iran last month.
Speaker 2 (27:46):
Yeah, so that's according to a crypto analytics sperm called
bubble Maps. And actually since we published that story, they've
updated that analysis and they found some other wallet that
they believed to be linked to those same potential insiders
who have made similar trades, also really to the Iran
war and the possibility to cease fire, also involving large
sums of money.
Speaker 1 (28:06):
It's pretty pretty nuts, to be honest. And where does
Donald Trump Junior fit him all all this? Obviously the
Trump family, you know, through the Atlantic City casino and stuff,
they have a long history of interaction with gambling platforms.
Do you know, like why Donald Trump Junior got interested
in both Calshi and Polymarket and whether he may be
part of some kind of internal lobbying effort to protect
(28:28):
these platforms, but given he's an investor and an advisor
to each of them, so.
Speaker 2 (28:32):
I don't have a lot of visibility into Donald Trump
Junior's involvement with these two platforms. I would add to
what you have just said that he is also launching
his own prediction market in partnership with Crypto dot com
on the truth social platforms called truth Predict. So he
is exposed to prediction markets now in you know, as
many as three different ways.
Speaker 1 (28:51):
Gosh, it's like, I mean, it's hard to imagine being
being an advisor and investor and a founder of three
different companies doing the same thing.
Speaker 2 (28:59):
But I guess, yeah, I mean, I guess don't put
your eggs in one basket.
Speaker 3 (29:05):
One way of looking at it.
Speaker 1 (29:06):
That's interesting, talk a little bit about what these platforms
are doing to woo regulators and opinion makers in the US.
I mean, the media partnership is interesting, right, like CNN, CNBC,
Dow Jones, Like, do you have any do your reporting
kind of reveal the strategy behind these partnerships or is
(29:28):
that the media companies themselves being like this is addictive information,
we want it.
Speaker 2 (29:32):
I don't have any specific reporting that would speak to
the platform's strategy behind the partnerships with media groups. I
would say, you know, in general, both Calcium Polymarket have
sought to strike partnership arrangements with high profile national organizations.
The MLB was a partnership that Polymarket just struck. Polymarket
can use the official Major League Baseball logo and other
(29:56):
types of branding materials on its site when it's ADVERTI
bets on Baseball games. UFC I talked about national hockey
leagues and other partnerships. So both platforms are sort of
racing to scoop up these partnerships and sort of try
to acquire mind share across the American public as they're
(30:16):
seeking to normalize the idea of betting on anything.
Speaker 1 (30:22):
So just a clothes I have to ask you if
you have any predictions on where the story goes next.
Speaker 2 (30:28):
I am most interested in watching the relationship between robin
Hood and Call She. Call She currently gets about a
third of its volume from its partnership with robin Hood.
Speaker 4 (30:37):
This is people betting on outcomes through robin Hood.
Speaker 3 (30:40):
Rather Yeah, that's right, that's right.
Speaker 2 (30:43):
Robinhood, though recently acquired its own prediction market and it's
working with a call she partner as Sisquehan International Group
to launch that, and so I'm extremely curious to see.
Speaker 3 (30:56):
Where that's going to go.
Speaker 4 (30:57):
Catherine Long, thank you, thanks so much for having me
for tech stuff. I'm as Volosha.
Speaker 1 (31:13):
This episode was produced by Eliza Dennis and Melissa Slaughter.
It was executive produced by me Julia Nutter and Kate
Osborne for Kaleidoscope and Katrina Norvel for iHeart Podcasts. The
engineer is Kathleen Conti from CDM Studios. Jack Insley makes
this episode and Kyle Murdoch wrote up theme song and
please also do rate and review the podcast wherever you
listen
Welcome to Tech Stuff. I'm Oz Valosha, and this is
the story. We've talked a bunch about Polymarket and Kalshi
on this podcast, so called prediction markets, and recently they've
had quite a run. Mystery traders on polymarket have made
big payouts wagering on events such as strikes on Iranian
nuclear facilities last year, the removal of Venezuelan President Nicholas
(00:37):
Maduro from power before the end of January this year,
and the exact date of the beginning of the aerial
war on Iran February twenty eighth. Just last week, two
Senators introduced a bipartisan bill bluntly called the Prediction Markets
Are Gambling Act that would ban prediction markets from creating
(00:58):
contracts around sport. Our guest today is Catherine Long, an
investigative reporter with The Wall Street Journal who recently wrote
a fascinating story about how prediction markets have overtaken college
campuses and about the intersection of insider trading, NEPO babies,
and frat boys. Welcome, Catherine, Hey, good to be here.
(01:18):
What a great triumvirate.
Speaker 2 (01:20):
I mean, I hadn't exactly conceived of it until you
put it that way, but I think you're right on
the money there.
Speaker 1 (01:25):
So take a step back there, and when did you
become interested in Calshi and poly market and when did
they kind of take the world by storm. I feel
like I'll hear about them all the time, but I
can't really put my finger on when it started.
Speaker 2 (01:36):
Yeah, so I think people really started becoming aware of
College and poly Market around the twenty twenty four election.
A lot of trading activity on poly market around whether
Donald Trump would win that election. Obviously he did, the
traders on poly market predicted it correctly, and I think
that caused a lot of people to perk up and
take notice of the platform, when before maybe they had
(01:58):
heard of it vaguely but not spend a lot of
time looking into it.
Speaker 1 (02:01):
I remember in the like Nate Silver days, like there
was always this idea that like betting markets were better
than polsters in terms of telling you what was going
to happen in future, and that was like a thing
that was talked about for a while, and then I
guess in twenty twenty four election like it became gospel.
Speaker 3 (02:18):
Yeah, yeah, totally.
Speaker 2 (02:18):
I mean, like prediction markets have been around for a
long time, but they have not been around in the
same to the same degree that they are currently embedded
in nearly every facet of American life. And actually, to
that point, you know, I should mention right off the
bat that Dow Jones, the publisher of the Wall Street Journal,
has a partnership with with Polymarket.
Speaker 3 (02:37):
I want to get that disclosure out there.
Speaker 2 (02:38):
Prediction markets have also inked partnership deals with a large
number of other.
Speaker 4 (02:43):
Media outlets, CNN, CNBC.
Speaker 3 (02:45):
That's right.
Speaker 2 (02:45):
We can look up and turn on the news and
see where the odds are trending.
Speaker 4 (02:49):
What's the difference between this and betting on the bookmaker?
Speaker 3 (02:54):
There's a few differences.
Speaker 2 (02:56):
So if you hear me stumbling over this, So the
differences are, you know, first of all, Paul Market and
College and other prediction markets, they would, you know, if
they were sitting right here with us today, they would
say stridently they are they are not gambling platforms. They're
not gambling, right, And the reasons that they say that
are there's a few of them. One is, you know,
there they have made the argument that they are exchanges,
(03:18):
their commodities exchanges, their futures exchanges, and they're regulated federally
by the CFTC. They've made the argument that you know,
unlike betting on a sports book, there is no house.
You know, you're betting peer to peer. You're trading against
each other, your match. It's a battle of wills or
battle of wits, I should say, battle of wits between
people who have information, people have analyzed information. They're going
(03:39):
toe to dough in these prediction markets, trying to be
the person who is going to bet correctly on what's
actually going to happen. And you know, I think they
would also say that there is a hedging and a
news value to them that they would perhaps argue some
traditional sports books might not have.
Speaker 1 (04:00):
And are they like Uber and lyft, PEPSI and coke,
or are there other like distinctions between Kelshi and Polymarket.
Speaker 2 (04:06):
Call she is US headquartered, US based platform that markets
to US users and is licensed by the CFTC, the
Commodity's Features Trading Commission. Poly Market took a bit of
a different approach. It's technically although it has offices in
the US and just down the street in New York City,
(04:26):
just like call she, it is technically an offshore platform
where users are trading using cryptocurrencies. Now that was the
result of a twenty twenty two settlement between Polymarket and
federal regulators. Federal regulators at that point charged that poly
Market was operating an illegal commodities exchange. It was an
illegal platform, and poly Market agreed just to go offshore
(04:47):
and say, Okay, we're going to technically ban US users
from using our platform. You know, I think anybody with
a VPN is able to get around that ban, and
most people who have a crypto wallet are pretty familiar
with how to operate a VPN, so know, definitely some
debate over whether that is effective at all. Polymarket, I
should say, is also launching its own US, licensed to
(05:08):
US regulated prediction market called Polymarket US. It's open for
US users at the moment, it's still sort of in
data and you can only trade on sports.
Speaker 1 (05:18):
And is that a little bit more hardcore in that
sense because it's you have to use crypto and you
have to use a VPN and stuff. Is that like
a difference in the user basis cal she more like
entertainment focused and Polymarket is more more like hardcore? Or
is that is that kind of a false dichotomy?
Speaker 2 (05:32):
Do you think no, I think I think you're onto
something there. I mean my impression from speaking with users
of both platforms is that the barrier to entry to
trade on call she is much lower.
Speaker 3 (05:41):
You're trading with us dollars.
Speaker 2 (05:42):
I mean, it's it's easier to get started on CALSH
and then polymarket is sort of the home of the quants.
Speaker 1 (05:48):
And final question before we get to your story that
these both these companies make money by essentially charging a
transaction fee on every wager. Do you have any sense
of the betting volumes?
Speaker 2 (05:59):
Yeah, I mean they have skyrocketed in just over the
past year. In fact, I'm going to actually consult a
chart so I don't get it wrong.
Speaker 1 (06:06):
If that's okay, live self like checking.
Speaker 2 (06:13):
So we know that the betting volumes are are relatively
equivalent between the two platforms. We know that in you know,
the first few months of this year, poly marketing call
She are approaching ten billion dollars in betting volume each month,
especially around.
Speaker 3 (06:30):
The Super Bowl.
Speaker 1 (06:31):
Well, and they're taking like a ten ten basis points.
So we don't know quite what that transaction fees are.
Speaker 2 (06:35):
The fee schedule is mathematical and changes based on how
much you're trading.
Speaker 1 (06:42):
So yeah, Well, without further ado I think to truly
understand Calci and poly market, which I know having read
your story, we have to talk.
Speaker 4 (06:50):
About Jeff Bezos's step son.
Speaker 1 (06:53):
We have to talk about Mark Wohlberg's Daughta, and we
have to talk about Dana white from the UFC's Daughta.
This is just ay and wild story. But can you
start with Evan white Cell? Who is he and what's
his story?
Speaker 2 (07:06):
Evan white Cell is the stepson of Jeff Bezos. He
is the son of Jeff Bezos's second wife, Laurence Sanchez,
with Patrick Whitesell, the Hollywood producer, famous guy. So he's
sort of the scion of two fantastically famous, wealthy families.
And he's also a freshman at the University of Miami
and a member of a fraternity there.
Speaker 4 (07:28):
And what happened next, Well.
Speaker 2 (07:31):
Sometime before the Super Bowl, members of this fraternity signal
fa Epsilon became aware via Evan white Cell. People tell
me that Jeff Bezos would not be attending the super Bowl,
And to you and I, maybe that information matters very little.
But two people who are familiar with calls, they knew
(07:51):
that there was a market around whether.
Speaker 3 (07:54):
Jeff Bezos would be at the Super Bowl.
Speaker 2 (07:56):
And they knew that at the time that they learned
this information, the odds were that Jeff Bezos would attend,
that he would be there. And people recognized, you know,
this information that they had via white Cell as possibly
a lucrative trading opportunity, and very quickly that information spread
not only throughout the fraternity, but throughout the school and
(08:18):
even two students at other colleges.
Speaker 1 (08:19):
Now, does your reporting suggest that white Cel mentioned in
passing oh, by the way, my stepdad's not going to
the Super BOWLT or that he knew this was tradable
information which he wants to share.
Speaker 4 (08:30):
With his friends.
Speaker 3 (08:31):
I don't think we have an answer to that.
Speaker 2 (08:32):
We do know that white Cell does not have a
college account, he did not place trades on this himself,
and the people I spoke to who were involved in
the trades, they weren't certain whether white Cell was aware
of this as a trading opportunity or that this is
something that he mentioned incidentally. But suffice it to say
somebody in the fraternity knew that this information could be monetized.
Speaker 4 (08:53):
He wasn't eager to comment on your story himself. No,
I mean, what are we talking?
Speaker 1 (08:59):
He are we're talking about a few thousand dollars we're
talking about I mean, when you mentioned a billion dollars
a month in trading volume, what does the does Bezos
attend the Super Bowl or not trade look like?
Speaker 2 (09:08):
So this was a market that ultimately had close to
a million dollars in trading volume. The people who were
involved in the trades that anywhere from fifty dollars to
in one instance as much as ten thousand dollars university
student people who heard about the trade via the university
students via the fraternity members.
Speaker 1 (09:28):
Yeah, was it hard to track down these fraternity members
and what did they and what did they tell you
about how this came about? And were they worried when
you called?
Speaker 2 (09:36):
Surprisingly, it was not difficult to track down people who
were involved in this. So the chain of the chain
of transmission for me actually was I called up a
student at Tulane who had written an excellent article for
his student newspaper about trading on Kalshi with his fraternity
(09:57):
during the Super Bowl, and I I was curious about
this topic. I called them up. I said, you know,
great article, I'd love to learn a little bit more.
And he was like, well, you know, The thing I
didn't put in the article was that fraternity members at
the University of Miami had this other trade around whether
Jeff Bezos were a tend like, no kidding, I'd love
to look into that more so, you know, it was
(10:19):
really just a process of making phone calls. At that
point when I called them up, I think, you know,
there was a mixture of pride and also nervousness, because
there's a real uncertainty, you know, not just among college students,
but among a lot of people who trade on these
markets about how rules around insider trading are going to
(10:43):
be enforced. I mean, this is a real sort of
gray area for a lot of folks. And I want
to read you and actually, you know something that one
of the people involved of these trades told.
Speaker 3 (10:53):
Me about this.
Speaker 2 (10:54):
He said, quote, we know this shouldn't be allowed. People
are like, is this insider information is regulated? You feel
like you're doing something you're not supposed to. It feels
like someone should stop you. And as soon as I
heard that, I was like, I know there's a story here.
Speaker 4 (11:10):
Wow, And what's the answer to his question?
Speaker 1 (11:12):
Is this, like, are they popular breaking the law by
betting on insider information?
Speaker 4 (11:16):
On in these platforms.
Speaker 2 (11:18):
Yeah, I mean I think I think a lot of
this has yet to be decided.
Speaker 3 (11:23):
You know, there's so many gradations.
Speaker 2 (11:25):
Of insider information that these platforms have kind of exposed. Right,
there's markets about everything, And is it insider information if
you stand outside the Super Bowl stadium and listen to
somebody rehearsing the national anthem so that you can bet
on how long the national anthem is going to be?
Is it insider information if you if you hear from
your fraternity brother that their family member is not going
(11:45):
to be at the Super Bowl. I mean, this is
not the type of information that the SEC would necessarily
find actionable. This is not material information, but this is
information that's now monetizable. And the federal agency that's in
charge of overseeing these prediction markets, in the past year,
they've certainly taken a very hands off approach, and they've
also scaled down their enforcement division significantly. So there's a
(12:08):
real question of, well, is anybody looking at this stuff?
Speaker 1 (12:12):
Well, I want to come back to the insider trading issue,
the regulation issue I want to point out now, which
we'll come back to that. I think Donald Trump Junior
is an advisor to Calshi and a board member and investor.
Speaker 4 (12:23):
At poly Market.
Speaker 3 (12:24):
That's right.
Speaker 1 (12:24):
Yeah, so some support for these platforms from within the
administration for sure.
Speaker 2 (12:30):
Yeah, yeah, friends and high places, definitely. And the chair
of the CFTC is also a big supporter of prediction markets.
Speaker 1 (12:36):
I want to, just before we get onto that to
the nit secrety of regulation, talk a little bit more
about NEPO babies, including Mark Wohlberg's daughter and Dana White's daughter,
talk about how their stories relate to the Super Bowl
and the betting.
Speaker 3 (12:49):
Yeah.
Speaker 2 (12:49):
So, in a lot of senses, this is real, like
a tale of two cities, the best of times in
the worst of times. So simultaneous to these Portunity members
at the University of Miami effectively monetizing information that they
you know, that they believed came from Evan Weitzel, there
were also fratrinity members all around the country who were
(13:10):
trading on what they believed was insider information that turned
out to be false. And that was a rumor that
started at fraternities and at Clemson University in South Carolina
that Mark Wahlberg would be at the Super Bowl.
Speaker 3 (13:26):
Mark Wahlberg noted.
Speaker 2 (13:28):
Patriots fan reason to believe that he might be there,
and his daughter, as it happens, attends Clemson and is
quite involved in Greek life there. So you know, within days,
a rumor that Mark Wahlberg would be in the super
Bowl spread to fraternities throughout the country, group texts, and
you know, I've seen some of these messages through posts
(13:48):
on a corner of Twitter called the burner Verse, which
is sort of populated by fraternity members who use pseudonymous
accounts to post like stuff that you probably wouldn't want
your name to be associated with. And then also on
social media, so like on TikTok for instance. And this
information spread so far that twenty four million was traded
(14:11):
on whether Mark Wahlberg would be at the super Bowl,
which was far and away the most money traded on
Call She's markets on who would be attending, which celebrities
would be attending, way more than whether Donald Trump would
it in the super Bowl, way more than whether Jdvans
would itten the super Bowl, in fact, more than any
of the other celebrities combined.
Speaker 4 (14:30):
Do we believe this volume was driven because of Mark
Wahlberg's daughters purported that the rumors that Mark Warlburg's daughter
are given insider information or do we not know what?
Speaker 2 (14:41):
I have no reason to believe that Mark Wolberg's daughter
was actually involved in this. After the end of the
Super Bowl, she posted on TikTok something to the effect of,
you know, any fraternity member who bet on Mark Wahlberg
being at the Super Bowl is an idiot who deserves
to wield all their money.
Speaker 4 (14:57):
And what about Dana White, the UFC CEO.
Speaker 2 (14:59):
So well, the UFC actually has a partnership with Polymarket.
Dana White's daughter is also a student at the University
of Miami. And in my conversations with some of the
fraternity members who had bet on Jeff Bezos' attendance, you know,
one of them brought up like, well, you know, the
children of a lot of famous people go here, for instance,
(15:20):
Dana White's daughter, maybe she knows something. And you know,
they said they hadn't done anything with that yet. But
we reached out to Dana White's team for comment, and
what he told us was, quote, my daughter gambled one
time and lost twenty dollars and was depressed for two months.
And as far as what I do for a living,
I don't even know if my daughter knows that I
(15:40):
work for the fucking UFC. Pretty strong response, implying that
his daughter is not probably going to be giving away
any inside information anytime soon on UFC matches.
Speaker 1 (15:50):
Now, you know, one doesn't often feel too sorry for
napper babies. But the idea of if you have a
famous parent, or even a somewhat famous parent, any information
you just close about your family can be traded upon online.
I mean that that is a huge blow to the idea.
I mean, we already live in a world with substantially
(16:11):
reduced privacy, right with like everyone constantly recording on their phone,
et cetera, et cetera. But the idea that you'd have
to be completely tight lipped about your movements of your
family because people you thought your friends might be using
it for insider information for trading. I mean, it's kind
of a spooky world we're contemplating.
Speaker 3 (16:28):
Oh totally.
Speaker 2 (16:29):
I mean I had exactly the same thought, right, the
idea that you know, just because I mentioned in passing
where my family might be like people I thought I
could trust might now be making money off that. I mean,
it's it's almost I mean, it seems potentially like demeaning
and cruel in a lot of senses.
Speaker 3 (16:49):
I mean, I do feel badly for these kids.
Speaker 4 (16:52):
It's dystopian.
Speaker 1 (17:03):
After the break, influencers, cash for parties, and the lure
of a poly market beer pong set.
Speaker 4 (17:10):
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The link is in the podcast episode description box. The
story I think is also particularly interesting.
Speaker 1 (18:35):
It's not just about NEPO babies, but I guess there's
a wider Polymarket and calshy frenzy. But it feels from
your story like there's a specific campus thing going on
as well.
Speaker 2 (18:46):
Yeah, I mean, what we found is that Cultry and
Polymarket have made efforts to aim their marketing towards college students,
and from a business standpoint, I would argue this makes
a lot of sense in a lot of states. You know,
not every state allows gambling. Not every state allows online gambling.
In many of the states that do, it's restricted to
(19:06):
people who are over twenty one. But because call She
and Polymarket have argued they're a different kind of platform
that's not gambling, anybody who's over eighteen can use them,
and that kind of means that there's a slice, a
three year slice between eighteen and twenty one where you
can legally use call She and poly market, but maybe
you might be restricted from betting on DraftKings or FanDuel.
(19:29):
And that means that call She and polymarket have possibly
an incentive to try to attract younger users to their platforms.
And what we found is that the way that they're
positioning their marketing suggests that that's exactly what they're doing.
I mean, call She has worked with a large number
of college age influencers to promote its product on social media,
and Polymarket has gone the route of working directly with
(19:52):
student groups to try to sign up users on college campuses.
Speaker 1 (19:55):
So I remember when I was a student, Red Bull
would come and give kinds of free red Bull. What's
the equivalent in the error of Polymarket.
Speaker 2 (20:02):
Polymarket has been working with fraternities in particular, but student
groups sort of cross the spectrum, saying if you are
able to sign up users, we will pay you for
every user that you sign up, and you can use
that money to throw wild parties.
Speaker 3 (20:18):
Wow.
Speaker 2 (20:19):
Yeah, they're handing out Polymarket branded beer pong sets. They're
sponsoring student competitions. Call She, I should say, did initially
roll out sort of a similar sounding program and then
decided to move in a different direction. But call She
was sponsoring briefly some campus student groups as well, though
Polymarket appears to be doing much more so in.
Speaker 4 (20:39):
That vein and I'm one about influence in marketing.
Speaker 2 (20:41):
So both companies have signed up college age students to
market their products on TikTok and Instagram. Call She has
filmed some advertisements directly on college campuses. I'm thinking of
advertisements that were filmed on the Utah Valley University campus.
Speaker 3 (20:57):
For instance.
Speaker 2 (20:59):
And they're sort of positioning their platforms as ways to
earn fun money or you know, ways to help get
to a concert on the weekend or buy a coffee,
or you know, ways to monetize things that you might
know but didn't know. Potentially we're worth money and create
an income stream for yourself as a student.
Speaker 4 (21:21):
And I think goes even younger than college students. Right.
Speaker 1 (21:24):
Wasn't there some influencer in your story who was offered
a gig who was fifteen?
Speaker 2 (21:29):
Yeah, there was a video game streamer. He's based in Europe,
but he was approached initially by call She. They signed
him up as an affiliate marketer on Twitter, and then
I've seen messages indicating that he was very uprom with
them about being under eighteen. You know, he's not even
allowed to trade on call She, and they said that's fine.
And then sort of a week later, he gets a
(21:50):
message from the call She employee that he'd been working with,
saying that quote, yo, brother, legal team confirmed that we
can't work with minors right now. Kind of sad tbh.
Speaker 4 (22:03):
And you couldn't make it up.
Speaker 3 (22:05):
No, yeah, you know this, yeah, China sayd TV.
Speaker 2 (22:11):
So this user also showed me messages confirming that Polymarket
had also reached out to him and attempted to recruit
him as as an affiliate on Twitter.
Speaker 1 (22:18):
Interesting timing for your story, because a couple of Bellwether
social media trials where Meta and YouTube were found liable
for harm caused the teenage users, And of course what
was most damning I think was the discovery and the
internal communications of the executives. You know, it's almost like
in real time, just we're seeing a new form of
(22:39):
social interaction explicitly targeted towards you know, minors or at
least under twenty ones, which has presumably enormous potential to
cause harm, taking off at exactly the same time that
these Bellweather trials are happening on the social media age,
and it's interesting and kind of chilling irony.
Speaker 2 (22:57):
Yeah, I mean, I think the platforms were responds to
that is, you know, that they don't believe that they
cause harm. I'm referring here to prediction markets. When my
colleagues spoke with Calshi's former head of operations, who began
trading on prediction markets precursors to cash and polymarket when
he was a teen, and he mentioned that, you know,
(23:18):
it was a formative experience for him, and he also
used it in part to help fund his college experience.
I've spoken with young people college students who find the
ability to bet on their convictions to be gratifying, and
they seem to be making a fair amount of money
doing so.
Speaker 3 (23:35):
Yeah.
Speaker 1 (23:35):
I mean, of course, the other thing which is worth
acknowledging is that campuses are not just for partying and boozing. Right,
There are also places where, like the marketplace of ideas
and debate, and the idea of being right is like
particularly important. There is a clearly like intellectual appeal which
I can imagine for like certain college students is very
different from betting.
Speaker 2 (23:55):
Yeah, yeah, totally I mean, even the college students who
are betting on sports, you know, some of them have
to developed quite sophisticated quantitative trading strategies, just like the
most sophisticated sports betters do.
Speaker 1 (24:05):
Is there any pushback from universities, from parents, from student groups,
I mean, is there is there a resistance brewing or
is it just so emergent that that the kind of
the response has not yet been marshaled.
Speaker 2 (24:18):
I would say it's it's the latter, you know. I
think conversations that I've had with parents and educators suggest
that they have becoming They're becoming increasingly aware of the
amount of time and energy that students might be spending
on prediction markets. But it's really so nascent still that
it's not something that any kind of formal strategy has
(24:41):
evolved to address.
Speaker 1 (24:42):
Efforts of regulation have begun, but they're quite narrow. There's
largely on sports betting and a little bit on government
inside of trading.
Speaker 3 (24:53):
Yeah.
Speaker 2 (24:53):
I would actually flip that to say it's focused largely
on government insider trading, and maybe a little bit on
sports betting. But yeah, I mean, you know that the
efforts at regulation, it seems like every day now a
new congress person that's coming out with some prediction market
related bill. I mean, I think it last count there
were like over a dozen of.
Speaker 4 (25:13):
A dozen prediction market bills.
Speaker 2 (25:15):
Yeah, yeah, yes, many of them are Bi Patterson. I
don't think any of them address the marketing to young people.
I did, I believe earlier today here Alexandria A Casio Cortez.
Speaker 3 (25:27):
Discussing that in the context of prediction markets.
Speaker 2 (25:29):
But there's no legislation that's been introduced that specifically is
directed at that.
Speaker 4 (25:33):
Can you take them one by one?
Speaker 1 (25:34):
I mean, let's start actually with the sports betting and
then go on to the government inside of trading in
the sports betting. What wider regulators and congress people and
senators care particularly about sports betting, is this lobbying?
Speaker 4 (25:45):
Is it something else? What's what's going on here?
Speaker 2 (25:47):
Well, I should say, first of all, just to give
us a little bit of context on this, the vast
majority of volume on calls she and Polymarket is sports,
easily over seventy percent at least on Kalshi is traded
on sports related contracts. So you know, detractors have said
College and Polymarket they market themselves as truth machines. They
market themselves as ways to learn more about global affairs
(26:10):
and the news, but really they are just a sports
book with a different wrapper. And sports books politically very powerful.
Something like thirty states have legalized online sports betting and
in return, the states received taxes from those platforms. If
there is now a new way of betting on sports
that does not involve those platforms paying taxes to states,
(26:35):
I mean, I think it's quite clear why states would
be opposed to that. The gambling lobby also, you know,
quite powerful, and they see prediction markets as a big
threat to their livelihood.
Speaker 1 (26:44):
That makes sense. And now let's talk about government inside training.
I mentioned at the beginning and the introduction the initial
strikes in Iran, the removal of Madura from Venezuela, and
then the exact date of the recent war in Iran
beginning February twenty eighth.
Speaker 4 (26:58):
I mean, this is pretty wild. Do we have any
sense of like, what's happening here is as obvious as
it looks from the outside.
Speaker 2 (27:06):
Yeah, I mean there are people who spend their entire
professional lives trying to track down the people behind these
highly opportune bets. One person in Israel, part of the
Israeli military was arrested by Israeli forces for inseder trading
on Polymarket related to our moon strikes. There have not
been any arrests in the US related to putative insider
(27:29):
trading on prediction markets, but it's clear that this is
a topic that is generating a lot of concern among
the public and among lawmakers.
Speaker 4 (27:38):
You mentioned your story that six suspected insiders made one
point two million dollars wag during that the US would
strike Iran last month.
Speaker 2 (27:46):
Yeah, so that's according to a crypto analytics sperm called
bubble Maps. And actually since we published that story, they've
updated that analysis and they found some other wallet that
they believed to be linked to those same potential insiders
who have made similar trades, also really to the Iran
war and the possibility to cease fire, also involving large
sums of money.
Speaker 1 (28:06):
It's pretty pretty nuts, to be honest. And where does
Donald Trump Junior fit him all all this? Obviously the
Trump family, you know, through the Atlantic City casino and stuff,
they have a long history of interaction with gambling platforms.
Do you know, like why Donald Trump Junior got interested
in both Calshi and Polymarket and whether he may be
part of some kind of internal lobbying effort to protect
(28:28):
these platforms, but given he's an investor and an advisor
to each of them, so.
Speaker 2 (28:32):
I don't have a lot of visibility into Donald Trump
Junior's involvement with these two platforms. I would add to
what you have just said that he is also launching
his own prediction market in partnership with Crypto dot com
on the truth social platforms called truth Predict. So he
is exposed to prediction markets now in you know, as
many as three different ways.
Speaker 1 (28:51):
Gosh, it's like, I mean, it's hard to imagine being
being an advisor and investor and a founder of three
different companies doing the same thing.
Speaker 2 (28:59):
But I guess, yeah, I mean, I guess don't put
your eggs in one basket.
Speaker 3 (29:05):
One way of looking at it.
Speaker 1 (29:06):
That's interesting, talk a little bit about what these platforms
are doing to woo regulators and opinion makers in the US.
I mean, the media partnership is interesting, right, like CNN, CNBC,
Dow Jones, Like, do you have any do your reporting
kind of reveal the strategy behind these partnerships or is
(29:28):
that the media companies themselves being like this is addictive information,
we want it.
Speaker 2 (29:32):
I don't have any specific reporting that would speak to
the platform's strategy behind the partnerships with media groups. I
would say, you know, in general, both Calcium Polymarket have
sought to strike partnership arrangements with high profile national organizations.
The MLB was a partnership that Polymarket just struck. Polymarket
can use the official Major League Baseball logo and other
(29:56):
types of branding materials on its site when it's ADVERTI
bets on Baseball games. UFC I talked about national hockey
leagues and other partnerships. So both platforms are sort of
racing to scoop up these partnerships and sort of try
to acquire mind share across the American public as they're
(30:16):
seeking to normalize the idea of betting on anything.
Speaker 1 (30:22):
So just a clothes I have to ask you if
you have any predictions on where the story goes next.
Speaker 2 (30:28):
I am most interested in watching the relationship between robin
Hood and Call She. Call She currently gets about a
third of its volume from its partnership with robin Hood.
Speaker 4 (30:37):
This is people betting on outcomes through robin Hood.
Speaker 3 (30:40):
Rather Yeah, that's right, that's right.
Speaker 2 (30:43):
Robinhood, though recently acquired its own prediction market and it's
working with a call she partner as Sisquehan International Group
to launch that, and so I'm extremely curious to see.
Speaker 3 (30:56):
Where that's going to go.
Speaker 4 (30:57):
Catherine Long, thank you, thanks so much for having me
for tech stuff. I'm as Volosha.
Speaker 1 (31:13):
This episode was produced by Eliza Dennis and Melissa Slaughter.
It was executive produced by me Julia Nutter and Kate
Osborne for Kaleidoscope and Katrina Norvel for iHeart Podcasts. The
engineer is Kathleen Conti from CDM Studios. Jack Insley makes
this episode and Kyle Murdoch wrote up theme song and
please also do rate and review the podcast wherever you
listen
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