00:00What do we got here, Sam? I mean, this is surprising to me. A social media website now wants to launch prediction markets just like Kalshi and Robinhood. And I guess my answer to this is why not, right? I mean, if all these companies are running it and making money, may as well try.
00:17Yeah, this isn't just any social media website. This is Truth Social, the social media platform that President Trump created after he was banned from Facebook and Twitter following the January 6th attack on the U.S. Capitol.
00:31They announced yesterday that they're now going to have prediction markets on Truth Social via a partnership with Crypto.com, which is a CFTC registered exchange.
00:41It's going to be called Truth Predict, and it will take bets not just in all 50 states, but worldwide, it says, on political elections.
00:49So those are elections potentially involving Donald Trump or people related to him, interest and inflation rate changes, the price of gold and crude oil, and of course, events across all major sports leagues.
01:02You know, half a dozen states have already filed lawsuits against this, alleging that this is actually unlicensed and illegal gambling that operates outside of the high bar of regulation that has been left up to the states.
01:14But meanwhile, companies like Kalshi, Polymarket, and in this case, Crypto.com, have argued that this is all perfectly fine as long as the CFTC doesn't stop it.
01:23Now, Trump, of course, is, you know, part of Truth Social. He also dictates who runs the CFTC.
01:29He had actually nominated a current Kalshi board member to head the agency, but he pulled that nomination after some emails came to light following a FOIA investigation, kind of questioning that nominee's ties to Kalshi.
01:42And, you know, of course, his son, Donald Trump Jr., is also a board member on Kalshi, as well as Polymarket.
01:49So the Trump family now kind of has ties to all three of these leading prediction markets, with Crypto.com being the latest.
01:55So these are companies that, you know, just really started offering sports prediction markets, I believe, five days after Trump was inaugurated.
02:02And since then, they haven't looked back. You've had companies like Kalshi, which are now nearing a $10 billion valuation, when at this time last year, they were worth only about $800 million.
02:13Same with Polymarket, which is eyeing a $15 billion valuation.
02:17And they've really credited this all to sports prediction markets, being able to offer basically sports betting without any guardrails, any taxes, licenses and fees in all 50 states.
02:27So now this is kind of the latest development in potential conflict of interest with, you know, the president being in charge kind of of the regulation of this, which hasn't really happened, and also benefiting from it as well.
02:38So I'm sure this is not the last we'll hear about a, you know, social media partnership with one of these prediction markets.
02:45They don't seem to be going away anytime soon.
02:47And, of course, DraftKings and FanDuel, meanwhile, are preparing to launch them in case they stay for good.
02:53But states have also threatened to revoke their betting licenses if they do.
02:56So it's another wrinkle in this whole mess of prediction markets.
02:59But, you know, the story becomes more kind of more fishy as we move on.
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