00:00Well, prediction platforms Calci and Polymarket have become the titans of an exploding new wave of prediction markets
00:06with valuations in the billions, partnerships with leagues like the NHL, and some of the biggest troll accounts on social media.
00:13So why have these platforms used unorthodox social media strategies to become such big business?
00:19And should sports betting platforms like FanDuel and DraftKings be worried about their growth?
00:24So let's dive into all of this. Let's bring in FOS Editor-in-Chief Dan Roberts.
00:27So before we get into some of the strategies, and there's a lot of them here, obviously, Dan,
00:31let's talk a little bit about how these two have exploded so fast onto the scene right now.
00:37Yeah, well, a huge milestone moment, watershed moment, of course, was Polymarket having that Trump would get re-elected
00:43really before that was bubbling up anywhere.
00:46It looked very like it happened based on how people were betting on Polymarket.
00:50Oh, don't call it betting. It's predicting. It's prediction markets.
00:54But Polymarket really touted that as a win. Now, that was in politics.
00:57In the years since, both Polymarket and Calci have really exploded in usage, awareness, investment money raise.
01:04They just keep raising. Just today, Calci raised another billion dollars in funding, bringing its valuation to 11 billion.
01:10So both these companies have $10 billion-plus valuations.
01:13There are people using them, although, of course, Polymarket technically isn't usable in the U.S.
01:18So how are people doing it? You just do it through VPN.
01:21But expected to relaunch very soon in the U.S.
01:23Calci is in the U.S.
01:24Both have been given the green light by the CFTC under the Trump administration.
01:28So shortest answer is it started in politics, and that's still a huge part of their volume.
01:32But both have really pushed hard into sports.
01:34And their success is pushing all these big dogs who are established in the betting world to say or actually launch prediction markets.
01:42You know, DraftKings, FanDuel, FanDuel, FanDuel says it wants to launch one, Crypto.com launched one, Trump's own media company, TrueSocial, part of the Trump media company portfolio is launching one or has launched one.
01:54Suddenly, everyone wants in.
01:55But, of course, they're not all going to succeed, right?
01:57We can't support 30 different prediction markets.
02:00Well, so we'll get to all of that, which is really fascinating.
02:03But I want to talk quickly about the investors, because I believe it's Calci that had a huge investment from ICE, who owns the New York Stock Exchange.
02:09Polymarket has.
02:10Oh, it's Polymarket.
02:10Thank you, thank you, thank you.
02:12What's sort of the genesis as to why big VCs like the New York Stock Exchange see with these platforms compared to the FanDuel's and the DraftKings?
02:21Like, where do they see sort of the upswing to invest in these companies?
02:24Well, this really started in the crypto world.
02:26I mean, Polymarket is the one that was a crypto-native company, and you can only place your bets in crypto.
02:30And so a lot of the investors in both are from the crypto space.
02:34Calci's big dog is A16Z and Dresen Horowitz, which has a huge crypto portfolio.
02:40You know, both of them, now Calci is about to start allowing crypto as the form of currency.
02:46So they're going more into crypto, whereas that was kind of Polymarket space.
02:50So that's why you see a lot of investors from, like, the Web3 space.
02:53And when you look at the social media voice, which we can get into, I liken it to degen culture.
02:57It's a degen thing.
02:58It's not just crypto people.
03:00It's the terminally online.
03:01It's the same people who were pushing GameStonk and the stock revolution during the pandemic.
03:06So there's a coalescing here of multiple spheres, right?
03:09It's the VCs who are pro Web3, crypto.
03:13They kind of went hard on all that stuff during the pandemic.
03:16AI, you know, those same investors.
03:18There's a lot of overlap in the Venn diagrams here.
03:21It's sports.
03:21It's betting.
03:22It's crypto.
03:23It's the terminally online.
03:24And it's the young, it's young degens, you know?
03:27Okay, so you, before we get into some of the social media strategies and stuff like that,
03:31I believe Donald Trump Jr. is an advisor to both of these companies.
03:34Yeah, which kind of seems like, huh?
03:36Right.
03:37How can you be an advisor to the two main direct competitors?
03:39And then the other thing I think is interesting is the Biden administration had fought for sort
03:44of the legalization of these companies for their entire tech.
03:47And fought against it.
03:48And fought against them from being, you know, available for people to use.
03:51And basically, they are now allowed to do this because the Trump administration decided
03:55to not continue to take up the government's previous case on them, correct?
03:59That's exactly right.
04:00So under the Biden administration, the CFTC is the one that banned Calci from operating
04:04in the U.S.
04:05And then Calci challenged that.
04:07One, while it was still Biden, the Biden administration said, we're going to appeal that ruling.
04:12You know, Calci's win.
04:13And then, oh, Trump gets elected.
04:14Right.
04:15And we know that Trump is pro-crypto, pro-tech, you know, rah, rah, all that.
04:19Look, just yesterday in the Times, a big profile of David Sachs, the VC turned crypto czar and
04:24AI czar.
04:26Very friendly with the White House.
04:27So the Trump administration, CFTC said, okay, all good.
04:30We are not going to continue that appeal that the CFTC was going to do under the Biden.
04:34We dropped the appeal.
04:35Calci is able to launch in the U.S. again.
04:37Polymarket has been explicitly given the green light.
04:39They're about to launch in the U.S.
04:40And they've been out of the U.S. for two years or more.
04:42And part of this, too, is that, you know, they're buying the argument prediction markets make.
04:47And the argument is, we are distinct from sportsbooks.
04:50We're not sports betting.
04:51When you place a bet, oh, don't call it a bet, on whether, you know, the Pats are going to
04:55beat the Giants on Polymarket or Calci, it's actually an events contract.
05:00It's like trading futures options, okay?
05:02So they liken it more to a financial instrument and say that we're more like a stock exchange
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