00:00Here in the U.S., prediction markets have absolutely taken the country by storm.
00:04You just need to look no further than the advertisements that we're seeing
00:07and what lawmakers are saying about calcium poly market.
00:10How do you make a dent in the U.S. industry?
00:14Well, it's really exciting that prediction markets, they've been around for 30, 40 years.
00:18They're not new.
00:19Like I said, prediction markets going back all the way to the Iowa election markets,
00:23which was started as an academic experiment out of the University of Iowa.
00:27They've been around for decades now.
00:29What's new is the amount of money that's coming into this industry,
00:32especially from the sports side of things,
00:34but also this financialization of everything is adding to the froth of the industry.
00:40And what we're really excited about is bringing a regulated approach to this industry.
00:45We think some of the competitors in this space are getting a little bit over their skis
00:49and offering some markets that they shouldn't be offering.
00:51They're quite new in this space,
00:53and we think a company like SmartKets brings a mature approach to the industry.
00:57Who's offering what that you see they should not be offering?
01:00Name names here.
01:01Well, there's companies out there that are offering mentioned markets.
01:05For example, mentioned markets, I think, are in poor taste.
01:08Just because you can offer a market doesn't mean you should offer a market.
01:12That example that you gave about Jay Powell, the Harvard student, asking the question,
01:16I think it is a good example of a market that you shouldn't offer because there's not much utility in
01:20it,
01:20and it's not very interesting.
01:22Prediction markets have a lot of power to it.
01:24There's a lot of energy around this space,
01:26and I think it's something that people should be taking seriously, operators and regulators.
01:31So as a prediction market operator in the U.K.,
01:34your mantra for all the problems and the friction that are cropping up potentially in the U.S.
01:39is regulation, not a ban.
01:41So just compare and contrast briefly the regulatory environment in the U.K.
01:46versus what we have in the U.S.
01:48Well, in the U.K., they have something called the Gambling Commission,
01:51which regulates betting exchanges.
01:53That's the U.K. name for prediction markets,
01:55and it operates very similar to the way that the CFTC is regulating the space.
01:59So it's called a betting intermediary,
02:02basically a place for people to trade bets with each other.
02:05That's a regulatory framework.
02:06It's been around for 20, 30 years.
02:08It's well-trodden.
02:09They have insider trading rules.
02:11It's a criminal offense to trade on insider information.
02:14Operators take it seriously.
02:15The police take it seriously.
02:17I also want to say that I think the CFTC,
02:20even though the binary options around events is new,
02:23the CFTC has been around in various forms for over 100 years,
02:26and they have insider trading rules.
02:28And I think what is going on is people aren't familiar with this space,
02:31but there's actually a lot of rules in this space that already handle insider trading,
02:35whether it's material non-public information
02:37or easy-to-manipulate contracts.
02:39And I think it's just about following the rules that are already down.
02:43I don't think we need new regulation in this space.
02:45I think we just need to enforce existing regulation.
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