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Last Week Tonight with John Oliver - Season 13 - Episode 08
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00:00Oh
00:31Welcome, welcome, welcome to Last Week Tonight.
00:34I'm Jolanda, thank you so much for joining us.
00:37We are back, and it has been a busy week.
00:40Eric Swalwell's political career justifiably imploded.
00:43A jury found that Live Nation runs a monopoly,
00:45which is no surprise to anyone who's ever had to deal with them.
00:48And Hungary's Viktor Orban was kicked out of office
00:51with one particular moment in the aftermath
00:53catching everyone's attention.
00:56The shackles are off, and they're dancing to a different tune.
01:00This viral video of Hungary's expected new health minister
01:04encapsulating the party mood.
01:06I love it. Celebrating an autocrat's downfall
01:09by dancing like your drunkest uncle
01:11during the last 20 minutes of a wedding is incredible.
01:14And while I am happy for Hungary, I'm also a bit jealous
01:18because they're getting this guy as their health minister
01:20while we are stuck with this beefy creep
01:23who just this week we learned once cut the penis
01:26off a roadkill's raccoon.
01:27As a purely vibes-based match-up, we have lost heavily.
01:32Meanwhile, our tentative ceasefire with Iran
01:34seems to be holding so far, though as of taping,
01:36the Strait of Hormuz remains in chaos,
01:38with dueling blockades from the US and Iran
01:39causing widespread confusion.
01:41Even the Pope has now seemed to criticize the war, saying,
01:44quote, whoever is a disciple of Christ, the Prince of Peace,
01:47never stands on the side of those who yesterday wielded the sword
01:50and today drop bombs.
01:51It was one of a series of statements that made Trump lose his shit.
01:56First, he posted this screed, which began with,
01:59Pope Leo is weak on crime,
02:01which, in terms of insults, just doesn't work.
02:05It's like saying this possum is weak on Balkan geography.
02:09Okay, but who gives a shit?
02:12It's not a possum's job to correctly place Bosnia
02:15and Herzegovina on a map.
02:16Her job is to eat garbage, hang upside down,
02:19and by this evidence, fuck.
02:21But Trump wasn't done because he then posted this image,
02:24which, understandably, generated fierce backlash,
02:27and his excuse was pretty weak.
02:30Tonight, President Trump is defending his social media post
02:33of this AI-generated image that depicts him as Jesus Christ.
02:38I did post it, and I thought it was me as a doctor,
02:41and had to do with Red Cross as a Red Cross worker there,
02:44which we support.
02:45Oh, that makes sense.
02:46A doctor.
02:47You know how when you go to the doctor,
02:49and you get checked in by a nurse and a few bald eagles,
02:52and then the doctor comes in, and he's wearing an ancient tunic,
02:55and says, when you get you started on antibiotics,
02:57and on orbs of light born from my very skin,
02:59take them with food.
03:00You know, the doctor.
03:03Meanwhile, caught in the middle of all this was J.D. Vance,
03:06who actually has a new book coming out
03:07that's literally about his decision to convert to Catholicism,
03:11with, fun fact, a stock photo of a Methodist church on the cover.
03:15Now, when pressed on the Pope's remarks,
03:18Vance took a bold swing.
03:20When the Pope says that God is never on the side
03:24of those who wield the sword, there is a thousand year,
03:27more than a thousand year tradition of just war theory, okay?
03:31Now, we can, of course, have disagreements
03:33about whether this or that conflict is just,
03:35but I think that it's important,
03:37in the same way that it's important
03:38for the Vice President of the United States
03:39to be careful when I talk about matters of public policy,
03:42I think it's very, very important for the Pope
03:45to be careful when he talks about matters of theology.
03:48Yeah, that is J.D. Vance douche-splaining theology
03:53to the Pope, which is objectively crazy.
03:56It'd be like me explaining to J.D. Vance
03:58where the clit is on a Togo sectional.
04:01Why would I even try to do that?
04:04He spent his life devoted to this very subject.
04:07I'm out of my lane there.
04:09Also, be careful?
04:11The Pope's got a lifetime gig.
04:13He doesn't need to be cautious about what he says.
04:16He could start tweeting,
04:17where's the album at Rihanna every day
04:19for the rest of his life,
04:21and that still wouldn't change the fact
04:22he's considered the Vicar of Christ.
04:24Literally, the only thing he should probably be careful about
04:28is not meeting with J.D. Vance,
04:30because historically, that has been fatal for Pope.
04:33But incredibly, the President still wasn't done.
04:36He reposted this AI image of Jesus hugging him,
04:39which had the caption,
04:40I was never a very religious man,
04:41but doesn't it seem with all these satanic, demonic,
04:43child-sacrificing monsters being exposed,
04:45that God might be playing his trump card,
04:47which for someone who was repeatedly photographed
04:50with society's buzziest child-sacrificing monster
04:54is a bold thing to repost.
04:56And on Thursday, he couldn't resist taking one more swing.
05:00Before leaving for Las Vegas,
05:02the President was asked about his feud
05:03with the Pope over the war.
05:05I'm not fighting with it.
05:06The Pope made a statement.
05:08He says Iran can have a nuclear weapon.
05:10I say Iran cannot have a nuclear weapon.
05:12Pope Leo has never said Iran should have a nuclear weapon,
05:16pressed on whether he would be willing to meet with the Pope.
05:19Trump said...
05:20I don't think it's necessary.
05:21Yeah, I don't really think it's necessary either.
05:24This battle of words has not gone well for Trump.
05:27Plus, I don't think they'd see eye to eye on much,
05:30other than maybe whether it's a good idea
05:31to cover your workplace in more gold shits
05:34that seems physically possible.
05:36The point is, Trump seems to be on an epic run
05:38of picking losing fights,
05:39and whatever air of invincibility he had last year
05:42is fading fast.
05:43All of which is a pretty good reminder
05:45that one day, he is gonna be gone.
05:47And on that day, it will be time to,
05:50as I believe the phrase now goes,
05:52dance like a Hungarian health minister.
05:55And now, this.
05:58And now, local Pittsburgh newscasters
06:01try to pronounce their ballpark's new snack.
06:04The team unveiled a slew of new food options
06:06available at PNC Park.
06:08Some of the new food items include the boracua dog.
06:12The boracua dog brings a bit of Puerto Rican flavor.
06:17A borquia dog.
06:18This is a Puerto Rican-inspired hot dog.
06:21Then there's the boracua dog.
06:25The boracua dog.
06:28The boracua dog.
06:30The boracua dog.
06:31Boracua dog.
06:33They include a boracua dog.
06:35This is this Puerto Rican-inspired hot dog
06:37here with a Pittsburgh twist.
06:43Moving on.
06:44Our main story tonight concerns prediction markets,
06:47the fast-growing platforms where you can bet on
06:49basically anything, as this TikToker explains.
06:51I've been making a ton of money on this app
06:53that lets you bet on anything in the world.
06:55I bet that GTA 6 won't be released on time.
06:57I bet that Trump would pardon Young Thug this year.
06:59I'm predicting Delta Airlines will be the first airline
07:01that sells Zin on their flights.
07:03I made money off Trump being elected president,
07:05and because Kamala Harris didn't go on Joe Rogan's podcast.
07:07When I was in New York,
07:08I bet that it would rain, and it did,
07:10so I won money.
07:10I bet that Justin Bieber will go to the Diddy trial.
07:12When I was in Chicago,
07:13I bet on the temperature and won.
07:15Okay, shout out to that guy, Caden Booth,
07:18for having such a diverse set of interests.
07:20The first half of his bets are strictly Gen Z boy,
07:23Grand Theft Auto, Young Thug, Zin, Rogan,
07:25but the back half is 100% suburban mom.
07:28Potential rain, the temperature,
07:30grisly celebrity trials.
07:32Cade, you contain multitudes.
07:35Prediction markets are basically platforms where you can wager
07:38on the outcome of future events.
07:39The companies decide on the questions to list,
07:42and right now, you can wager on anything from,
07:44will traffic in the Strait of Hormuz return to normal
07:46by the end of April,
07:47to will the US confirm that aliens exist before 2027?
07:51These markets have seen exponential growth in recent months,
07:54logging billions of dollars in bets every week.
07:57You may have heard about them on the news,
07:59or seen ads,
08:00or stumbled across influencers like this guy,
08:02who is constantly updating his followers,
08:04on how his various wages about the Trump administration are going.
08:07And I'll warn you,
08:08it's a real roller coaster.
08:10China question, please.
08:12High-end video chips to China,
08:14but the Wall Street Journal reported yes.
08:16Oh, my hero!
08:17The president has made his position on this very clear,
08:20both to the Chinese,
08:21that's not something we're interested in selling to China.
08:23Yes!
08:25Yes!
08:27Barack Hussein Obama.
08:28Yes!
08:29Yes!
08:30Barack Hussein Obama!
08:32We're getting rich Chuck Jeffrey Epstein.
08:35All the files dropped?
08:36Yes!
08:37Is Donald Trump named in the files?
08:39They're all redacted!
08:41Yeah.
08:42A lot more screaming than you thought there, huh?
08:45And it's kind of amazing to witness someone absolutely furious
08:48that Trump's name was redacted from the Epstein files,
08:50for a completely different reason than the rest of us.
08:53The point is,
08:54a lot of people are getting into prediction markets,
08:57thanks in part to an aggressive marketing push
08:58by the two big players in this space,
09:01Cauchy and Polymarket.
09:02Cauchy recently locked in a $22 billion valuation
09:05from investors, doubling its valuation
09:07from just a few months earlier,
09:09and Polymarket's currently trying to do the same.
09:11Meanwhile, dozens of new entrants,
09:13like Coinbase, Robinhood, and even Truth Social,
09:16are also trying to get in on the action.
09:18It is shocking the extent to which prediction markets
09:20have proliferated, and sometimes it's been a little unnerving,
09:24given the things that you can now bet on.
09:27Ali Khamenei out as supreme leader of Iran?
09:31Will Nancy Guthrie's kidnapper be arrested
09:33by the end of February?
09:36Those are just two events offered on popular prediction markets
09:40in the U.S. over the last couple of weeks,
09:42where people could have put their money down,
09:44betting on the outcome.
09:46There's a lot of bad stuff going on in the world,
09:48and being able to bet on just, like, horrible things like that,
09:52like, when somebody's gonna be found?
09:54Like, that's not, that's really dark to me.
09:58Yeah, he's right.
09:59The impulse to try and make money betting on war
10:02or an unfolding tragedy is really dark.
10:04When someone dies, you're supposed to send their family
10:07a card that says, sorry for your loss,
10:09and not one that says, thanks for covering the spread.
10:12That's just one of many issues associated with these sites.
10:15And given that tonight, let's take a look at prediction markets
10:18and try to answer a few questions that you might have.
10:21Where exactly did these sites come from?
10:23What purpose, if any, do they serve?
10:25And how on earth is any of this legal?
10:28And let's start with the fact that the broad concept
10:30of prediction markets on news events is nothing new.
10:33In the late 80s, economists at the University of Iowa
10:36created the Iowa Electronic Markets as an experiment,
10:39allowing students and faculty to buy and sell predictions
10:41about upcoming elections.
10:43And interestingly, they began to outperform many leading polls.
10:47The theory was that the wisdom of crowds in the form of people
10:50putting actual money behind their opinions
10:52can produce useful forecasts.
10:55And controversial uses of these markets are not new either.
10:59After 9-11, the Pentagon actually flirted with creating a market
11:02where experts could wager on future events,
11:04hoping it could help predict events in the Middle East.
11:07But it quickly got shut down once members of Congress found out
11:10about it and voiced their disgust.
11:13This betting partner on the internet will include wagers,
11:16for example, as the examples on the internet site put up
11:21by the Department of Defense would include,
11:22will Mr. Arafat be assassinated?
11:25Will there be missile attacks from North Korea?
11:28Will the King of Jordan be overthrown, just as an example?
11:32I think this is unbelievably stupid.
11:34It's not only, it is, well, that is a gentle thing to say
11:38about a program that is so devoid of value.
11:41It combines the worst of all of our instincts, in my judgment.
11:45Yeah, he was justifiably upset at the notion of people betting
11:48on geopolitical events that would affect millions of lives.
11:52As we all know, the only groups the society's decided are allowed
11:55to profit from instability are military contractors,
11:58members of the Trump family, and the Mormon wives.
12:01Whitney joined the cast of Chicago on Broadway,
12:04and Taylor gets announced as Bachelorette,
12:05and then notably unannounced.
12:07I don't know how these women do it,
12:08but I cannot stop watching.
12:11The point is, back then, the concept of betting on grim outcomes
12:15seemed beyond the pale.
12:16But everything started changing a few years ago,
12:18when Calci and Polymarket launched as startups,
12:21opening the door to the free-for-all that we have now.
12:24Initially, Calci sought regulatory approval,
12:27and in 2020, it was approved as the first regulated exchange.
12:30But Polymarket went a different way,
12:33launching without approval,
12:34and seeming to be comfortable working outside the rules.
12:36The government actually accused Polymarket
12:38of operating an unlicensed exchange,
12:40and as part of a 2022 settlement,
12:42it agreed to pay 1.4 million,
12:44and block Americans from trading on the platform,
12:46while admitting no wrongdoing.
12:48And it is worth watching Polymarket's CEO,
12:50Shane Copeland, try to spin that penalty.
12:53It was a $1.4 million fine, and also...
12:55It was a settlement.
12:56And you could not have customers in the United States.
12:59Yeah, we had to go and geoblock trading in the US,
13:02and move certain operations offshore,
13:03and it wasn't, hey, you're banned from trading in the US,
13:06it's like, until you're licensed.
13:07I mean, it was breaking the law.
13:08I mean, people say, breaking the law,
13:10it's like, which law, you know?
13:11So, if anything, it's incompatible.
13:14It's incompatible with the law.
13:15Yeah, with the regulatory matrix that existed.
13:18Look, incompatible with the law is clearly ridiculous,
13:21but please don't overlook the line,
13:22people say breaking the law,
13:24and it's like, which law, you know?
13:26I'm sorry, what?
13:28I'm pretty confident there is a specific law you broke,
13:31given, you know, you paid a $1.4 million penalty.
13:34Regulators weren't just like,
13:35shit, he just asked which law?
13:37Oh, uh, the Chinese Exclusion Act of 1882?
13:42From the start, Polymarket took an extremely libertarian approach,
13:45allowing users to use crypto to bet anonymously
13:47on things like war.
13:49And while it's currently rolling out a new app to US users
13:52that does have government approval,
13:54it is way more limited,
13:56and mostly offers trading on sports.
13:58The vast majority of its business
14:00is still done on Polymarket's international version,
14:02which is based offshore in Panama,
14:04and on which American users have to mask their location
14:07if they want to trade.
14:08And while doing that might be a high technological bar
14:12to clear for someone like me,
14:13using a VPN is something anyone under 25
14:16learns to do before they learn how to write a cursive capital G,
14:20mostly because that is an impossible letter
14:22invented by someone who wanted to make children suffer.
14:25It looks like someone's stabbing himself in the stomach
14:28with a pencil,
14:28because that's exactly what trying to write that letter
14:31makes you want to fucking do.
14:33But regardless of how these companies got to this point,
14:37both enjoyed a huge surge of attention
14:39about a year and a half ago after this happened.
14:42Kelshi made a name for itself in the 2024 election.
14:46Just over one week away from election day,
14:48and the race is neck and neck.
14:50It looked close,
14:51unless you were keeping an eye on Kelshi,
14:54which called the race well before the TV networks did.
14:58It was like Kelshi, then Fox, then CNN.
15:01How did that feel?
15:02It was crazy.
15:04Yeah, Kelshi predicted Trump would win,
15:06as did Polymarket, who's CEO then tweeted,
15:09make no mistake,
15:10Polymarket single-handedly called the election
15:12before anything else.
15:13The global truth machine is here, powered by the people.
15:16And while it is not the most important thing,
15:18you have now met the CEOs of these two companies,
15:21and I'm just gonna say it,
15:22they are two of the most extras
15:23in a Totino's Pizza Rolls commercial looking motherfuckers
15:26I have ever seen in my life.
15:28Anyway, since then,
15:30they've both been scrambling for market dominance,
15:33which is why Kelshi, for instance, has run TV ads like this.
15:36Indiana gonna win, baby!
15:38We're in Florida asking people what they put their money on!
15:41I'm all in on OKC!
15:43Indiana got that dog in them!
15:46Will egg prices go up this month?
15:48I think we'll hit $20.
15:50How many hurricanes do you think we'll have this year?
15:52Ah!
15:53Kelshi!
15:54Kelshi!
15:55Kelshi!
15:56Kelshi!
16:00OK, that visual cacophony is an AI slop atrocity.
16:11It contains two alligators,
16:12four shirtless or nearly shirtless old guys,
16:14one egg freak,
16:15three different people being pursued by the police,
16:18one woman I'm kind of rooting for,
16:20one USDA inspector's fucking nightmare,
16:22and one alien seemingly rooting for Duke,
16:24which honestly tracks.
16:25And the whole thing ends with,
16:27the world's gone mad, trade it.
16:29Although, given everything that came before,
16:31a more honest tagline might have been,
16:33fuck empathy, get money, Kelshi.
16:35And again, that is the one that likes to present itself
16:38as the more button-down, rule-abiding company of the two.
16:41And at this point, you might be thinking,
16:43wait, isn't that an ad for a gambling site?
16:46But both Kelshi and Polymarket will fiercely argue
16:49that that's not what they are at all.
16:51They argue that gambling involves playing against the house,
16:54while their users are trading against each other,
16:57with the companies typically just charging a fee on trades.
17:00They'll also insist that they're simply modern versions
17:02of commodity futures markets,
17:04which have been around for over a century.
17:06If you're not familiar with them,
17:07they're a place where people can speculate
17:09about the future price of things like corn or natural gas.
17:12And crucially, they will argue that the bets they sell
17:15are financial instruments that enable ordinary people
17:17to hedge against future risks,
17:20like betting that, say, a hurricane will hit,
17:22or that the US government will shut down.
17:24Here is how Kelshi's CEO frames it.
17:27We had a market about whether student loan
17:29are gonna be forgiven or not this year,
17:31and so a lot of people were hedging using that market.
17:34And so if it wasn't forgiven,
17:35they would get paid some amount of money
17:36that they could use to basically pay the student loan.
17:39And that's why this is very important.
17:41Right, apparently, they're just trying to help people
17:43make wise planning decisions.
17:45It's the kind of responsible financial thinking
17:47that you intuitively associate with a company
17:49that advertises itself with a shirtless old man being arrested,
17:52or an alien pledging Sigma Chi.
17:55And look, that might make some sense
17:58when you're talking about an economic indicator
18:00or a specific event that might impact you personally.
18:03But what exactly is the financial loss
18:05that I'm hedging against if I bet on the next
18:07winner of the masked singer,
18:09or on whether or not Mr. Beast will say feastable?
18:12And when you watch some of Kaushik's actual customers in action,
18:16the notion that this is about sober risk management
18:19feels absurd.
18:21I'll tell you, if I didn't win this election,
18:23and if you had a moron like Kamala,
18:25or a moron like Sleepy Joe...
18:31Here we go.
18:32Bang!
18:33There we go.
18:34Bang! Number one, Sleepy Joe.
18:36That's a hit. We're looking good so far.
18:38Easy, bro. Okay, all right, all right, all right.
18:40We made about 200 bucks.
18:42Okay, all right.
18:43200 bucks.
18:44Men playing in women's sports.
18:45Wait, wait, wait.
18:47Transgender.
18:47Hey!
18:50Hey!
18:51We are off to a risk.
18:52Yeah, we hit on that shit immediately.
18:55Sleepy Joe, transgender.
18:56We got Sleepy Joe, transgender in like the first five minutes, bro.
19:00Bro, we're up like 500 bucks.
19:02We gotta make a thousand.
19:03Yeah, we gotta make a thousand.
19:04Okay, all right, all right.
19:06I have no... I couldn't even tell you what the f*** this man is saying.
19:10Like, he just says a soup of random words.
19:12Somehow Joel is just deciphering this and just making money.
19:16Yeah, that is not using a financial instrument to hedge risk.
19:20It's taking advantage of a sundowning geriatrics
19:23rapidly declining verbal abilities.
19:25Oh, you bet he's gonna say the word nasty?
19:28Great guess, dude.
19:29It's one of the last 200 words he has left.
19:33Honestly, that clip is unsettling on multiple fronts.
19:35One, because the president's harmful rhetoric
19:37is being divorced from its actual meaning.
19:39But two, because that's not what these bros are supposed to be doing.
19:43They shouldn't be betting on Trump speeches.
19:45They should be sitting on that same couch
19:47and watching YouTube highlight reels of Kevin Love outlet passes,
19:50six modellos in, forging a deep, beautiful friendship
19:53that will last for 40 years and that they will never ever discuss.
19:57Nature has lost its course.
19:59The point is, that sure looks like gambling.
20:03And it is pretty telling that while political mentions markets,
20:06like that, get a lot of attention,
20:08around 90% of trading volume on Kaoshi is on sports.
20:12But you can see why these companies are so insistent
20:16that they are not gambling sites.
20:18Just 39 states, DC, and Puerto Rico
20:20have some form of legalized sports betting.
20:22With only 32 of those allowing online gambling,
20:26leaving some pretty attractive mega states, like California and Texas,
20:29on the table.
20:30And by insisting they are financial exchanges offering not bets,
20:34but event contracts, prediction markets are not only able to operate in states
20:39where gambling isn't legal, but also get around state taxes
20:42and minimum age requirements in states where it is.
20:46And they've sometimes talked out of both sides of their mouth on this,
20:49because in ads like this one, Kaoshi's called itself
20:51the first nationwide legal sports betting platform.
20:54But, when asked about it, it later tried to qualify that statement saying,
20:58the bet language is only used in the sense that any financial position
21:02can be considered a bet on the future.
21:05And that is so dumb, it is almost charming.
21:08It's like seeing a side outside a strip club that says,
21:11girls, girls, girls. And then seeing the manager come out and say,
21:14we meant girls, girls, girls who code.
21:16We support women in STEM.
21:18Sure you do, buddy.
21:20Nice try.
21:22But these companies' insistence that they are not gambling platforms
21:26is actually one of the two most irritating claims that they tend to make.
21:29The other is that they're actually incredibly important to society,
21:33because they can help us more accurately predict the future.
21:36The head of Polymarket's even called it the most accurate thing we have as mankind right now,
21:41and has bragged that the predictions it generates can save lives.
21:45When I get hit up by people in the Middle East who are saying that,
21:50hey, you know, we're looking at Polymarket to decide whether we sleep near the bomb shelter.
21:55Like, we look at it every day and I'm like, oh, it's really that popular over there?
21:57Like, are you kidding me? Like, do you not even know what's going on?
22:00Like, everyone's relying on this. Um, that's very powerful.
22:05That's like a, you know, an undeniable value proposition that did not exist before.
22:12Hey, quick question. What exact stage of capitalism are we in when the child CEO of an
22:18offshore gambling platform refers to betting odds on bombings as an undeniable value proposition?
22:23Because it feels like we're in palliative care at this point.
22:27But I guess that is the point you reach when you're a 27-year-old billionaire
22:30surrounded by yes-men who will never tell you the truth, something I know for sure,
22:34because no one in his life told him never to ever wear that jacket.
22:39Which, when he is sitting like that, unmistakably says,
22:42peed Ryder.
22:43Though, for all the talk of these sites' unparalleled accuracy,
22:47you should know that's a bit of an oversell.
22:49They have shown promise in some areas. A recent paper found Cauchy's predictions were
22:53roughly consistent with those of professional forecasters when it came to the economy
22:57and Federal Reserve policy. But they've also had some big misses.
23:02For instance, both favored the Chiefs to win last year's Super Bowl,
23:05and also whiffed the recent Texas Republican Senate primary,
23:08with Polymarket even posting a breaking alert that morning, announcing Ken Paxton was projected to win,
23:14with their odds giving him an 83% chance, and, you know, he didn't do that.
23:19And look, all of that would be fine. These are just odds, and real life can defy odds.
23:25Were it not for the fact that these companies are actively selling themselves as basically oracles.
23:30And they've even tried to bolster that reputation by entering paid partnership deals with news organizations.
23:37Dow Jones, parent company of the Wall Street Journal, announced a partnership with Polymarket
23:42earlier this year, while CNN, CNBC, and Fox News all signed deals with Cauchy,
23:47which even sponsors segments on CNN that feature Cauchy's odds on various future events,
23:53scrolling across the bottom of the screen. And I do not want the CNN ticker to have betting odds
23:59on news events. I don't really want anything on there except maybe the odd distractingly weird
24:04headline that takes my mind off things for a second. You know, something like,
24:06Giraffe escapes from zoo, please say it has a gun. You know,
24:11something fun to Google later. But having their logo like that on CNN is a big win for Cauchy.
24:20Just as it's a big win for them to have influencers like that guy from earlier saying how easy it
24:25is
24:25to win money. Though you should know, after we asked, Cauchy told us that they paid him for that post.
24:31And it feels like deals like those should really be more transparent. It makes me a little annoyed,
24:35and to be honest, even more hungry. And you know, when I need something nutritious, yet in a can,
24:40I know where to turn. Bush's baked beans.
24:45But full disclosure, I was paid $40 to say that.
24:49The thing is, it's worth knowing that in reality, as with sports books,
24:53researchers have found that most users of Cauchy and Polymarket lose money.
24:58As we've discussed before, casual gamblers are always going to be easy prey
25:02for more sophisticated operators with advanced systems to give them an edge,
25:06which is probably why. While Polymarket has more than two million users,
25:11one analysis found more than two-thirds of all money won on it was held by just 740 accounts.
25:18And if you're thinking, how exactly are these companies getting away with all this?
25:23Well, a lot has to do with who is in the White House right now.
25:27Both companies have fostered strong connections with the Trump family.
25:30In fact, Don Jr. is both an investor in and an unpaid advisor to Polymarket,
25:34and a paid advisor to Cauchy. And look, I am not saying that Don Jr. isn't providing
25:40important or valuable insights. Although, in a much truer sense, I very much am saying that.
25:46I'm just saying, it's notable just how hard it was for Cauchy's CEO to answer a series of
25:51basic questions about Don Jr.'s role.
25:54Why did you guys make Donald Trump Jr. a strategic advisor?
25:58We have a lot of advisors.
26:00Mm-hmm.
26:00Um, and they span across the board, across different functions.
26:05Um, but really, this is all about growing this industry,
26:09the prediction market industry that a lot of people really believe in.
26:12What kind of advice does he give you?
26:14So, it really is, again, about growing prediction markets.
26:17You know, he believes in prediction markets, we believe in prediction markets.
26:20A lot of people believe in prediction markets, and it's really about go to market and expansion plans.
26:24Does he come to meetings? How much do you pay him? What's his role?
26:28I mean, this is the son of the president.
26:30We, again, I mean, we have a lot of advisors, and whether it's our investors,
26:33whether it's, uh, people that we really trust and respect, whether people...
26:36He's not just any advisor. He has a direct line to the White House.
26:41We have a lot of advisors.
26:43Yeah!
26:44Turns out, it's pretty hard to justify hiring a Nepo baby, or in Don Jr.'s case, a Nepo divorced dad.
26:50But the thing is, if hiring Don Jr. helped get these companies on Trump's good side,
26:55it's a bet that's paid off massively for them.
26:58Because while the Biden administration had at least tried to rein in some of what these markets were doing,
27:02the Trump administration has gone hard in the other direction.
27:05And to understand the degree to which that's the case,
27:08take a look at the CFTC, or Commodity Futures Trading Commission.
27:12It regulates these platforms.
27:13It was actually empowered under the Dodd-Frank Act in 2010,
27:16to block event contracts about terrorism, assassination, war, and gaming.
27:21You know, a bunch of what you've seen so far tonight.
27:24But it is clearly not doing that, and it doesn't even seem to be trying.
27:28In fact, while the CFTC is supposed to be comprised of five commissioners,
27:31two of whom are required to belong to the minority party,
27:35it currently only has this guy, Michael Selig, a Trump appointee,
27:39who's a massive cheerleader for this industry.
27:42He completely buys into their whole, this is all about hedging risk argument,
27:47to the point that he once suggested that somebody with a medical condition
27:49could manage the potential risk of having a future treatment or medical costs
27:53by placing a bet on the likelihood of something passing a drug trial.
27:57Which is, and I don't say this lightly, one of the most fucked up suggestions
28:01I have ever heard for this country's Guernica ass healthcare system.
28:06And while Selig's recently made noises about stronger enforcement,
28:09it is hard to take him at his word, given that during his confirmation hearings,
28:13he told Congress he let courts decide whether these companies constitute gambling.
28:18But in office, he's done the exact opposite of that.
28:21In fact, more than a dozen states are currently suing prediction markets,
28:24but rather than let that play out in the courts, like he promised,
28:29Selig posted this video.
28:39What a fucking weasel.
28:42That guy has both the energy and fashion sense of a suits villain
28:46who goes toe-to-toe with Harvey and Mike all season long,
28:49while Lewis and Meghan Markle, I don't care what you say,
28:51that's a character named to me, watch on.
28:54But he's done more than just threaten.
28:56Selig's led his agency to sue three states to get them to back off
29:00trying to regulate prediction markets.
29:02So right now, these companies are able to operate under extremely friendly conditions.
29:07And given that, it's worth looking at some of the problems that have already begun to emerge,
29:11starting with the fact that for a lot of these bets,
29:13it is incredibly easy for individuals to manipulate the outcomes.
29:17Some have even joked about that.
29:19For instance, on a recent earnings call, the CEO of Coinbase said this.
29:22I was a little distracted because I was tracking the prediction market
29:25about what Coinbase will say on their next earnings call.
29:28And I just want to, you know, add here the words,
29:32Bitcoin, Ethereum, Blockchain, Staking, and Web3,
29:36to make sure we get those in before the end of the call.
29:39Yeah, he saw people's bets online and just rattled off words that they bet on him saying.
29:44And it really feels like manipulating betting outcomes should be more difficult than that.
29:49In the old days, you at least had to sneak cocaine to a racehorse,
29:53not just rattle off a list of the most punchable words in the English language.
29:58We even realized while researching this piece that there was betting happening around this show,
30:03specifically on what words I'd say during our show on February 22nd,
30:07which is stupid for multiple reasons, including that we tape on Saturday in front of a studio audience,
30:14all of whom would then have a massive information advantage and more than 24 hours before the betting window closed.
30:21Now, thankfully, we wipe every audience member's memory before we let them out of the taping.
30:26We try to erase only the last couple of hours, but sometimes we do wipe clean a milestone birthday.
30:32That's on us, and we're constantly calibrating the technology.
30:35You've been warned. You won't remember, but you've been warned.
30:39And there are markets where it is way too easy for anyone to manipulate outcomes.
30:44Just last summer, you might remember a bunch of assholes started throwing dildos on the court
30:49during WNBA games to promote a crypto meme coin. And if that wasn't already a cursed enough sentence,
30:56I'll let this South African man fill you in on what happened next.
30:59Did you know you can actually bet on whether a dildo will be thrown at the WNBA game on August
31:079th,
31:09August 11th, that's today, and August 12th, right here on potting market?
31:15I had no idea. Actually, I had no idea what the WNBA was either until, you know,
31:22you could place a bet on whether a dildo would be thrown at it.
31:25Yeah, none of that is great. And it is pretty depressing that the way he learned about the
31:30existence of the WNBA was finding out you could bet on whether a dildo would be thrown at one of
31:35its games. It'd be like finding out about the existence of Robert De Niro by googling
31:39the cast of Dirty Grandpa. Oh, no. No, not like this. Don't learn about him like this.
31:47But it is true. People started betting whether dildos would be thrown again,
31:52and Polymarket even put up this tweet promoting the bets. And sure enough, more dildos got thrown.
31:59And that could well have been because Polymarket had just created a situation where you could
32:03easily make money by betting someone would throw a dildo, and then going to a game with a dildo,
32:09and throwing it. There have also been multiple instances of people seeming to use inside
32:14information to gain these markets. Last year, a trader made over a million dollars with a series
32:19of accurate bets about Google's rankings of its most searched people of 2025. That same person,
32:24by the way, had also earned over $150,000 by correctly predicting the exact release date
32:29of Google's Gemini 3 model. Which really makes you think that that person either worked for Google,
32:35or knew someone who did, or maybe managed to hack Google from the outside. In which case,
32:41would it kill you to do a Google doodle for my birthday? It is on Thursday, by the way.
32:47And Polymarket's CEO has in the past openly celebrated the fact that this kind of thing
32:51can happen on his platform, because he's argued it just makes its prediction abilities that much
32:57stronger. What do you guys do, if anything, to basically guard against insider trading?
33:02Yeah. So, it goes back to this idea of information markets, right? Like, you think about,
33:09when will Gemini 3 launch? Nobody is under the impression that nobody knows the answer,
33:15right? Like, of course, there's people who are working on it who know when it's going to come.
33:18And I think what's cool about Polymarket is that it creates this financial incentive to go,
33:24for people to go and divulge the information to the market, and the market to change,
33:28and all of a sudden it's trading at 95 cents, and people are like,
33:30I mean, when you say divulge, you mean the people who actually know?
33:33Yeah. Or someone tells someone, and then the market responds.
33:36Yeah. He basically just answered the question, how do you guard against insider trading there,
33:41with no? And he did it with a fashion choice somehow even worse than his biker jacket,
33:47because what in the NYU army fatigues is that shit? That sweater looks like it was made from
33:54illegally poached grimace. But also, I don't care how many statement sweaters you wear,
33:59or how many Ben Platt and Dear Evan Hansen haircuts you have. You're not describing some edgy, chill way to
34:06divulge information to the market. You're describing insider trading. And it gets genuinely chilling,
34:11when you realize that people seem to be using insider info to bet on life or death events.
34:16In January, after the US seized Nicolas Maduro, an anonymous trader pocketed more than $400,000
34:22off bets that that would happen, with the bulk of those bets made mere hours before the raid was announced.
34:28In February, two Israelis were charged with using classified military information to place bets on
34:32polymarkets, and in March, this happened.
34:35Deadly American strikes, and some people may have made money from them.
34:40More than a dozen anonymous accounts placed bets predicting that the United States would
34:44strike Iran by Saturday the 28th of February. Most of those wages were placed in the hours before
34:50the first bombs fell. And many of the accounts had been created only days earlier. One of the biggest
34:56winners used the account name Maga My Man. The trader placed $87,000 on a wall with Iran exactly 71
35:04minutes before the first strike, winning a jackpot worth $515,000.
35:10Yeah, that sure feels like someone with inside information was betting on Polymarket, and I'd say
35:15that it wasn't a great idea to make their username Maga My Man, except it doesn't seem to matter
35:21anymore, does it? His username might as well have been Maga My Man, just kidding, my name is Dylan
35:25Bathwell, and I work at the Department of Defense. He's not really risking much.
35:29Now, I should say, Cauchy just announced it took action in two insider trading cases, and has taken out
35:34billboards bragging that it bans insider trading, and also that it doesn't offer death markets,
35:40which is a little weird. It'd be like McDonald's putting up ads that its nuggets don't contain
35:45baby meat. Okay, mama, but now I have way more questions. For its part, Polymarket recently updated
35:53its rules to clarify that users can't act on stolen confidential information, wager using illegal tips,
35:59or bet if they're in a position to influence the outcome of an event. Although, it is not a great
36:04sign
36:05that just recently, there was a suspicious spike in trading, right before the ceasefire with Iran
36:09was announced, as a group of new accounts on Polymarket made highly specific, well-timed bets
36:15about it, earning hundreds of thousands of dollars. So it sure seems like right now,
36:20we've effectively got gambling sites operating even in states where gambling is illegal,
36:25and offering bets on things that they've been laws against for over a decade now. So what can we do?
36:31Well, at the bare minimum, the CFTC should be doing more. And while it says it's writing new rules,
36:37I wouldn't expect much, especially for as long as this fucking guy is in charge.
36:42As I said earlier, there are a bunch of cases making their way through the courts right now,
36:46but it's not clear how they'll resolve, and it's probably going to be in front of the Supreme Court.
36:50Meanwhile, Congress is considering a number of proposals tackling aspects of this issue,
36:54although, given that the President of the United States has a kid currently advising both major
36:59companies, I wouldn't hold your breath. So meaningful policy shifts in the near term
37:04do seem unlikely, but at some point, we do need to put in place some basic guardrails here,
37:10and until then, if we can't change how these sites operate, we should at least try and change
37:16how we individually see them. One thing that would frankly help is if news organizations
37:21stopped laundering these companies' reputations for them by putting their odds on screen like
37:26they are actual news, because is it a bad idea for them to be doing that? If I may quote
37:31the
37:31single loudest man in the world.
37:36Yes, exactly. I couldn't have screamed it better myself.
37:40And look, on a personal level, if you're considering using these markets to gamble,
37:45try and remember that you are statistically likely to lose money. And while I am not
37:50against gambling per se, there is something so grim about these sites turning every aspect of our
37:56lives into a bet, because sure, money can be won on them, but in that happening,
38:01something also gets lost. Specifically, a society where things aren't only weighed in
38:05in financial terms and where people engage with news for what it means to human beings,
38:10not just because they have $50 riding on it. And when something unexpected happens in the world,
38:15it would be really nice not to have to automatically question whether it's only
38:19because someone is trying to move a market. That is why I'm going to make you a promise tonight.
38:24I will never do anything because someone online placed a bet on it. So you can be confident
38:29that if I ever say Bitcoin, Ethereum, blockchain, staking and Web3, it won't be because I'm trying
38:35to move markets. It'll be because I'm having a stroke. And once you have that trust, you can feel
38:42secure in the knowledge that if a dildo ever lands on this desk, it's not because someone had a secret
38:48wager on it. It's because we weren't sure how to get out of a 32-minute segment on a quasi
38:53-legal
38:53gambling industry. But we knew that a thrown dildo in the right circumstances, and with the full
38:58consent of the person having it thrown at them, would be undeniably funny. And if more than one
39:04dildo lands, it's only because a fundamental rule of comedy is, more dildos is more funny.
39:11And if it turns out, there are too many dildos flying through the air. I promise it will only
39:16be because we didn't know how many to buy, and now we're sort of screwed, because I don't think
39:21you're allowed to return them. That is our show. Thank you so much for watching. See you next week.
39:26Good night. This is, this is just too many dildos.
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