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Last Week Tonight with John Oliver - Season 13 - Episode 08
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00:31Welcome, welcome, welcome to Last Week Tonight.
00:34I'm Jolom and 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 Life 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 wacoo.
01:27As a purely vibes-based matchup, 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
01:37with dueling blockades from the US and Iran
01:39causing widespread confusion.
01:41Even the Pope has now seemed to criticize the war,
01:44saying, quote,
01:44whoever 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
01:53that 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.
02:20Oh, but Trump wasn't done
02:23because he then posted this image,
02:24which, understandably, generated fierce backlash,
02:27and his excuse was pretty weak.
02:30Tonight, President Trump is defending
02:32his social media post of this AI-generated image
02:35that depicts him as Jesus Christ.
02:38I did post it, and I thought it was me as a doctor
02:40and 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,
02:53and he's wearing an ancient tunic and says,
02:55we're going to get you started on antibiotics
02:56and 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
03:05was J.D. Vance,
03:06who actually has a new book coming out
03:07that's literally about his decision
03:09to convert to Catholicism,
03:11with, fun fact,
03:11a 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
03:22that God is never on the side of those who wield the sword,
03:25there is a thousand-year,
03:27more than a thousand-year tradition
03:29of just war theory, okay?
03:31Now, we can, of course,
03:32have 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
03:40when I talk about matters of public policy.
03:43I think it's very, very important
03:44for the Pope
03:45to be careful
03:46when he talks about matters of theology.
03:48Yeah, that is J.D. Vance
03:50douche-splaining theology
03:53to the Pope,
03:55which is objectively crazy.
03:56It'd be like me
03:57explaining to J.D. Vance
03:58where the clit is
03:59on a Togo sectional.
04:01Why would I even try to do that?
04:04He spent his life
04:05devoted 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
04:15about what he says.
04:16He could start tweeting
04:17where's the album
04:18at Rihanna every day
04:19for the rest of his life
04:21and that still wouldn't change the fact
04:22he's considered
04:22the Vicar of Christ.
04:24Literally the only thing
04:26he should probably be careful about
04:28is not meeting with J.D. Vance
04:30because historically
04:31that has been fatal for Pope.
04:33But incredibly,
04:34the President still wasn't done.
04:36He reposted this AI image
04:37of Jesus hugging him,
04:38which had the caption,
04:40I was never a very religious man,
04:41but doesn't it seem
04:42with all these satanic,
04:43demonic, child-sacrificing monsters
04:44being exposed
04:45that God might be playing
04:46his trump card,
04:47which for someone
04:48who was repeatedly photographed
04:50with society's
04:51buzziest child-sacrificing monster
04:54is a bold thing to repost.
04:56And on Thursday,
04:57he couldn't resist
04:58taking one more swing.
05:00Before leaving for Las Vegas,
05:02the President was asked
05:03about 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,
05:08Iran can have a nuclear weapon.
05:10I say,
05:11Iran cannot have a nuclear weapon.
05:12Pope Leo has never said
05:14Iran should have a nuclear weapon,
05:16pressed on whether he would be
05:17willing to meet with the Pope.
05:19Trump said...
05:20I don't think it's necessary.
05:21Yeah.
05:22I don't really think
05:23it's necessary either.
05:24This battle of words
05:25has not gone well for Trump.
05:27Plus,
05:28I don't think they'd see
05:29eye to eye on much
05:30other than maybe
05:30whether it's a good idea
05:31to cover your workplace
05:32in more gold shits
05:34that seems physically possible.
05:36The point is,
05:37Trump seems to be
05:37on an epic run
05:38of picking losing fights
05:39and whatever air of invincibility
05:41he had last year
05:42is fading fast.
05:43All of which is a
05:44pretty good reminder
05:45that one day
05:46he is gonna be gone.
05:47And on that day,
05:48it will be time too.
05:49As I believe the phrase now goes,
05:52dance like a Hungarian
05:54health minister.
05:55And now,
05:56this.
05:58And now,
05:59local Pittsburgh newscasters
06:01try to pronounce
06:02their ballpark's
06:03new snack.
06:04The team unveiled
06:05a slew of new
06:06food options
06:06available at PNC Park.
06:08Some of the new
06:09food items include
06:09the Boracua dog.
06:12The Boracula dog
06:14brings a bit
06:15of Puerto Rican flavor.
06:17A Borquia dog.
06:18This is a Puerto Rican
06:19inspired hot dog.
06:21Then there's
06:22the Boracua dog.
06:25The Boracula dog.
06:28The Boracua dog.
06:31Boracua dog.
06:32Boracua dog.
06:33They include
06:34a Boricua dog.
06:35This is the Puerto Rican
06:37inspired hot dog
06:37here with a Pittsburgh twist.
06:43Moving on.
06:44Our main story tonight
06:45concerns prediction markets,
06:47the fast growing platforms
06:48where you can bet on
06:49basically anything
06:50as this TikToker explains.
06:51I've been making
06:52a ton of money on this app
06:53that lets you bet
06:54on anything in the world.
06:55I bet that GTA 6
06:56won't be released on time.
06:57I bet that Trump would
06:58pardon Young Thug this year.
06:59I'm predicting Delta Airlines
07:00will be the first airline
07:01to sell Zinn on their flights.
07:03I made money off Trump
07:04being elected president
07:05and because Kamala Harris
07:06didn't go on Joe Rogan's
07:07podcast.
07:07When I was in New York
07:08I bet that it would rain
07:09and it did, so I won money.
07:10I bet that Justin Bieber
07:11will go to the Diddy trial.
07:12When I was in Chicago
07:13I bet on the temperature
07:14and won.
07:15Okay.
07:16Shout out to that guy
07:17Caden Booth
07:18for having such a diverse
07:19set of interests.
07:20The first half of his bets
07:21are strictly Gen Z boy.
07:23Grand Theft Auto,
07:24Young Thug, Zinn,
07:25Rogan,
07:25but the back half
07:26is 100% suburban mom.
07:28Potential rain,
07:29the temperature,
07:30grizzly celebrity trials.
07:32Cade,
07:32you contain multitudes.
07:35Prediction markets are basically
07:36platforms where you can
07:37wager on the outcome
07:38of future events.
07:39The companies decide
07:40on the questions to list
07:42and right now
07:42you can wager on anything
07:43from will traffic
07:44in the Strait of Hormuz
07:45return to normal
07:46by the end of April
07:47to will the US confirm
07:48that aliens exist
07:49before 2027.
07:51These markets have seen
07:52exponential growth
07:53in recent months
07:54logging billions of dollars
07:56in bets every week.
07:57You may have heard about them
07:58on the news
07:59or seen ads
08:00or stumbled across
08:01influencers like this guy
08:02who is constantly updating
08:04his followers
08:04on how his various wages
08:06about the Trump administration
08:06are going
08:07and I'll warn you
08:08it's a real rollercoaster.
08:10China question!
08:11Please!
08:12High-end video chips
08:14to China
08:14but the Wall Street Journal
08:15reported yes.
08:16Oh! My hero!
08:17The president has made
08:18his position on this
08:19very clear
08:20both to the Chinese
08:21that's not something
08:21we're interested in selling
08:22to China.
08:23Yes!
08:25Yes!
08:27Yes!
08:27Barack Hussein Obama.
08:28Yes!
08:29Yes!
08:30Barack Hussein Obama!
08:32I'm getting rich
08:33Chuck Jeffrey Epstein.
08:35All the files dropped?
08:36Yes!
08:36It's Donald Trump
08:37named in the files.
08:39They're all redacted!
08:41Yeah!
08:42A lot more screaming
08:44than you thought there, huh?
08:45And it's kind of amazing
08:46to witness someone
08:47absolutely furious
08:48that Trump's name was redacted
08:49from the Epstein files
08:50for a completely different
08:52reason than the rest of us.
08:53The point is,
08:54a lot of people are getting
08:55into prediction markets
08:56thanks in part
08:57to an aggressive marketing push
08:58by the two big players
09:00in this space,
09:01Cauchy and Polymarket.
09:02Cauchy recently locked in
09:04a $22 billion valuation
09:05from investors,
09:06doubling its valuation
09:07from just a few months earlier.
09:09And Polymarket's
09:10currently trying to do the same.
09:11Meanwhile,
09:12dozens of new entrants
09:13like Coinbase, Robinhood
09:14and even Truth Social
09:15are also trying to get in
09:17on the action.
09:18It is shocking
09:19the extent to which
09:20prediction markets
09:20have proliferated
09:22and sometimes
09:22it's been a little unnerving
09:24given the things
09:25that you can now bet on.
09:27Ali Khamenei out as Supreme Leader
09:30of Iran?
09:31Will Nancy Guthrie's kidnapper
09:33be arrested by the end
09:34of February?
09:36Those are just two events
09:38offered on popular prediction
09:39markets in the U.S.
09:41over the last couple of weeks
09:42where people could have
09:43put their money down,
09:45betting on the outcome.
09:46There's a lot of bad stuff
09:47going on in the world
09:48and being able to bet
09:49on just like horrible things
09:51like that, like
09:52when somebody is going
09:53to be found,
09:55like that's not...
09:56that's really dark to me.
09:58Yeah, he's right.
09:59The impulse to try
10:00and make money
10:01betting on war
10:02or an unfolding tragedy
10:03is really dark.
10:04When someone dies,
10:06you're supposed to send
10:06their family a card
10:07that says,
10:08sorry for your loss
10:09and not one that says,
10:10thanks for covering the spread.
10:12That's just one of many issues
10:14associated with these sites
10:15and given that tonight,
10:16let's take a look
10:17at prediction markets
10:18and try to answer
10:19a few questions
10:20that you might have.
10:21Where exactly
10:22did these sites come from?
10:23What purpose,
10:24if any,
10:25do they serve?
10:26And how on earth
10:26is any of this legal?
10:28And let's start with the fact
10:29that the broad concept
10:30of prediction markets
10:31on news events
10:32is nothing new.
10:33In the late 80s,
10:34economists at the University
10:35of Iowa created the
10:36Iowa Electronic Markets
10:38as an experiment,
10:39allowing students and faculty
10:40to buy and sell predictions
10:41about upcoming elections.
10:43And interestingly,
10:44they began to outperform
10:45many leading polls.
10:47The theory was
10:47that the wisdom of crowds
10:49in the form of people
10:50putting actual money
10:51behind their opinions
10:52can produce useful forecasts.
10:55And controversial uses
10:56of these markets
10:57are not new either.
10:59After 9-11,
11:00the Pentagon
11:00actually flirted
11:01with creating a market
11:02where experts could wager
11:03on future events,
11:04hoping it could help
11:05predict events
11:06in the Middle East.
11:07But it quickly got shut down
11:09once members of Congress
11:10found out about it
11:11and voiced their disgust.
11:12This betting partner
11:14on the internet
11:14will include wagers,
11:16for example,
11:17as the examples
11:19on the internet site
11:20put up by the Department
11:21of Defense
11:21would include
11:22will Mr. Arafat
11:24be assassinated?
11:25Will there be missile
11:27attacks from North Korea?
11:28Will the King of Jordan
11:30be overthrown?
11:31Just as an example.
11:32I think this is
11:33unbelievably stupid.
11:35It's not only...
11:36It is...
11:36Well, that is a gentle thing
11:38to say about a program
11:39that is so devoid of value.
11:41It combines the worst
11:43of all of our instincts
11:44in my judgment.
11:45Yeah, he was justifiably upset
11:47at the notion of people
11:48betting on geopolitical events
11:50that would affect millions
11:51of lives.
11:52As we all know,
11:52the only groups
11:53the society's decided
11:55are allowed to profit
11:56from instability
11:57are military contractors,
11:58members of the Trump family,
11:59and the Mormon wives.
12:01Whitney joined the cast
12:02of Chicago on Broadway,
12:04and Taylor gets announced
12:05as Bachelorette
12:05and then notably unannounced.
12:07I don't know how
12:07these women do it,
12:08but I cannot stop watching.
12:11The point is,
12:13back then,
12:13the concept of betting
12:14on grim outcomes
12:15seemed beyond the pale,
12:16but everything started
12:17changing a few years ago
12:18when Calci and Polymarket
12:19launched as startups,
12:21opening the door
12:22to the free-for-all
12:23that we have now.
12:24Initially,
12:25Calci sought regulatory approval,
12:27and in 2020,
12:28it was approved
12:28as the first regulated exchange,
12:30but Polymarket
12:31went a different way,
12:33launching without approval
12:34and seeming to be
12:34comfortable working
12:35outside the rules.
12:36The government actually
12:37accused Polymarket
12:38of operating an unlicensed exchange,
12:40and as part
12:41of a 2022 settlement,
12:42it agreed to pay
12:431.4 million
12:44and block Americans
12:45from trading on the platform
12:46while admitting
12:47no wrongdoing.
12:48And it is worth watching
12:49Polymarket CEO
12:50Shane Copeland
12:51try to spin that penalty.
12:53It was a 1.4 million dollar fine,
12:55and also...
12:55It was a settlement.
12:56And you could not
12:58have customers
12:58in the United States.
12:59Yeah, we had to go
13:00and geoblock trading in the US
13:01and move certain operations offshore,
13:03and it wasn't,
13:05hey, you're banned
13:05from 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
13:09breaking the law,
13:10it's like which law,
13:11you know?
13:11So, if anything,
13:13it's incompatible.
13:14It's incompatible
13:15with the law.
13:15Yeah, with the regulatory matrix
13:17that existed.
13:18Look,
13:19incompatible with the law
13:20is clearly ridiculous,
13:21but please don't overlook
13:22the line,
13:22people say breaking the law
13:24and it's like,
13:24which law, you know?
13:26I'm sorry, what?
13:28I'm pretty confident
13:29there is a specific law
13:30you broke given,
13:31you know,
13:31you paid a 1.4 million dollar penalty.
13:34Regulators weren't just like,
13:35shit, he just asked which law.
13:37Oh, uh,
13:38the Chinese Exclusion Act of 1882.
13:41From the start,
13:43Polymarket took an extremely
13:44libertarian approach,
13:45allowing users to use crypto
13:46to bet anonymously
13:47on things like war.
13:49And while it's currently
13:50rolling out a new app
13:51to 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
13:59of its business
14:00is still done on Polymarket's
14:01international version,
14:02which is based offshore
14:03in Panama,
14:04and on which American users
14:05have to mask their location
14:07if they want to trade.
14:08And while doing that
14:09might be a high technological bar
14:12to clear for someone like me,
14:13using a VPN
14:14is something anyone under 25
14:16learns to do before they learn
14:18how to write a cursive capital G.
14:20Mostly because
14:20that is an impossible letter
14:22invented by someone
14:23who wanted to make children suffer.
14:25It looks like someone
14:26stabbing himself in the stomach
14:28with a pencil
14:28because that's exactly
14:29what trying to write that letter
14:31makes you want to fucking do.
14:33But regardless
14:34of how these companies
14:36got to this point,
14:37both enjoyed a huge surge
14:39of attention about a year
14:40and a half ago
14:41after this happened.
14:42Kelshi made a name for itself
14:44in the 2024 election.
14:46Just over one week away
14:47from election day
14:48and the race is neck and neck.
14:50It looked close,
14:51unless you were keeping an eye
14:53on Kelshi,
14:54which called the race
14:55well before the TV networks did.
14:58It was like Kelshi,
14:59then Fox, then CNN.
15:00How did that feel?
15:02It was crazy.
15:04Yeah, Kelshi predicted
15:05Trump would win,
15:07as did Polymarket,
15:08whose CEO then tweeted,
15:09make no mistake,
15:10Polymarket single-handedly
15:11called the election
15:12before anything else.
15:13The global truth machine is here,
15:15powered by the people.
15:16And while it is not
15:17the most important thing,
15:18you have now met the CEOs
15:19of these two companies
15:20and I'm just gonna say it,
15:22they are two of the most
15:23extras in a Titino's Pizza Rolls
15:25commercial looking motherfuckers
15:26I have ever seen in my life.
15:28Anyway, since then,
15:30they've both been scrambling
15:32for market dominance,
15:33which is why Kelshi,
15:34for instance,
15:34has run TV ads like this.
15:36Indiana gonna win, baby!
15:38We're in Florida asking people
15:39what 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
15:51do you think we'll have this year?
15:53Kelshi!
15:54Kelshi!
15:55Kelshi!
15:56Kelshi lets you
15:57legally trade on anything
15:58anywhere in the US.
16:00OKC!
16:01Indeed!
16:03OKC!
16:03Kelshi!
16:06OK, that visual cacophony
16:09is an AI slop atrocity.
16:11It contains two alligators,
16:12four shirtless or nearly shirtless
16:14old guys,
16:14one egg freak,
16:16three different people
16:16being pursued by the police,
16:17one woman I'm kind of rooting for,
16:19one USDA inspectors 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,
16:28trade it,
16:29although given everything that came before,
16:31a more honest tagline might have been,
16:33fuck empathy,
16:33get money, Kelshi.
16:35And again,
16:36that is the one that likes to present itself
16:38as the more buttoned-down rule-abiding
16:40company of the two.
16:41And at this point,
16:42you might be thinking,
16:43wait, isn't that an ad
16:44for a gambling site?
16:46But both Kelshi and Polymarket
16:48will fiercely argue
16:49that that's not what they are at all.
16:51They argue that gambling
16:52involves playing against the house,
16:54while their users are trading
16:56against each other,
16:57with the companies typically
16:57just charging a fee on trades.
17:00They'll also insist
17:01that they're simply
17:01modern versions of
17:02commodity 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
17:08people can speculate
17:09about the future price
17:10of things like corn or natural gas.
17:12And crucially,
17:13they will argue that
17:14the bets they sell
17:15are financial instruments
17:16that enable ordinary people
17:17to hedge against future risks,
17:20like betting that, say,
17:21a hurricane will hit,
17:22or that the US government
17:23will shut down.
17:24Here is how Kelshi's CEO frames it.
17:27We had a market
17:28about whether student loan
17:29are gonna be forgiven or not this year,
17:31and so a lot of people
17:32were hedging using that market.
17:34And so if it wasn't forgiven,
17:35they would get paid some amount
17:36of money that they could use
17:37to basically pay the student loan.
17:38and that's why this is very important.
17:41Right.
17:41Apparently,
17:42they're just trying to help people
17:43make wise planning decisions.
17:45It's the kind of responsible
17:46financial thinking
17:47that you intuitively associate
17:49with a company
17:49that advertises itself
17:50with a shirtless old man
17:52being arrested,
17:52or an alien pledging Sigma Chi.
17:55And look,
17:55that might make some sense
17:58when you're talking about
17:59an economic indicator
18:00or a specific event
18:01that might impact you personally.
18:03But what exactly
18:04is the financial loss
18:05that I'm hedging against
18:06if I bet on the next
18:07winner of the masked singer
18:09or whether or not
18:10Mr. Beast will say feastable.
18:12And when you watch
18:13some of Koushi's actual customers
18:16in action,
18:16the notion that this is about
18:18sober risk management
18:19feels absurd.
18:21I'll tell you,
18:21if I didn't win this election,
18:23and if you had a moron
18:24like Kamala
18:25or a moron
18:28like Sleepy Joe-
18:29Yeah!
18:31Here we go.
18:32Bang!
18:33There we go.
18:34Number one, Sleepy Joe.
18:36That's a hit.
18:36We're looking good so far.
18:38Easy, bro.
18:39Okay, alright, alright, alright.
18:40We made about 200 bucks.
18:42Okay, alright.
18:43200 bucks.
18:44Men playing in women's sports.
18:45Wait, wait, wait!
18:47Transgender.
18:47Hey!
18:50Hey!
18:51Hey!
18:51We are off to a risk.
18:52Yay!
18:53We hit on that shit immediately.
18:55There we go.
18:55Sleepy Joe is transgender.
18:56We got Sleepy Joe is transgender
18:57in like the first five minutes, bro.
19:00Bro, we're up last 500 bucks.
19:02We gotta make a thousand.
19:03Yeah, we gotta make a thousand.
19:04Okay, alright, alright.
19:06I know,
19:07I couldn't even tell you
19:08what the f*** this man is saying.
19:10Like, he just says a
19:11soup of random words.
19:12Somehow Joel is just
19:14deciphering this
19:14and just making money.
19:16Yeah.
19:17That is not
19:18using a financial instrument
19:19to hedge risk.
19:20It's taking advantage
19:22of a sundowning geriatrics
19:23rapidly declining
19:24verbal abilities.
19:25Oh!
19:26You bet he's gonna say
19:27the word nasty?
19:28Great guess, dude.
19:29It's one of the last
19:30200 words he has left.
19:33Honestly, that clip
19:34is unsettling
19:34on multiple fronts.
19:35One, because the president's
19:36harmful rhetoric
19:37is being divorced
19:38from its actual meaning.
19:39But two, because
19:40that's not what these bros
19:41are supposed to be doing.
19:42They shouldn't be betting
19:44on Trump speeches.
19:45They should be sitting
19:46on that same couch
19:47and watching YouTube
19:48highlight reels of
19:48Kevin Love outlet passes,
19:50six modellos in,
19:52forging a deep, beautiful
19:53friendship that will last
19:54for 40 years
19:54and that they will never,
19:55ever discuss.
19:57Nature has lost its course.
19:59The point is,
20:01that sure looks like gambling.
20:03And it is pretty telling
20:04that while political
20:05mentions markets,
20:06like that,
20:07get a lot of attention,
20:08around 90% of trading volume
20:10on Cauchy
20:11is on sports.
20:12But you can see why
20:14these companies
20:15are so insistent
20:16that they are not
20:17gambling sites.
20:18Just 39 states,
20:19D.C. and Puerto Rico
20:20have some form
20:21of legalized sports betting.
20:22With only 32 of those
20:24allowing online gambling,
20:26leaving some pretty
20:26attractive megastates,
20:28like California and Texas,
20:29on the table.
20:30And by insisting,
20:32they are financial exchanges
20:33offering not bets,
20:34but event contracts,
20:36prediction markets
20:37are not only able
20:38to operate in states
20:39where gambling isn't legal,
20:40but also,
20:41get around state taxes
20:42and minimum age requirements
20:44in states where it is.
20:46And they've sometimes
20:47talked out of both sides
20:48of their mouth on this,
20:49because in ads like this one,
20:50Cauchy's called itself
20:51the first nationwide
20:52legal sports betting platform.
20:54But,
20:55when asked about it,
20:56it later tried
20:57to qualify that statement,
20:58saying,
20:58the bet language
20:59is only used in the sense
21:01that any financial position
21:02can be considered
21:03a bet on the future.
21:05And that is so dumb,
21:06it is almost charming.
21:08It's like seeing
21:09a side outside
21:10a strip club
21:11that says,
21:11girls, girls, girls,
21:12and then seeing
21:13the manager come out
21:13and say,
21:14we meant girls, girls, girls,
21:15who code.
21:16We support women in STEM.
21:18Sure you do, buddy.
21:21Nice try.
21:22But these companies' insistence
21:24that they are not
21:25gambling platforms
21:26is actually one of the two
21:27most irritating claims
21:28that they tend to make.
21:29The other is that
21:30they're actually
21:31incredibly important
21:32to society,
21:33because they can help us
21:35more accurately predict
21:36the future.
21:36The head of Polymarket
21:37has even called it
21:38the most accurate thing
21:39we have as mankind
21:40right now,
21:41and has bragged
21:42that the predictions
21:43it generates
21:43can save lives.
21:45When I get hit up
21:46by people
21:48in the Middle East
21:49who are saying
21:50that, hey,
21:51you know,
21:51we're looking at Polymarket
21:52to decide whether
21:53we sleep near the bomb shelter.
21:55Like, we look at it every day
21:55and I'm like,
21:56oh, it's really that popular.
21:57Like, are you kidding me?
21:58Like, do you not even know
21:59what's going on?
22:00Like, everyone's relying on this.
22:02Um, that's very powerful.
22:05That's like a, you know,
22:08an undeniable value proposition
22:10that did not exist before.
22:12Hey, quick question.
22:14What exact stage of capitalism
22:16are we in
22:16when the child CEO
22:18of an offshore gambling platform
22:19refers to betting odds
22:21on bombings
22:21as an undeniable value proposition?
22:23Because it feels like
22:25we're in palliative care
22:26at this point.
22:27But I guess
22:28that is the point you reach
22:29when you're a 27-year-old billionaire
22:30surrounded by yes-men
22:32who will never tell you the truth.
22:33Something I know for sure
22:34because no one in his life
22:36told him never to ever
22:37wear that jacket.
22:39Which, when he is sitting like that,
22:40unmistakably says,
22:42peed-rider.
22:43Though, for all the talk
22:45of these sites' unparalleled accuracy,
22:47you should know
22:47that's a bit of an oversell.
22:49They have shown promise
22:50in some areas.
22:51A recent paper found
22:52Cauchy's predictions
22:52were roughly consistent
22:54with those of
22:55professional forecasters
22:56when it came to
22:57the economy
22:57and Federal Reserve policy.
22:59But,
23:00they've also had
23:01some big misses.
23:02For instance,
23:03both favored the Chiefs
23:04to win last year's Super Bowl
23:05and also whiffed
23:06the recent
23:06Texas Republican Senate primary
23:08with Polymarket
23:09even posting a
23:10breaking alert
23:11that morning
23:12announcing Ken Paxton
23:13was projected to win
23:14with their odds
23:15giving him an 83% chance.
23:16And you know,
23:17he didn't do that.
23:19And look,
23:20all of that
23:20would be fine.
23:21These are just odds
23:22and real life
23:23can defy odds.
23:24Were it not for the fact
23:26that these companies
23:27are actively selling themselves
23:28as basically oracles.
23:30And they've even tried
23:31to bolster that reputation
23:33by entering paid
23:34partnership deals
23:35with news organizations.
23:37Dow Jones,
23:38parent company
23:39of the Wall Street Journal
23:40announced a partnership
23:41with Polymarket
23:42earlier this year
23:43while CNN,
23:44CNBC and Fox News
23:45all signed deals
23:46with Cauchy
23:47which even sponsors
23:48segments on CNN
23:49that feature
23:50Cauchy's odds
23:51on various future events
23:52strolling across the bottom
23:54of the screen.
23:55And I do not want
23:56the CNN ticker
23:58to have betting odds
23:59on news events.
24:00I don't really want
24:01anything on there
24:02except maybe the odd
24:03distractingly weird headline
24:04that takes my mind off
24:05things for a second.
24:05You know, something like,
24:06Giraffe escapes from zoo.
24:08Please say it has a gun.
24:10You know,
24:11something fun
24:12to Google later.
24:14But having their logo
24:15like that
24:16on CNN
24:17is a big win
24:19for Cauchy.
24:20Just as it's a big win
24:21for them to have influencers
24:22like that guy from earlier
24:24saying how easy it is
24:25to win money.
24:26Though you should know,
24:27after we asked,
24:28Cauchy told us
24:29that they paid him
24:30for that post.
24:31And it feels like
24:31deals like those
24:32should really be
24:33more transparent.
24:34It makes me a little annoyed
24:35and to be honest,
24:36even more hungry.
24:37And you know,
24:37when I need something nutritious
24:39yet in a can,
24:40I know where to turn.
24:42Bush's baked beans.
24:44But full disclosure,
24:46I was paid $40
24:47to say that.
24:49The thing is,
24:50it's worth knowing
24:50that in reality,
24:52as with sportsbooks,
24:53researchers have found
24:55that most users
24:56of Cauchy and Polymarket
24:57lose money.
24:58As we've discussed before,
25:00casual gamblers
25:00are always going to be
25:02easy prey
25:02for more sophisticated operators
25:04with advanced systems
25:06to give them an edge.
25:07Which is probably why.
25:08While Polymarket
25:09has more than
25:09two million users,
25:11one analysis found
25:12more than two-thirds
25:13of all money won on it
25:15was held
25:15by just 740 accounts.
25:18And if you're thinking,
25:19how exactly
25:20are these companies
25:21getting away
25:22with all this?
25:23Well,
25:24a lot has to do
25:24with who is in the White House
25:26right now.
25:27Both companies
25:28have fostered strong connections
25:29with the Trump family.
25:30In fact, Don Jr.
25:31is both an investor in
25:32and an unpaid advisor
25:33to Polymarket
25:34and a paid advisor
25:35to Cauchy.
25:36And look,
25:37I am not saying
25:38that Don Jr.
25:39isn't providing
25:40important or valuable insight.
25:42Although,
25:43in a much truer sense,
25:44I very much am saying that.
25:46I'm just saying,
25:47it's notable
25:48just how hard it was
25:49for Cauchy's CEO
25:50to answer a series
25:51of basic questions
25:53about Don Jr.'s role.
25:54Why did you guys
25:55make Donald Trump Jr.
25:57a strategic advisor?
25:58We have a lot of advisors.
26:00Mm-hmm.
26:00Um,
26:01and they span
26:03across the board,
26:03across different functions.
26:05Um,
26:05but really,
26:06this is all about
26:07growing this industry,
26:09the prediction market industry,
26:10that a lot of people
26:11really believe in.
26:12What kind of advice
26:13does he give you?
26:14So,
26:14it really is, again,
26:15about growing prediction markets.
26:17You know,
26:18he believes in prediction markets,
26:19we believe in prediction markets,
26:20a lot of people
26:20believe in prediction markets,
26:21and it's really about
26:23go-to-market and expansion plans.
26:24Does he come to meetings?
26:26How much do you pay him?
26:27What's his role?
26:28I mean,
26:28this is the son of the president.
26:30We, again,
26:30I mean,
26:31we have a lot of advisors,
26:32and whether it's our investors,
26:33whether it's, uh,
26:34people that we really trust
26:35and respect,
26:36whether people...
26:36He's not just any advisor.
26:38He has a direct line
26:39to the White House.
26:41We have a lot of advisors.
26:43Yeah!
26:44Turns out,
26:45it's pretty hard to justify
26:46hiring a Nepo baby,
26:48or, in Don Jr.'s case,
26:49a Nepo divorced dad.
26:51But the thing is,
26:52if hiring Don Jr.
26:54helped get these companies
26:54on Trump's good side,
26:55it's a bet that's paid off
26:56massively for them.
26:58Because while the Biden administration
26:59had at least tried
27:00to rein in some
27:01of what these markets were doing,
27:02the Trump administration
27:03has gone hard
27:04in the other direction.
27:05And to understand the degree
27:07to which that's the case,
27:08take a look at the CFTC,
27:09or Commodity Futures Trading Commission.
27:12It regulates these platforms.
27:13And it was actually empowered
27:14under the Dodd-Frank Act
27:15in 2010
27:16to block event contracts
27:18about terrorism,
27:19assassination,
27:20war,
27:20and gaming.
27:21You know,
27:21a bunch of what you've seen
27:23so far tonight.
27:24But it is clearly
27:25not doing that,
27:26and it doesn't even seem
27:27to be trying.
27:28In fact, while the CFTC
27:29is supposed to be comprised
27:30of five commissioners,
27:31two of whom are required
27:33to belong to the minority party,
27:35it currently only has this guy,
27:37Michael Selig,
27:38a Trump appointee
27:39who's a massive cheerleader
27:40for this industry.
27:42He completely buys into their whole
27:44this is all about hedging risk
27:46argument,
27:47to the point that he once suggested
27:48that somebody with a medical condition
27:49could manage the potential risk
27:51of having a future treatment
27:52or medical costs
27:53by placing a bet
27:55on the likelihood of something
27:56passing a drug trial.
27:57Which is,
27:58and I don't say this lightly,
27:59one of the most fucked up suggestions
28:01I have ever heard
28:03for this country's
28:04Guernica-ass healthcare system.
28:06And while Selig's
28:07recently made noises
28:08about stronger enforcement,
28:09it is hard to take him
28:10at his word,
28:12given that during
28:12his confirmation hearings
28:13he told Congress
28:14he let courts decide
28:15whether these companies
28:17constitute gambling.
28:18But in office,
28:19he's done the exact opposite
28:21of that.
28:21In fact, more than a dozen states
28:23are currently suing
28:24prediction markets,
28:25but rather than let that
28:26play out in the courts
28:27like he promised,
28:29Selig posted this video.
28:31To those who seek
28:32to challenge our authority
28:34in this space,
28:35let me be clear.
28:36We will see you in court.
28:39What a fucking weasel.
28:42That guy has both the energy
28:44and fashion sense
28:45of a suits villain
28:46who goes toe-to-toe
28:47with Harvey and Mike
28:48all season long,
28:49while Lewis and Meghan Markle,
28:51I don't care what you say,
28:51that's a character named to me,
28:52watch on.
28:54But he's done more
28:55than just threaten.
28:56Selig's let his agency
28:57to sue three states
28:58to get them to back off
29:00trying to regulate
29:01prediction markets.
29:02So right now,
29:03these companies are able
29:04to operate under
29:05extremely friendly conditions.
29:07And given that,
29:07it's worth looking at
29:08some of the problems
29:09that have already begun
29:10to emerge.
29:11Starting with the fact
29:12that for a lot of these bets,
29:13it is incredibly easy
29:14for individuals
29:15to manipulate the outcomes.
29:17Some have even joked
29:18about that.
29:19For instance,
29:19on a recent earnings call,
29:20the CEO of Coinbase
29:21said this.
29:22I was a little distracted
29:23because I was tracking
29:24the prediction market
29:25about what Coinbase
29:26will say on their next
29:27earnings call,
29:28and I just want to,
29:29you know,
29:30add here the words
29:32Bitcoin,
29:32Ethereum,
29:33Blockchain,
29:34Staking,
29:35and Web3
29:36to make sure we get those
29:37in before the end of the call.
29:39Yeah.
29:39He saw people's bets online
29:41and just rattled off words
29:43that they'd bet on him saying.
29:44And it really feels like
29:45manipulating betting outcomes
29:46should be more difficult
29:48than that.
29:49In the old days,
29:50you at least had to
29:51sneak cocaine to a racehorse,
29:53not just rattle off a list
29:55of the most punchable words
29:57in the English language.
29:58We even realized
30:00while researching this piece
30:01that there was betting
30:01happening around this show.
30:03Specifically,
30:04on what words I'd say
30:05during our show
30:06on February 22nd,
30:07which is stupid
30:08for multiple reasons,
30:10including that we tape
30:11on Saturday
30:12in front of a studio audience,
30:14all of whom would then
30:15have a massive
30:16information advantage
30:17and more than 24 hours
30:19before the betting window
30:21closed.
30:21Now, thankfully,
30:22we wipe every audience
30:24member's memory
30:24before we let them
30:26out of the taping.
30:27We try to erase
30:28only the last couple
30:29of hours,
30:29but sometimes we do wipe
30:30clean a milestone birthday.
30:32That's on us,
30:32and we're constantly
30:34calibrating the technology.
30:35You've been warned.
30:36You won't remember,
30:37but you've been warned.
30:39And there are markets
30:41where it is way too easy
30:42for anyone
30:43to manipulate outcomes.
30:44Just last summer,
30:45you might remember
30:46a bunch of arseholes
30:47started throwing dildos
30:48on the court
30:49during WNBA games
30:50to promote
30:51a crypto meme coin.
30:52And if that wasn't
30:53already a cursed
30:55enough sentence,
30:56I'll let this
30:57South African man
30:58fill you in on what
30:59happened next.
31:00Did you know you can
31:01actually bet on
31:02whether a dildo
31:03will be thrown
31:04at the WNBA game
31:06on August 9th,
31:08August 11th,
31:10that's today,
31:11and August 12th?
31:13Right here,
31:14on Pudding Market.
31:15I had no idea.
31:17Actually,
31:17I had no idea
31:18what the WNBA
31:19was either,
31:20until, you know,
31:22you could place
31:23a bet on whether
31:24a dildo would be
31:24thrown at it.
31:25Yeah, none of that
31:26is great,
31:27and it is pretty depressing
31:28that the way he learned
31:29about the existence
31:30of the WNBA
31:32was finding out
31:33you could bet
31:33on whether a dildo
31:34would be thrown
31:35at one of its games.
31:36It'd be like finding out
31:37about the existence
31:38of Robert De Niro
31:39by googling
31:39the cast of Dirty Grandpa.
31:41Oh, no.
31:42No, don't.
31:43Not like this.
31:44Don't learn
31:45about him like this.
31:47But it is true.
31:49People started betting
31:50whether dildos
31:51would be thrown again,
31:52and Polly Market
31:53even put up this tweet
31:54promoting the bets.
31:56And sure enough,
31:57more dildos
31:58got thrown.
31:59And that could
31:59well have been
32:00because Polly Market
32:01had just created
32:02a situation where
32:03you could easily
32:04make money
32:05by betting someone
32:06would throw a dildo
32:07and then go into a game
32:08with a dildo,
32:09and throwing it.
32:10There have also
32:11been multiple instances
32:12of people seeming
32:13to use inside information
32:14to gain these markets.
32:16Last year,
32:16a trader made
32:17over a million dollars
32:18with a series
32:19of accurate bets
32:20about Google's rankings
32:21of its most searched
32:22people of 2025.
32:23That same person,
32:24by the way,
32:24had also earned
32:26over $150,000
32:27by correctly predicting
32:28the exact release date
32:29of Google's
32:30Gemini 3 model,
32:31which really makes you
32:32think that that person
32:34either worked for Google,
32:35or knew someone
32:36who did,
32:37or maybe managed
32:38to hack Google
32:39from the outside,
32:40in which case,
32:41would it kill you
32:42to do a Google Doodle
32:43for my birthday?
32:44It is on Thursday,
32:45by the way.
32:46And Polly Market's
32:48CEO has in the past
32:49openly celebrated
32:50the fact that this kind
32:51of thing can happen
32:52on his platform,
32:52because he's argued
32:54it just makes its
32:55prediction abilities
32:56that much stronger.
32:58What do you guys do,
32:59if anything,
33:00to basically guard
33:01against insider trading?
33:02Yeah.
33:03So,
33:04it goes back to this idea
33:05of information markets,
33:06right?
33:06Like, you think about
33:09when will Gemini 3 launch.
33:11Nobody is under the impression
33:13that nobody knows the answer,
33:15right?
33:15Like, of course,
33:16there's people who are working
33:17on it who know when it's
33:18going to come.
33:19And I think what's cool
33:20about Polly Market
33:21is that it creates
33:23this financial incentive
33:24for people to go
33:25and divulge the information
33:26to the market,
33:27and the market to change,
33:28and all of a sudden
33:28it's trading at 95 cents,
33:30and people are like,
33:30I mean, you think,
33:31when you say divulge,
33:32you mean the people
33:32who actually know?
33:33Yeah.
33:33Or if someone tells someone
33:34and then the market responds.
33:36Yeah.
33:36He basically just answered
33:38the question,
33:39how do you guard against
33:40insider trading there?
33:41With no.
33:42And he did it
33:43with a fashion choice
33:45somehow even worse
33:46than his biker jacket,
33:47because what in the
33:49NYU army fatigues
33:50is that shit?
33:52That sweater looks like
33:53it was made from
33:54illegally poached grimace.
33:55But also,
33:56I don't care how many
33:58statement sweaters you wear,
33:59or how many Ben Platt
34:01and Dear Evan Hansen
34:02haircuts you have.
34:03You're not describing
34:04some edgy, chill way
34:06to divulge information
34:06to the market.
34:07You're describing
34:08insider trading.
34:10And it gets genuinely chilling
34:11when you realize
34:12that people seem to be
34:13using insider info
34:14to bet on life-or-death events.
34:17In January,
34:17after the US seized
34:18Nicolas Maduro,
34:19an anonymous trader
34:20pocketed more than $400,000
34:22off bets that that would happen,
34:24with the bulk of those bets
34:25made mere hours
34:26before the raid was announced.
34:28In February,
34:29two Israelis were charged
34:30with using classified
34:30military information
34:31to place bets
34:32on polymarkets.
34:33And in March,
34:34this happened.
34:35Deadly American strikes,
34:37and some people
34:38may have made money
34:39from them.
34:40More than a dozen
34:41anonymous accounts
34:42placed bets predicting
34:43that the United States
34:44would strike Iran
34:45by Saturday,
34:46the 28th of February.
34:48Most of those wages
34:49were placed in the hours
34:50before the first bombs fell.
34:52And many of the accounts
34:53had been created
34:54only days earlier.
34:56One of the biggest winners
34:57used the account name
34:58MagaMyMan.
34:59The trader placed $87,000
35:02on a wall with Iran
35:03exactly 71 minutes
35:05before the first strike,
35:06winning a jackpot
35:07worth $515,000.
35:10Yeah, that sure feels
35:12like someone with
35:12inside information
35:13was betting on Polymarket.
35:15And I'd say that
35:16it wasn't a great idea
35:16to make their username
35:18MagaMyMan,
35:19except it doesn't seem
35:20to matter anymore,
35:21does it?
35:21His username might as well
35:22have been MagaMyMan.
35:23Just kidding.
35:24My name is Dylan
35:25Bathwell
35:25and I work
35:26at the Department of Defense.
35:27He's not really
35:28risking much.
35:29Now, I should say,
35:30Cauchy just announced
35:31it took action
35:32in two insider trading cases
35:34and has taken out billboards
35:35bragging that it bans
35:36insider trading
35:37and also that it
35:38doesn't offer death markets,
35:40which is a little weird.
35:42It'd be like McDonald's
35:43putting up ads
35:43that its nuggets
35:44don't contain baby meat.
35:47Okay, mama,
35:48but now I have
35:49way more questions.
35:51For its part,
35:52Polymarket recently
35:53updated its rules
35:54to clarify that users
35:55can't act on stolen
35:56confidential information,
35:58wager using illegal tips,
35:59or bet if they're
36:00in a position to influence
36:01the outcome of an event.
36:02Although,
36:03it is not a great sign
36:05that just recently
36:06there was a suspicious
36:07spike in trading
36:07right before the ceasefire
36:09with Iran was announced
36:10as a group of new accounts
36:12on Polymarket
36:12made highly specific,
36:14well-timed bets
36:15about it,
36:15earning hundreds
36:16of thousands of dollars.
36:17So it sure seems like right now
36:20we've effectively got
36:21gambling sites operating
36:23even in states
36:24where gambling is illegal
36:25and offering bets
36:26on things that there
36:27have been laws against
36:28for over a decade now.
36:29So, what can we do?
36:31Well, at the bare minimum,
36:32the CFTC should be doing more.
36:35And while it says
36:36it's writing new rules,
36:37I wouldn't expect much,
36:39especially for as long
36:40as this fucking guy
36:41is in charge.
36:42As I said earlier,
36:43there are a bunch of cases
36:44making their way
36:45through the courts right now,
36:46but it's not clear
36:46how they'll resolve
36:47and it's probably going to be
36:48in front of the Supreme Court.
36:50Meanwhile,
36:51Congress is considering
36:52a number of proposals
36:53tackling aspects
36:53of this issue,
36:54although, given
36:55that the President
36:56of the United States
36:57has a kid currently advising
36:59both major companies,
37:00I wouldn't hold your breath.
37:02So, meaningful policy shifts
37:04in the near term
37:04do seem unlikely,
37:06but at some point
37:07we do need to put in place
37:08some basic guardrails here.
37:10And until then,
37:11if we can't change
37:12how these sites operate,
37:14we should at least
37:15try and change
37:16how we individually
37:17see them.
37:18One thing that would
37:19frankly help
37:20is if news organizations
37:21stopped laundering
37:22these companies' reputations
37:24for them
37:24by putting their odds
37:25on screen
37:26like they are actual news,
37:27because is it a bad idea
37:29for them to be doing that?
37:30If I may quote
37:31the single loudest man
37:33in the world.
37:34Yes!
37:36Yes, exactly.
37:37I couldn't have screamed
37:38it better myself.
37:40And look,
37:40on a personal level,
37:42if you're considering
37:43using these markets
37:44to gamble,
37:45try and remember
37:46that you are statistically
37:47likely to lose money.
37:49And while I am not
37:50against gambling per se,
37:52there is something so grim
37:53about these sites
37:54turning every aspect
37:56of our lives
37:56into a bet.
37:57Because sure,
37:58money can be won on them.
38:00But in that happening,
38:01something also gets lost.
38:03Specifically,
38:03a society where things
38:04aren't only weighed
38:05in financial terms
38:06and where people engage
38:07with news for what it means
38:08to human beings,
38:10not just because
38:10they have $50
38:11riding on it.
38:12And when something
38:13unexpected happens
38:15in the world,
38:15it would be really nice
38:16not to have to
38:17automatically question
38:18whether it's only
38:19because someone is
38:20trying to move a market.
38:22That is why
38:22I'm gonna make you
38:23a promise tonight.
38:24I will never do anything
38:25because someone online
38:27placed a bet on it.
38:28So you can be confident
38:29that if I ever say,
38:31Bitcoin, Ethereum,
38:32blockchain,
38:33staking, and Web3,
38:34it won't be
38:35because I'm trying
38:35to move markets.
38:36It'll be because
38:37I'm having a stroke.
38:39And once you have
38:41that trust,
38:41you can feel secure
38:43in the knowledge
38:43that if a dildo
38:44ever lands on this desk,
38:46it's not because
38:47someone had a secret
38:48wager on it.
38:49It's because
38:49we weren't sure
38:50how to get out
38:51of a 32-minute segment
38:52on a quasi-legal
38:53gambling industry.
38:54But we knew
38:54that a thrown dildo
38:56in the right circumstances
38:57and with the full consent
38:59of the person having
38:59it thrown at them
39:00would be undeniably funny.
39:03And if more
39:04than one dildo lands,
39:05it's only because
39:06a fundamental rule
39:07of company is
39:08more dildos
39:10is more funny.
39:11And if it turns out
39:12there are too many
39:13dildos flying through
39:14the air,
39:14I promise,
39:15it will only be because
39:16we didn't know
39:17how many to buy
39:18and now we're sort
39:19of screwed
39:20because I don't think
39:21you're allowed
39:22to return them.
39:23That is our show.
39:24Thank you so much
39:25for watching.
39:26See you next week.
39:26Good night.
39:28This is,
39:29this is just
39:30too many dildos.
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