00:00Nathaniel, can you just give us some numbers to showcase really how much trading and production
00:04markets overtook traditional sports betting? Sure. This World Cup was pretty amazing in
00:13terms of the growth we saw. Calci, which has become the industry leader, hit a peak right
00:21before the World Cup when the Knicks were going on their NBA finals run. A week later during the
00:29World Cup, Calci doubled the volume that they had seen at their peak during this Knicks run,
00:35which was itself something like 10 times the trading volume wagering that Calci had earlier
00:43in the year. Gambling companies, sportsbooks, DraftKings, FanDuel, a year ago they were brushing
00:53this off as a sort of rounding error. But now during the World Cup, Calci and Polymarket,
01:02to some degree, the smaller competitor, had more users on their apps than either DraftKings or
01:08sportsbooks in the U.S. So they have become a real competitive threat, real players in the sports
01:16betting industry. Yeah, it's remarkable to see the growth here. I also want to mention the company,
01:22Calci that is, added 3 million users just over the last month. My question for you, Nathaniel,
01:28in your view, Calci's like, they're trying to have it all and do so much for so many different
01:35groups of people. But yet the vast majority of what still happens on these platforms is sports betting.
01:42And I'm wondering if, in your view, and you've reported a lot on this, these companies can become,
01:49for institutional investors and allow institutional investors to price risk rather than just focus
01:55on sports. It's a great question. And it's sort of the conundrum that lies at the center of the rise
02:03of prediction markets. The prediction markets, Calci, have sold themselves as the sources of the truth
02:14on matters of economic consequence, on Fed rate raises and election results. And that was viewed
02:22as the original promise of these exchanges. But as you mentioned, sports betting has become 90% of the
02:30trading volume on these exchanges. And it's a sort of balancing act for Calci and Polymarket.
02:38On the one hand, they've increasingly made the argument that sports betting is actually economically
02:45significant activity. They like to point to instances around the Knicks playoffs, around the World Cup,
02:54where a city might lose money if a team loses a game or wins a game. And if the Knicks
03:02series had
03:03gone to game seven, there would have been a lot more economic activity around that game seven. And so
03:10you could see a world in which people, in which Wall Street firms, in which real institutional
03:15investors might want to hedge their economic risks around this. I think that most people probably view
03:23that as a bit of a stretch. Clearly, most of this is just old-fashioned sports betting.
03:30And I think the question is, do the people who come in through the World Cup through sports betting
03:35turn into more legitimate traders? But for now, I mean, Wall Street firms are getting increasingly
03:41involved. And so they are viewing this as a sort of potentially new asset class.
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