Speaker 1: I'm Daniel James, and you're listening to seven am. Donald
Speaker 1: Trump has found a new way to make money. Trump
Speaker 1: Media and Technology Group is monetizing the president's social media
Speaker 1: posts something Wall Street firms early access to them for
Speaker 1: as much as one hundred thousand dollars a month, and
Speaker 1: in the world of traders, a few milliseconds can mean
Speaker 1: millions of dollars. Now, Trump is being sued over the arrangement,
Speaker 1: and he claims it gives paying customers preferential access to
Speaker 1: official presidential communications. At the same time, Trump Media is
Speaker 1: also moving into prediction markets, a fast growing corner of
Speaker 1: finance that can turn political events into betting opportunities. Today,
Speaker 1: journalists for Reuter's Anabarn said on the extraordinary collision of
Speaker 1: presidential power, private profit, and a booming industry where almost
Speaker 1: anything can become a wager. It's Monday, August twenty four
Speaker 1: a theban Trump Media, which is a company Trump owns,
Speaker 1: is now charging training firms up to one hundred thousand
Speaker 1: dollars a month for fast access to posts from Trump
Speaker 1: and other senior officials. What exactly is being bought and
Speaker 1: sold here?
Speaker 2: So basically truth socialists planning to sell investors and traders
Speaker 2: who deal with stocks, bonds, currencies, derivatives, and other types
Speaker 2: of assets super fast access to posts from Trump himself
Speaker 2: as well as other high profile accounts on the platform.
Speaker 2: So basically, if you're like a high frequency treaty firm
Speaker 2: or a hedge funt who wants to pay for these
Speaker 2: types of posts, you will basically get faster access to
Speaker 2: these posts and from Trump himself and from other high
Speaker 2: profile accounts on the platform, like other government officials and lawmakers.
Speaker 2: As you know, there are some of the most floaded
Speaker 2: accounts on truth Social belong to Trump himself and others
Speaker 2: around in his orbit, including his sons Donald Trump Junior
Speaker 2: and Eric Trump, as well as some of his other
Speaker 2: prominent supporters like d Bontino and Sean Hannity.
Speaker 1: While can getting a presidential announcement even million seconds early,
Speaker 1: it'd be worth so much money.
Speaker 2: Yes, So this is the sort of access that is
Speaker 2: immensely valuable to like large one street trading firms and
Speaker 2: hedge funds who typically generate profits that can be worth
Speaker 2: hundreds of thousands of dollars or even more like sometimes
Speaker 2: millions on any given trade. Because faster access to this
Speaker 2: kind of market. Moving information provides like a huge speed
Speaker 2: advantage to trading firms that use sophisticated algorithms and automated
Speaker 2: systems to place or cancel trades. You're often looking to
Speaker 2: profit from feeding differences in the prices of assets. You know,
Speaker 2: that's the orbit rudge that you're looking to profit, which
Speaker 2: means that how fast you respond and were talking about
Speaker 2: milliseconds and nanoseconds over here, you know, and that can
Speaker 2: mean the difference between let's say a million dollar loss
Speaker 2: or a million dollars of profit. So that's the kind
Speaker 2: of difference you know, a millisecond can make in this
Speaker 2: world of high frequency trading.
Speaker 1: So the s calls limit in terms of how much
Speaker 1: money could potentially be made. Here, US News outlet's de
Speaker 1: decept and the Freedom of the Press Foundation suing Trump
Speaker 1: over this scheme. Can you tell me about the case?
Speaker 2: Yes, So what happened was, like the intercept and the
Speaker 2: Freedom of the Press Foundation, they basically made the argument
Speaker 2: that this service violates the United States Constitution, the First
Speaker 2: Amendment rights. What the First Amendment dictates is that everyone
Speaker 2: gets equal access to information that is out there in
Speaker 2: the market. It's like, you know, whether you are like
Speaker 2: a big Want Street trading firm, or if you're like
Speaker 2: a moment pop retail investor, you deserve equal access to information.
Speaker 2: So the argument that the Intercept and the Freedom of
Speaker 2: the Press Foundation is making is that there's no legitimate
Speaker 2: government interest in selling Trump's post to private subscribers and
Speaker 2: letting him profit.
Speaker 1: Trump Maybea's defense is essentially that these posts of public
Speaker 1: information anyway. So how has that defense been received by
Speaker 1: its critics?
Speaker 2: So it depends on midside of the political isle. You
Speaker 2: are taddia like You've had Senator Mark Warner of Virginia
Speaker 2: and a couple of other senators like Elizabeth Warren and
Speaker 2: a few others who've said that this new service is
Speaker 2: sort of amounts to a self dealing by the president
Speaker 2: and it creates like a two tierth system for access
Speaker 2: to government information.
Speaker 3: Raise your hand if you believe that President Trump's selling
Speaker 3: information about our economy and foreign policy to Wall Street
Speaker 3: before everyone else gets access to that information is good
Speaker 3: for the integrity of our capital markets. Well, there we go.
Speaker 3: I see no hand. So maybe if the Republicans on
Speaker 3: this committee want to strengthen the capital markets, we can
Speaker 3: start by outlawing what President Trump is doing and it.
Speaker 2: Sort of threatens the credibility of US capital markets. I
Speaker 2: mean that's the argument that some of his critics have
Speaker 2: sort of made about this service, and some legal experts
Speaker 2: have also argued that this is kind of like a
Speaker 2: form of insider treading, where like a handful of companies
Speaker 2: be for access, you know, to privileged material on public
Speaker 2: information and read massive profits you know, and the expense
Speaker 2: of everyday like retail investors. So all these critics and
Speaker 2: some of these legal experts, they've raised the questions around
Speaker 2: whether this is just another way for Trump and his
Speaker 2: family to sort of boost their fortunes by profiting of
Speaker 2: policies announced by his administration.
Speaker 1: Perish the thought. And on top of this, Seneban Trump
Speaker 1: Media is also developing something called truth predict which would
Speaker 1: move the company into prediction markets. So what's the year
Speaker 1: behind truth predicting? How would it work?
Speaker 2: I think that's service if I'm not mistaken, it's been
Speaker 2: scaled back, so it would have been pretty similar to
Speaker 2: the way like some of these leading prediction markets platforms
Speaker 2: like you know, Polymarket and Calci, these new age sort
Speaker 2: of exchanges where people can bet on real world events,
Speaker 2: which could be like either a sporting event or a
Speaker 2: political event, or the weather. So you can create like
Speaker 2: a yes or no contract based on what event you're
Speaker 2: betting on. And they've really come up over the past
Speaker 2: couple of years, especially dating back to the twenty twenty
Speaker 2: four presidential election, which truly was like a turning point
Speaker 2: for the industry.
Speaker 1: So if you bet on anything, including the weather, you
Speaker 1: know obviously also bet on government actions as well.
Speaker 2: Yes, you have seen a number of examples of a
Speaker 2: series of well time pets ahead of important policy announcements,
Speaker 2: especially over the past twelve months.
Speaker 1: Coming up the suspiciously well timed bets of what the
Speaker 1: president will do next. Aban tell me more about these
Speaker 1: markets being bet on wars, political decisions and what the
Speaker 1: president is going to do next, which would have been
Speaker 1: unthinkable a couple of years ago. Tell me more about
Speaker 1: how we've arrived at this situation.
Speaker 2: Yeah, so you need to Daniel wind the clocks back
Speaker 2: a little bit and go back to twenty twenty four,
Speaker 2: especially during the presidential election. It sort of filmed the
Speaker 2: whole industry into like a mainstream phenomenon. Like previously, this
Speaker 2: industry was at the fringes pretty much like it was
Speaker 2: never anywhere close to the mainstream, and there were world
Speaker 2: like regulations that had been sort of developed to sort
Speaker 2: of govern prediction markets. But the presidential election really sort
Speaker 2: of changed that because back then a lot of the
Speaker 2: traditional sort of polling companies they sort of got a
Speaker 2: lot of outcomes wrong, whereas if you were a user
Speaker 2: on Calci or Body Market, like, the majority of the
Speaker 2: polls actually managed to get it right. They all along
Speaker 2: predicted that Donald Trump would win by a landslide, and
Speaker 2: that's pretty much what happens. And then you know, once
Speaker 2: the Trump administration came into power, the industry also benefited
Speaker 2: from easier regulations, like a lighter touch regulatory environment, which
Speaker 2: allowed these platforms to grow even further. Just to give
Speaker 2: you an idea, like Body Market and Calci, I think
Speaker 2: they were both valued at I think somewhere less than
Speaker 2: two billion before twenty twenty five, and now Calci is
Speaker 2: in talks to raise like a fresh round of funding
Speaker 2: at forty billion, So wrap your head around that, like
Speaker 2: from two billion to forty billion in like eighteen months.
Speaker 2: And body Market similarly there I think it talks to
Speaker 2: raise like fresh capital around twenty pillion. So this industry
Speaker 2: has just benefited like immensely from that breakout moment in
Speaker 2: twenty twenty four, and also like an easier regulatory environment,
Speaker 2: which has been a big tail wind.
Speaker 1: I mean, there's been a lot of reporting a rand
Speaker 1: suspiciously well timed bets on US government actions. In particular,
Speaker 1: what have you noticed about the timing of some of
Speaker 1: these bets and some of these decisions.
Speaker 2: Yeah, good question. More than one hundred and fifty wallets
Speaker 2: on polymarket may have traded on inside US military information,
Speaker 2: and it further sort of raises questions and concerns that
Speaker 2: the market could basically broadcast signals which can be exploited
Speaker 2: by foreigner adversaries. So that soldier who was charged back
Speaker 2: in April for using classifying information to bet on the
Speaker 2: removal of former ve President Nicholas Maduro, that.
Speaker 4: A Special Forces soldier has been charged for making more
Speaker 4: than four hundred THO dollars by betting on whether or
Speaker 4: not Venezuelan President Nicolas Maduro would be removed from office.
Speaker 4: And here's the thing. According to the indictment, the officer
Speaker 4: participated in the planning and execution of the operation.
Speaker 2: And back in March, just before Trump announced the strikes
Speaker 2: on Iran, like, there were a series of well tiked
Speaker 2: bets that were placed on some of these big exchanges.
Speaker 2: A number of punters have reportedly made about a million
Speaker 2: US dollars by correctly predicting when the United States would
Speaker 2: strike a run at the weekend. They were placed precisely
Speaker 2: a few minutes before the policy announcement from Trump, which
Speaker 2: means that obviously some insiders profited from early access to
Speaker 2: information from Trump Center.
Speaker 5: Circle six accounts in particular correctly predicted the timing of
Speaker 5: the strikes and made about a million dollars from those bets. Now,
Speaker 5: these were all accounts which were funded, generally speaking, the
Speaker 5: twenty four hours leading.
Speaker 2: Up to the strikes. And there's this former congressman called
Speaker 2: George Santos, Like he had publicly posted about attending the
Speaker 2: State of the Union address.
Speaker 4: I'm going to be there for the State of the
Speaker 4: Union in the gallery, guys.
Speaker 1: Just chill.
Speaker 2: Around the same time, Santos police bets against his own
Speaker 2: appearance on calci and then Galciem eventually detected those traits
Speaker 2: and flagged them as potentially suspicious and froze's account and
Speaker 2: alerted the CFTC and the Dog Justice Department is reportedly
Speaker 2: investigating George Santos, the former congressman, for insider trading.
Speaker 6: Sources say the former Republican congressman placed bets on Calci
Speaker 6: over whether he himself would be attending this year's State
Speaker 6: of the Union.
Speaker 2: So yes, Santos did bet on his own appearance at
Speaker 2: the State of the Union address.
Speaker 1: When it comes to when started trading. Even Donald Trump's
Speaker 1: iron teleprompt operator has been under investigation over bets on
Speaker 1: what Trump would say.
Speaker 6: How teleprompter operator allegedly used inside information to make more
Speaker 6: than one hundred thousand dollars betting on the president's speeches.
Speaker 6: The White House saying he's now on administrative leave.
Speaker 1: Isn't that indication of how easily these markets can be exploited.
Speaker 2: Yeah, it goes to the point that we were just
Speaker 2: discussing Daniel, like the guardrails that they put up, like Calci,
Speaker 2: Bollymarket and others have put up. It's just started enough,
Speaker 2: like things are still falling through the cracks. You know,
Speaker 2: if you're a lawmaker, or if you're in any way
Speaker 2: affiliated to any sort of agency in DC, or you're
Speaker 2: connected to political circles in any way, or if you're
Speaker 2: like an executive at a high ranking company, Like basically,
Speaker 2: anyone who's in a position to gain access to privileged
Speaker 2: information which is not yet public should be banned from
Speaker 2: creating accounts on these platforms. I mean, that's what a
Speaker 2: lot of critics have argued. But so far people are
Speaker 2: still getting around the system.
Speaker 1: So at a band, when you can leaveuly bet on anything,
Speaker 1: where does this end? Because it's already pretty dystopian. Some
Speaker 1: of the stuff you can bet on now is kind
Speaker 1: of like beyond what we would have thought of, you know,
Speaker 1: even sort of months ago. How much worse can it get?
Speaker 2: Yeah, I think only time will tell. Daniel Calgy and
Speaker 2: Body Market recently updated their rules to prevent users from
Speaker 2: creating certain types of contracts like for example, both platforms
Speaker 2: I think they band specific categories of bets which were
Speaker 2: sort of regarded as too violent or harmful or which
Speaker 2: could potentially involve insider manipulation, including like contracts on wars
Speaker 2: death things like political assassinations, nuclear conflicts, kidnapping, and missile strikes.
Speaker 2: So both platforms I think currently they prohibit individuals from
Speaker 2: betting on events that they can also directly influence. But
Speaker 2: there is this fight that is already brewing between like
Speaker 2: these new prediction markets platforms and traditional derivatives exchanges like
Speaker 2: the CME and others. So like, I suspect that at
Speaker 2: some point the outcome of this debate will be sort
Speaker 2: of decided by the higher codes, like by the Supreme
Speaker 2: Court potentially, and then you're probably going to see more
Speaker 2: concrete rules around the industry, and regulators are also trying
Speaker 2: to sort of understand like how you can classify like
Speaker 2: a typical events contract, whether that constitutes gambling, and whether
Speaker 2: that needs to be regulated by state gambling regulators instead
Speaker 2: of the CFTC over here, which currently regulates platforms like
Speaker 2: CALCRE and polymarket. But as of now, it's still evolving.
Speaker 2: Let's see where things shake out in a couple of years.
Speaker 1: And in the meantime, people could betting on this podcast
Speaker 1: right now, couldn't they? In the band pretty much and
Speaker 1: a band, Thank you so much for your time.
Speaker 2: Thanks so much for having me, Daniel pleasure talking to you.
Speaker 1: Also in the news along those first seal has become
Speaker 1: the first mammal to die of H five bird flu
Speaker 1: on the Australian mainland. The seal was found at Beechport
Speaker 1: in South Australia. It comes amid an escalation in the outbreak,
Speaker 1: which has seen three mass mortality events involving more than
Speaker 1: one thousand greater crested turns, and it's believed an eighteen
Speaker 1: year old solo hiker found dead last week at Natai
Speaker 1: National Park in New South Wales may have fallen after
Speaker 1: detouring off the main track. The family of Lily Hooper
Speaker 1: have paid tribute to the teenager as an inspiration, saying
Speaker 1: they hope people will be more cautious hiking after her death.
Speaker 1: Police last week were forced to apologize after mistakenly telling
Speaker 1: the family she'd been found alive. I'm Daniel James. Thanks
Speaker 1: again for listening to seven AM. We'll be back tomorrow.
Speaker 6: All on one