WEBVTT - CZM Rewind: Oops All Gambling, Political Betting Joins the News 0:00:01.680 --> 0:00:05.040 Call Zone Media. 0:00:06.440 --> 0:00:12.160 Last week, two major news networks, CNN and CNBC partnered 0:00:12.200 --> 0:00:17.400 with the so called prediction market Calshi, an online political 0:00:17.480 --> 0:00:21.680 betting platform, to use Calshi's real time betting data in 0:00:21.760 --> 0:00:25.840 TV news segments, online news content, and as Calshi announced 0:00:25.840 --> 0:00:29.920 on X the Everything app quote to integrate prediction Markets 0:00:30.000 --> 0:00:35.840 into CNN's global newsroom, with Kalshi threatening quote, a new 0:00:36.000 --> 0:00:40.800 era of media is here. This is it could happen here. 0:00:40.880 --> 0:00:46.360 I'm Garrison Davis. Regular CNN viewers may have noticed this 0:00:46.479 --> 0:00:51.400 integration has already been happening for some time. This past 0:00:51.440 --> 0:00:54.800 election cycle, news anchors used betting odds in place of 0:00:54.960 --> 0:00:58.960 an addition to polling data to weigh the likelihood of 0:00:59.240 --> 0:01:04.759 candidates when elections. CNN's chief data analyst, Harry Enton Nate 0:01:04.840 --> 0:01:07.280 Silver Protege, who used to work for five thirty eight 0:01:07.720 --> 0:01:10.880 trailblazed the use of political gambling data in news stories 0:01:10.959 --> 0:01:14.600 earlier this year. How she praised Entin by name in 0:01:14.680 --> 0:01:17.040 their announcement of the CNN partnership. 0:01:17.160 --> 0:01:17.600 Quote. 0:01:18.160 --> 0:01:21.600 Entin is an expert at translating what data and polling 0:01:21.680 --> 0:01:24.640 are saying on any given issue, and through this integration, 0:01:24.840 --> 0:01:28.160 he can tap into real time prediction markets data to 0:01:28.240 --> 0:01:33.000 better inform and fact check his reporting unquote. Here's an 0:01:33.040 --> 0:01:36.960 example of this reporting in a CNN segment from October 0:01:37.000 --> 0:01:37.960 twenty twenty five. 0:01:38.360 --> 0:01:40.399 If you go back six months ago, you go back 0:01:40.440 --> 0:01:42.880 to April k bauldwhen what were we looking at, Well, 0:01:42.880 --> 0:01:45.760 we were looking at the Democrats with a very clear 0:01:45.800 --> 0:01:48.360 shot of taking control of the US House of Representatives. 0:01:48.360 --> 0:01:50.920 According to the Calshi prediction market odds, we saw him. 0:01:50.800 --> 0:01:52.080 In an eighty three percent chance. 0:01:52.280 --> 0:01:55.800 But those odds have gone plummeting down now we're talking 0:01:55.840 --> 0:01:58.880 about just a sixty three percent chance, while the gopiece 0:01:59.000 --> 0:02:02.120 chances up like rocket up like gold, up from seventeen 0:02:02.160 --> 0:02:05.240 percent to now a thirty seven percent chance. So will 0:02:05.280 --> 0:02:08.600 look like a pretty clear Demo likely Democratic win in 0:02:08.639 --> 0:02:11.400 the House come next year has become much closer to 0:02:11.520 --> 0:02:14.560 toss up at this point, although still slightly leaning Democratic. 0:02:15.000 --> 0:02:18.679 Harry Enton never clarifies how these quote unquote odds are 0:02:18.840 --> 0:02:22.799 formed or what they really are. To a viewer who 0:02:22.919 --> 0:02:25.320 just tuned in or maybe isn't paying that much attention, 0:02:25.919 --> 0:02:30.280 it would be very unclear that these numbers are actually 0:02:30.320 --> 0:02:35.480 from a gambling website. They're just big percentages displayed on 0:02:35.680 --> 0:02:40.000 screen the way you would see polling data or legitimate 0:02:40.040 --> 0:02:44.800 information used in a newsroom. This short section using the 0:02:44.919 --> 0:02:48.400 Caushi prediction market odds was then followed by three minutes 0:02:48.440 --> 0:02:53.360 of analysis using selective mid term voting data from twenty 0:02:53.400 --> 0:02:56.920 seventeen to twenty eighteen to support the movement in these 0:02:57.000 --> 0:03:00.400 gambling odds. The gambling odds themselves with a load bearing 0:03:00.520 --> 0:03:05.960 piece of information in this piece. Calshi's main competitor, another 0:03:06.200 --> 0:03:10.920 so called prediction market called poly Market, partnered with x 0:03:10.960 --> 0:03:14.000 the Everything app and Yahoo Finance earlier this year to 0:03:14.080 --> 0:03:20.200 integrate their prediction data into online news content. Time Magazine 0:03:20.280 --> 0:03:24.440 and Sports Illustrated have also both launched deals with the 0:03:24.480 --> 0:03:30.360 prediction market platform Galactic. So what exactly are these prediction 0:03:30.600 --> 0:03:34.160 markets and how do they function? On poly Market and Calshi, 0:03:34.680 --> 0:03:37.400 users can bet yes or no on the outcome of 0:03:37.400 --> 0:03:41.000 a question relating to world events, which is called a market. 0:03:41.600 --> 0:03:44.880 As more money is wagered on either side, the odds 0:03:44.960 --> 0:03:50.240 of the outcome change. Currently, top questions include various predictions 0:03:50.240 --> 0:03:53.320 for Time Person of the Year, will the US strike 0:03:53.440 --> 0:03:55.600 Venezuela before the end of the year, the release of 0:03:55.640 --> 0:03:58.520 the Epstein files, and who will be the next president. 0:03:59.040 --> 0:04:04.000 Calshi has tried chances at six percent. Here's Polymarket CEO 0:04:04.320 --> 0:04:07.280 Shane Copelan explaining on sixty minutes. 0:04:07.640 --> 0:04:09.520 You make money if you're right, you lose money if 0:04:09.520 --> 0:04:12.040 you're wrong, and as a result, it creates this information 0:04:12.400 --> 0:04:13.520 that's really isful for people. 0:04:14.280 --> 0:04:17.360 These companies would like you to believe that the ratio 0:04:17.360 --> 0:04:20.240 of people betting yes or no on a certain outcome 0:04:20.279 --> 0:04:25.960 of world events is somehow useful or reliable information for 0:04:26.000 --> 0:04:30.480 the general public to forecast the future, whether that's through 0:04:30.839 --> 0:04:34.440 betting on the likelihood of an upcoming recession, the winner 0:04:34.480 --> 0:04:37.560 of a sports game, which days of the week Israel 0:04:37.600 --> 0:04:41.160 will bomb Gaza, or what movie will win Best Picture. 0:04:41.800 --> 0:04:45.039 Almost fifty million dollars is currently being wagered over a 0:04:45.040 --> 0:04:50.560 potential Russia Ukraine ceasefire in twenty twenty five. Production markets 0:04:50.640 --> 0:04:56.400 currently have three billion dollars in weekly trading volume. I 0:04:56.440 --> 0:04:59.800 do need to note these companies argue that hedging out 0:05:00.000 --> 0:05:04.280 homes of world events legally is not gambling, because that 0:05:04.480 --> 0:05:09.080 would be illegal. Payments through unauthorized gambling sites are illegal 0:05:09.360 --> 0:05:12.320 under the Unlawful Internet Gambling Enforcement Act of two thousand 0:05:12.320 --> 0:05:15.800 and six, which suppressed the early prediction markets of the 0:05:15.839 --> 0:05:19.760 two thousands, but CALSHI is regulated as a platform for 0:05:19.880 --> 0:05:24.320 trading financial derivatives rather than securities trading or straight up 0:05:24.400 --> 0:05:28.520 legalized gambling, and this determines what entity they have to 0:05:28.640 --> 0:05:33.200 register with and what regulations they're subject to. CALSHI launched 0:05:33.240 --> 0:05:35.920 in twenty twenty one with a federal license from the 0:05:35.920 --> 0:05:40.440 Commodity Futures Trading Commission, and after a year's long battle, 0:05:40.920 --> 0:05:44.160 in October twenty twenty four, a federal appeals court ruled 0:05:44.200 --> 0:05:48.400 in favor of CALSHI, allowing online prediction market betting on 0:05:48.680 --> 0:05:53.640 US elections, rejecting claims by the Commodity Futures Trading Commission 0:05:53.839 --> 0:05:57.520 that the practice was illegal gambling and their concerns that 0:05:57.600 --> 0:06:02.520 prediction market betting could undermine a lie election integrity. Former 0:06:02.640 --> 0:06:06.080 CFDC chairman Rostam benham My statement in May of twenty 0:06:06.080 --> 0:06:11.360 twenty four, reading quote contracts involving political events ultimately commoditize 0:06:11.400 --> 0:06:14.920 and degrade the integrity of the uniquely American experience of 0:06:14.920 --> 0:06:19.719 participating in the democratic electoral process. Allowing these contracts would 0:06:19.760 --> 0:06:23.640 push the CFTC, a financial market regulator, into a position 0:06:23.839 --> 0:06:30.360 far beyond its Congressional mandate and expertise quote. A week 0:06:30.480 --> 0:06:33.600 before his dad took office in January twenty twenty five, 0:06:34.160 --> 0:06:40.600 Donald Trump Junior became a strategic advisor at Calshi. Polymarket 0:06:40.680 --> 0:06:44.680 launched in twenty twenty without registering with the Commodity Futures 0:06:44.680 --> 0:06:48.440 Trading Commission, and was fined one point four million dollars 0:06:48.440 --> 0:06:51.440 by the CFTC in twenty twenty two for operating as 0:06:51.480 --> 0:06:56.000 an unregulated exchange and was henceforth prohibited from allowing bets 0:06:56.200 --> 0:07:00.720 from US based users. Though the Polymarket CEA EO sees 0:07:00.760 --> 0:07:01.760 it a little different. 0:07:02.360 --> 0:07:04.000 It was at one point four million dollars fine, and 0:07:04.000 --> 0:07:06.839 also it was a settlement and you could not have 0:07:07.000 --> 0:07:08.320 customers in the United States. 0:07:08.400 --> 0:07:10.160 Yeah, we had to go in geoblock trading in the 0:07:10.280 --> 0:07:13.640 US and move certain operations offshore. And it wasn't hey 0:07:13.680 --> 0:07:16.160 you're banned from trading the US. It's like until you're licensed. 0:07:16.200 --> 0:07:17.280 I mean it was breaking the law. 0:07:17.520 --> 0:07:19.720 I mean people say, bring the law. It's like which law, 0:07:19.840 --> 0:07:23.280 you know? So if anything it's incompatible. 0:07:22.760 --> 0:07:24.640 It's incompatible with the law. Yeah. 0:07:24.680 --> 0:07:28.240 With the regulatory matrix that existed the past two years, 0:07:28.440 --> 0:07:33.080 Polymarket has found to be facilitating illegal gambling and subsequently 0:07:33.200 --> 0:07:38.800 banned in the countries of Switzerland, France, the UK, Poland, Singapore, Belgium, 0:07:38.960 --> 0:07:45.360 Romania and Australia. Most of these bands just required geoblocking users, 0:07:45.600 --> 0:07:49.480 which can be easily circumvented through the use of a VPN, 0:07:49.960 --> 0:07:53.280 and since the financial transactions on poly market are all 0:07:53.280 --> 0:07:57.160 done through cryptocurrency, it's not clear that poly market is 0:07:57.200 --> 0:08:01.920 taking any steps to enforce these banksands beyond geo blocking. 0:08:02.680 --> 0:08:05.440 In the midst of facing regulatory hurdles and bands from 0:08:05.480 --> 0:08:10.560 across the globe, Polymarket still exploded in popularity last year, 0:08:11.040 --> 0:08:15.040 attracting investment from Peter Thiel's venture capital firm and hundreds 0:08:15.080 --> 0:08:19.120 of thousands of new users, primarily driven by betting on 0:08:19.560 --> 0:08:23.520 the US presidential election, speculation on whether Biden would drop 0:08:23.520 --> 0:08:25.920 out of the race and who Trump would pick as 0:08:26.080 --> 0:08:30.240 vice president, all despite the platform technically being banned in 0:08:30.320 --> 0:08:34.480 the United States after the first presidential debate in July 0:08:34.559 --> 0:08:37.440 twenty twenty four, around the attempted assassination of Trump and 0:08:37.480 --> 0:08:43.120 the RNC, Polymarket gained sixty thousand new accounts. The year prior, 0:08:43.400 --> 0:08:47.360 polymarket averaged two thousand, three hundred new accounts, per month. 0:08:48.080 --> 0:08:52.680 August twenty twenty four saw seventy thousand new accounts, September 0:08:52.920 --> 0:08:57.920 ninety thousand, October three hundred thousand, the month after Trump's 0:08:57.960 --> 0:09:03.760 second inauguration four hundred thousand. Currently, polymarket has over sixty 0:09:03.800 --> 0:09:07.839 thousand daily active traders and hundreds of thousands of monthly 0:09:07.880 --> 0:09:12.080 traders since October twenty twenty four. To give another example 0:09:12.120 --> 0:09:16.520 of their recent growth, in April twenty twenty three, Polymarket's 0:09:16.520 --> 0:09:21.000 monthly volume was about three million dollars. A year later, 0:09:21.320 --> 0:09:26.280 it was thirty nine million. In November twenty twenty four, 0:09:26.760 --> 0:09:30.880 it was two point five billion. Last month, it was 0:09:31.120 --> 0:09:46.640 three point seven billion. In summer twenty twenty five, cash 0:09:46.640 --> 0:09:52.640 Pttel's FBI and the CFTC under Trump dropped investigations into 0:09:52.679 --> 0:09:57.160 whether polymarket was illegally allowing US users to place bets 0:09:57.320 --> 0:10:03.120 using VPNs. Shortly thereafter, Donald Trump Junior's venture capital firm 0:10:03.280 --> 0:10:07.760 invested in the platform, and Trump Junior himself joined Polymarket's 0:10:07.800 --> 0:10:12.640 advisory board. Curiously, a few days after Trump Junior joined 0:10:12.640 --> 0:10:16.400 poly Market, the Commodity Futures Trading Commission announced it was 0:10:16.440 --> 0:10:19.120 going to allow poly market to operate in the United 0:10:19.160 --> 0:10:23.480 States after acquiring another company that held a US license. 0:10:24.440 --> 0:10:28.920 This past October, Trump's own truth Social announced it was 0:10:28.960 --> 0:10:34.040 partnering with Crypto dot Com to launch truth predict quote, 0:10:34.280 --> 0:10:39.200 a revolutionary prediction market backed by President Trump for enhanced 0:10:39.240 --> 0:10:44.840 decision making unquote. When Barry Weiss's sixty Minutes did a 0:10:44.840 --> 0:10:49.240 puff piece on Polymarket with its CEO last week, Anderson 0:10:49.320 --> 0:10:55.000 Cooper inquired about the risk of insider trading, poly Market's CEO, 0:10:55.120 --> 0:10:58.320 Shane Kaplan, seemed to think that a little bit of 0:10:58.360 --> 0:11:01.600 insider trading my be good actually. 0:11:01.760 --> 0:11:07.200 But predictive markets do rely on someone having some inside information. 0:11:07.720 --> 0:11:11.520 Yeah, I think that people going and having an edge 0:11:11.800 --> 0:11:14.439 to the market is a good thing. Obviously, you need 0:11:14.480 --> 0:11:16.600 to curate them, and you need to be really clear 0:11:16.600 --> 0:11:18.440 and stringent on where the line is drawn and like 0:11:18.600 --> 0:11:20.559 sort of ethics, and we spend a lot of time 0:11:20.559 --> 0:11:22.600 on that. But it's sort of an inevitability that this 0:11:22.600 --> 0:11:24.360 will happen and there's a lot of benefits from it 0:11:24.400 --> 0:11:25.760 and people will adapt. 0:11:26.679 --> 0:11:31.200 The CEO did not elaborate on what polymarkets practice of 0:11:31.720 --> 0:11:35.680 curating insider trading looks like and where their quote unquote 0:11:35.720 --> 0:11:40.400 stringent line is drawn, because in reality it doesn't seem 0:11:40.480 --> 0:11:45.240 this line exists. They essentially encourage insider trading through these 0:11:45.320 --> 0:11:49.600 vague statements and lack of clear enforcement. From the point 0:11:49.640 --> 0:11:53.080 of view of these platforms, insider trading makes their prediction 0:11:53.200 --> 0:11:57.439 markets more accurate, so it's a net positive, and if 0:11:57.480 --> 0:11:59.840 it fucks over some users on the other side of 0:11:59.840 --> 0:12:03.200 a bet, that's just the cost of business. Last week, 0:12:03.240 --> 0:12:06.800 an alleged insider trader won over a million dollars for 0:12:06.920 --> 0:12:10.960 bets on Google's twenty twenty five year in search rankings, 0:12:11.440 --> 0:12:15.360 listing twenty two out of twenty three in the correct order. 0:12:15.800 --> 0:12:18.200 This user has made a series of early bets related 0:12:18.200 --> 0:12:21.600 to Google the past year, like the exact release date 0:12:21.720 --> 0:12:25.440 of Google's Gemini three point zero, which they won one 0:12:25.559 --> 0:12:30.400 hundred and fifty thousand dollars on. But because this poly 0:12:30.600 --> 0:12:36.360 market user isn't trading stock, there's no clear regulatory mechanism 0:12:36.640 --> 0:12:40.520 to stop this behavior, and polymarket can't reverse these trades 0:12:40.640 --> 0:12:42.880 because they run through the blockchain, not that they would 0:12:43.120 --> 0:12:48.000 even necessarily want to. Professional gambler, political data analyst and 0:12:48.160 --> 0:12:52.200 poly Market advisor Nate Silver was also asked about insider 0:12:52.240 --> 0:12:56.280 trading on the China Talk podcast two months ago. 0:12:56.640 --> 0:13:00.880 Are you worried about insider trading with this, with all 0:13:00.880 --> 0:13:03.440 this political betting. I mean there's an aspect of like, look, 0:13:03.679 --> 0:13:07.400 these are all crypto, you know, you get on these 0:13:07.440 --> 0:13:11.360 markets with crypto and like like there were markets like 0:13:11.400 --> 0:13:14.800 which way is Suzanne Collins going to vote? And you 0:13:14.800 --> 0:13:18.000 know the sort of the like you know, like the 0:13:18.440 --> 0:13:22.079 tail outcomes for like a legislative assistant in her office? 0:13:22.320 --> 0:13:25.240 Are you know you can make ten times your salary? 0:13:25.320 --> 0:13:28.679 And like a minute, right, what's your what's your think 0:13:28.880 --> 0:13:29.320 think on this? 0:13:30.920 --> 0:13:32.079 For sure? 0:13:32.240 --> 0:13:33.800 I mean, look, I think there are a couple of 0:13:33.880 --> 0:13:37.360 qualifications though, Like, first of all, I think people on 0:13:37.400 --> 0:13:39.760 the inside often earn't as well as some formed as 0:13:39.760 --> 0:13:43.840 they think, and or there are some downsides having an 0:13:43.840 --> 0:13:45.440 inside view and not an outside of you. You might 0:13:45.480 --> 0:13:47.920 drinp the kool aid, so to speak, right, you might 0:13:47.960 --> 0:13:48.880 be in a bubble. 0:13:50.600 --> 0:13:52.800 Yeah, look, I mean I mean there are ones where 0:13:52.800 --> 0:13:55.880 it's like you can literally I mean there's been a 0:13:55.920 --> 0:13:58.400 lots of group chats people talking about like very very 0:13:58.440 --> 0:14:01.600 sketchy trades and one way bets that are being made 0:14:01.600 --> 0:14:03.679 in the stock market of like what's going to happen. 0:14:03.440 --> 0:14:04.360 With a trade deal? 0:14:04.360 --> 0:14:07.280 I mean you can literally be the person who decides 0:14:07.440 --> 0:14:10.760 right and be vetting on the side if weird. 0:14:11.000 --> 0:14:14.679 If there are incentives to make money in a world 0:14:14.679 --> 0:14:17.000 of eight billion people, many of them are very competitive, 0:14:17.000 --> 0:14:18.400 and all of whom and not all of them, most 0:14:18.400 --> 0:14:19.880 of them access to the internet, right, people are going 0:14:19.920 --> 0:14:21.760 to find a way a way to do it. 0:14:21.840 --> 0:14:25.560 Right, Let's pause here for a sec. What do you 0:14:25.720 --> 0:14:29.800 think Nick goes on to list as a comparison to 0:14:29.960 --> 0:14:34.920 political insider trading as like an unfortunate but somewhat inevitable 0:14:35.000 --> 0:14:38.360 consequence of our evolving system of finance. 0:14:39.000 --> 0:14:40.640 Like in the crypto space, we've seen like an increasing 0:14:40.640 --> 0:14:44.480 the number of like crypto kidnappings. Right, Well, I mean 0:14:44.480 --> 0:14:47.920 that's one of the consequences if people are worth vast 0:14:47.960 --> 0:14:51.040 amounts of wealth that isn't very secure. It's just it's 0:14:51.080 --> 0:14:53.640 just gonna gonna happen until you up security or have 0:14:53.720 --> 0:14:56.240 better solutions or whatever else. And so like, you know, 0:14:56.320 --> 0:14:59.720 I don't think there's necessarily anymore or less insider creating 0:14:59.760 --> 0:15:03.400 on polymarket then there might be for in sports betting side, 0:15:03.400 --> 0:15:05.120 we've seen a lot of sports betting scandals or for 0:15:05.200 --> 0:15:10.560 regular equities, you know, I believe the literature says that 0:15:10.600 --> 0:15:15.920 like members of Congress achieve abnormal returns from their stock portfolios, 0:15:15.960 --> 0:15:17.440 I'd have to double I'm sure there's some debate about that. 0:15:17.480 --> 0:15:18.960 I after like to double check that. 0:15:19.160 --> 0:15:19.320 Right. 0:15:19.880 --> 0:15:24.200 It's fine, bros. It's just like cryptocurrency kidnapping. It's fine. Actually, 0:15:25.200 --> 0:15:28.640 So Naate goes on to say that prediction market insider 0:15:28.680 --> 0:15:34.200 trading isn't that different from congressmen doing insider trading on 0:15:34.240 --> 0:15:38.320 the stock market, or like rigged sports betting, but he 0:15:38.680 --> 0:15:42.960 really neglects to emphasize that those things are also bad 0:15:43.080 --> 0:15:47.200 and should be aggressively clamped down on. That shouldn't be allowed, 0:15:48.240 --> 0:15:53.400 and prediction markets intentionally skirt regulation. They currently have far 0:15:53.480 --> 0:15:57.440 less legal protections for users against unfair practices, and with 0:15:57.560 --> 0:16:02.000 crypto they can be pretty anonymized, enabling bad actors. And 0:16:02.080 --> 0:16:06.560 now news companies are legitimizing turning everyone's phone into a 0:16:06.600 --> 0:16:11.680 corrupt casino for world events, whether that's Israel starving Palestine 0:16:12.040 --> 0:16:15.120 or how many tweets Elon Musk is going to publish 0:16:15.160 --> 0:16:19.400 this week. The day before CAW she announced their partnership 0:16:19.440 --> 0:16:24.440 agreement with CNN and NCNBC. CBS aired a sixty minutes 0:16:24.520 --> 0:16:28.200 puff piece on Polymarket anchored by Anderson Cooper. 0:16:28.880 --> 0:16:31.360 When we met with Copeland last month, more than three 0:16:31.400 --> 0:16:34.280 point six million dollars had been wagered on whether or 0:16:34.280 --> 0:16:37.960 not Venezuela's president, Nicholas Muduro would be out of power 0:16:38.000 --> 0:16:41.480 by the end of the year. Polymarket users didn't think, 0:16:41.520 --> 0:16:44.360 so they gave it only a twenty three percent chance. 0:16:44.880 --> 0:16:48.400 And if you buy no on that, and you're buying 0:16:48.440 --> 0:16:51.000 it at seventy eight cents and at the end of 0:16:51.000 --> 0:16:53.400 the year he's still in power, yeah, you get a 0:16:53.440 --> 0:16:56.120 dollar per share, so you've made a profit of twenty 0:16:56.560 --> 0:16:59.120 to share. I can't see why this would be I mean, 0:16:59.440 --> 0:17:01.760 I don't want to is a term addictive, but it 0:17:01.800 --> 0:17:02.640 would be compelling. 0:17:02.880 --> 0:17:05.639 I mean maybe it is a TICNII well, certainly compelling. 0:17:05.760 --> 0:17:06.520 This is how I see it. 0:17:06.760 --> 0:17:10.560 If you are into geopolitics, this creates an incentive for 0:17:10.680 --> 0:17:13.080 you to dig in to what's going on in Venezuela 0:17:13.320 --> 0:17:14.520 and try and get an edge. 0:17:15.040 --> 0:17:19.160 Anderson Cooper, who both works for the newly Calshi partner 0:17:19.200 --> 0:17:23.439 at CNN as well as CBS's Sixty Minutes, is so 0:17:23.840 --> 0:17:30.840 hesitant to call this clearly addictive practice addictive quote unquote compelling. 0:17:31.560 --> 0:17:36.280 Here's how Polymarket CEO Shane Copelan explained the platform earlier 0:17:36.440 --> 0:17:37.200 in this piece. 0:17:37.920 --> 0:17:42.200 It's a site where you can basically bet on current events, 0:17:42.520 --> 0:17:44.800 some sort of question about the future, like an election, 0:17:45.480 --> 0:17:47.639 and as a result, when a ton of people are betting, 0:17:48.000 --> 0:17:51.160 you get the betting odds, which basically tell you how 0:17:51.400 --> 0:17:52.920 likely each outcome. 0:17:52.680 --> 0:17:54.040 Is and how accurate is it. 0:17:54.320 --> 0:17:57.200 It's the most accurate thing we have as mankind right now, 0:17:57.359 --> 0:18:00.640 until someone else creates some sort of super crystal ball. 0:18:01.280 --> 0:18:05.920 Anderson Cooper responds with narration that the CEO quote may 0:18:05.960 --> 0:18:11.359 be prone to hyperbole, but he's definitely onto something unquote. 0:18:11.880 --> 0:18:15.720 In explaining how poly Market users attempt to seek truth 0:18:15.800 --> 0:18:18.680 and gain an edge, copeland told the story of how 0:18:18.760 --> 0:18:22.400 in twenty twenty four, an anonymous French user made over 0:18:22.520 --> 0:18:25.919 eighty million dollars on poly Market by betting on Trump 0:18:26.000 --> 0:18:29.560 winning the presidential election, and to bolster his bets, he 0:18:29.680 --> 0:18:33.360 contracted YouGov to conduct private polls in swing states. 0:18:33.560 --> 0:18:35.879 People thought he'd just liked Trump, and he had actually 0:18:35.880 --> 0:18:38.679 commissioned a ton of private polls. He did something called 0:18:38.720 --> 0:18:41.320 neighbor polling, which is you ask people who they think 0:18:41.359 --> 0:18:44.840 their neighbors are likely to vote for four scenarios for 0:18:44.880 --> 0:18:47.000 an election where there's a stigma to saying you're going 0:18:47.040 --> 0:18:48.840 to vote for somebody, and people feel some sort of 0:18:48.920 --> 0:18:51.960 social awkwardness. And what he noticed was there was huge 0:18:51.960 --> 0:18:54.520 discrepancy in the neighbor polling versus the normal polling, and 0:18:54.560 --> 0:18:57.280 the neighbor polling favored Trump enormously. 0:18:57.320 --> 0:18:58.560 He thought Trump was undervalued. 0:18:59.160 --> 0:19:01.280 If this guy was not able to make eighty million, 0:19:01.280 --> 0:19:03.359 but rather able to make eighty thousand dollars, he would 0:19:03.359 --> 0:19:06.240 have never gone through the hassle. But when you get 0:19:06.240 --> 0:19:08.679 markets that are big enough, you create this incentive for 0:19:08.760 --> 0:19:11.080 people to go above and beyond to try and find truth. 0:19:11.880 --> 0:19:14.879 What the CEO is arguing here is that the sheer 0:19:15.040 --> 0:19:19.360 scale of money being wagered creates incentive to quote unquote 0:19:19.560 --> 0:19:24.239 find truth. In media discussions of prediction markets, there's this 0:19:24.440 --> 0:19:29.679 specter of objectivity around the gambled odds, which obviously the 0:19:29.760 --> 0:19:32.960 CEO of poly Market has a personal incentive to encourage. 0:19:33.400 --> 0:19:38.120 But Anderson Cooper here doesn't challenge this notion of capital 0:19:38.240 --> 0:19:42.840 t truth. Even though Donald Trump was way ahead in 0:19:42.960 --> 0:19:47.440 prediction market odds back during the twenty twenty election, which 0:19:47.480 --> 0:19:50.800 had his chances of winning that election far higher than 0:19:50.840 --> 0:19:55.639 what pure polling models showed. Kalshi claims that prediction markets 0:19:55.680 --> 0:20:00.000 can help journalists quote unquote fact check, but doesn't explain 0:20:00.359 --> 0:20:05.800 how fact can be determined from speculative gambling markets. Where 0:20:05.880 --> 0:20:09.760 is the fact in gambling? Well, we will find out 0:20:10.240 --> 0:20:25.800 after these ads. To quote from poly market advisor Nate 0:20:26.040 --> 0:20:30.160 Silver's blog The Silver Bulletin quote, It's basically good when 0:20:30.240 --> 0:20:34.600 people are more exposed to probabilities and they become more normalized. 0:20:35.119 --> 0:20:39.160 But of course I also analyze poles and build probabilistic 0:20:39.200 --> 0:20:43.879 models myself. In that capacity, I strongly disagree with the 0:20:43.920 --> 0:20:47.600 notion that prediction markets can serve as a good substitute 0:20:47.640 --> 0:20:51.080 for poles. These sorts of claims are sometimes advanced by 0:20:51.119 --> 0:20:55.359 the prediction market companies themselves, including poly Market. To be fair, 0:20:56.040 --> 0:20:59.960 one minor pet peeve is that both reporters and readers 0:21:00.440 --> 0:21:06.640 often confuse probabilities for poll results unquote. As Nate goes 0:21:06.680 --> 0:21:09.800 on to explain, if Trump is up fifty five to 0:21:09.880 --> 0:21:14.000 forty five over Kamala Harris on a prediction market, that's 0:21:14.080 --> 0:21:18.000 not saying that Trump is expected to win by ten points. 0:21:18.600 --> 0:21:21.960 It means that ten percent more users on the website 0:21:22.320 --> 0:21:25.880 favor Trump winning, which is pretty close to a toss up. 0:21:26.520 --> 0:21:30.439 This confusion is a huge problem, which is bolstered in 0:21:30.520 --> 0:21:34.560 both how prediction market companies market their platform, but also 0:21:34.720 --> 0:21:38.960 how journalists use gambling data in news stories. If you 0:21:39.000 --> 0:21:42.399 see a social media post, an advertisement, or a random 0:21:42.440 --> 0:21:47.600 news segment showing percentages tied to pictures of two politicians 0:21:47.600 --> 0:21:50.280 in a race without context, those betting numbers could be 0:21:50.320 --> 0:21:54.320 interpreted in a number of ways and influence someone's perception 0:21:54.560 --> 0:21:57.560 of an election and maybe even their choice on who 0:21:57.600 --> 0:22:00.360 to vote for, or even whether to vote at all. 0:22:00.920 --> 0:22:05.120 In an October speech, Zora Mumdani reference to Calshi billboards 0:22:05.359 --> 0:22:08.880 predicting a Cuomo victory in the Democratic primary. 0:22:09.520 --> 0:22:11.920 When I walked the length of Manhattan just a few 0:22:12.000 --> 0:22:17.200 days before the election, hundreds of New Yorkers marched alongside me. 0:22:20.119 --> 0:22:23.240 And when we strolled into Times Square under a billboard 0:22:23.280 --> 0:22:26.920 with betting odds that showed Cuomo's chances of winning at 0:22:26.920 --> 0:22:30.520 nearly eighty percent, we knew that the so called experts 0:22:30.520 --> 0:22:37.240 were set to get it wrong yet again. Andrew Cuomo 0:22:38.000 --> 0:22:42.560 was supposed to be inevitable. When you see the Calshi 0:22:42.640 --> 0:22:45.280 odds that have our chances of victory in the nineties. 0:22:46.440 --> 0:22:50.000 Know this. You are reading the same things that Andrew 0:22:50.040 --> 0:22:53.720 Cuomo read when he went to sleep each night in June, 0:22:55.000 --> 0:22:59.920 believing that his victory was promised. We cannot allow complace 0:23:00.200 --> 0:23:02.320 see to infiltrate this movement. 0:23:04.480 --> 0:23:08.000 Cal She excitedly shared the latter half of that clip, 0:23:08.359 --> 0:23:14.399 proclaiming breaking zoron Mamdani references his Calci odds on stage, 0:23:14.840 --> 0:23:20.879 Calshi is mainstream unquote despite this clip demonstrating how prediction 0:23:21.000 --> 0:23:26.960 markets often suffer from inaccurate bias. Last week, Discount Steve Kornaki, 0:23:27.320 --> 0:23:29.840 former five poin thirty eight analyst and now CNN's data 0:23:29.880 --> 0:23:34.919 expert Harry Enton shared this segment about the Tennessee District 0:23:35.040 --> 0:23:38.439 seven special election on x the Everything app with the 0:23:38.480 --> 0:23:42.320 caption odds are Dems will come within ten points of 0:23:42.359 --> 0:23:44.720 a win, if not outright win. 0:23:45.280 --> 0:23:46.840 I would say, if you had to look at the 0:23:46.880 --> 0:23:50.639 congressional map any district that Donald Trump won by twenty 0:23:50.680 --> 0:23:53.159 two points, you would say, you know, you've got like 0:23:53.359 --> 0:23:55.680 nearly a one hundred percent chance of winning if you're 0:23:55.720 --> 0:23:56.680 running for Congress there. 0:23:56.680 --> 0:23:58.160 But what are the prediction markets saying right. 0:23:58.080 --> 0:23:59.800 Now, Yeah, what are we talking about in terms of 0:24:00.000 --> 0:24:02.919 diction market huts. Look, the Democrat has a fifteen percent 0:24:03.040 --> 0:24:05.879 chance of winning in that race. Okay, a fifteen percent chance, 0:24:06.080 --> 0:24:08.640 which ain't nothing in a district that Donald Trump won 0:24:09.400 --> 0:24:11.520 by twenty two points. But here, I think is the 0:24:11.600 --> 0:24:13.560 key nugget on this side of the of the ledger, 0:24:13.720 --> 0:24:16.000 and that is a GOP win by under ten points. 0:24:16.080 --> 0:24:19.320 There's a sixty eight percent chance of that. So there 0:24:19.400 --> 0:24:23.040 is a more than two thirds chance that the Republican candidate, Yes, 0:24:23.119 --> 0:24:27.800 they win, but they win by a significantly lower margin 0:24:27.800 --> 0:24:30.800 than Donald Trump. We're talking about double digits, smaller. We're 0:24:30.840 --> 0:24:34.240 talking about a huge, huge shift to the left. We're 0:24:34.240 --> 0:24:36.879 talking about When you add these two together, we're talking 0:24:36.880 --> 0:24:39.520 about a more than eighty percent chance that there is 0:24:39.560 --> 0:24:42.159 a clear double digit shift to the left, and a 0:24:42.200 --> 0:24:45.120 fifteen percent chance the Democrat actually wins in a district 0:24:45.320 --> 0:24:47.560 that Donald Trump won by twenty two points. That just 0:24:47.600 --> 0:24:51.240 shows you how bad the environment is for Republicans right now, 0:24:51.280 --> 0:24:52.879 that the Democrat has any sort of a chance in 0:24:52.920 --> 0:24:54.400 this talk to me about with a special lak. 0:24:54.440 --> 0:24:59.960 He's just authoritatively rattling off complete speculation on a Democrat victor. 0:25:00.560 --> 0:25:05.399 As big screens display percentages in huge text with source 0:25:05.600 --> 0:25:10.480 Calci in tiny text the bottom of the screen. Ordinary 0:25:10.640 --> 0:25:14.080 polling showed that this was a close race that leaned 0:25:14.160 --> 0:25:17.640