The WSJ On Polymarket's Questionable Ads

Summary

Better Offline: "The WSJ On Polymarket's Questionable Ads"

Podcast: Better Offline (Cool Zone Media & iHeartPodcasts)
Date: July 1, 2026
Host: Ed Zitron
Guests: Katherine Long & Caitlin Ostroff, Wall Street Journal reporters

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Episode Overview

In this episode, host Ed Zitron sits down with Wall Street Journal journalists Katherine Long and Caitlin Ostroff to discuss their bombshell investigation into Polymarket, a blockchain-based prediction market platform. The conversation centers on Polymarket’s recent influencer marketing campaign, which used fake videos to falsely portray big money wins, circumvented US regulations, and aggressively targeted American (especially college-age) audiences. The discussion dissects the mechanics of the scheme, regulatory gaps, the risks for young users, and broader implications for society as gambling and financialization become increasingly intertwined with social media.

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Key Discussion Points & Insights

1. The Polymarket Influencer Scheme – Anatomy of Deception

• Fake Bets, Fake Wins, Fake Websites

  • Polymarket orchestrated an influencer marketing campaign where creators posted videos gambling on high-profile bets and showing “big wins”—but everything was staged.

  • Influencers used a dummy version of the Polymarket website (“poiy market”) built by Polymarket itself, creating fake bets and wins that were impossible or actually losers in reality.

    • Quote:

      "All of those bets were actually fake. They were placed on a dummy platform that Polymarket built to almost exactly, but not...precisely resemble the website."
      —Katherine Long (02:38)

  • Some creators manipulated footage, used outdated headlines, or showed fabricated account balances of tens or even hundreds of thousands of dollars.

    • Quote:

      "These balances were fictitious. But the video showed their account balances on polymarket in the tens of thousands of dollars. Some even had balances over a hundred thousand dollars."
      —Katherine Long (08:07)

• Most videos portrayed wins; only a tiny handful depicted losses. The overwhelming message: "You can make money here."

2. Massive Scale & Targeted Audience

• Scale of the Operation
  • About 1,100 videos, involving at least ten creators, were reviewed by the WSJ. The reporters believe this is just a fraction of the actual campaign.
    • Quote:

      "We identified dozens of other creators...but we thought our sample size was sufficient."
      —Katherine Long (04:42)

• Targeting Young, American Audiences
  • Many creators were college-aged, and marketing instructions required that at least 60% of influencer audiences be based in the US, despite Polymarket being banned here.
    • Quote:

      "We'll only pay you if at least 60% of your audience is based in the United States."
      —Katherine Long (06:27)

3. Regulatory Loopholes and Ongoing Investigations

• Polymarket & US Law
  • Polymarket settled with US regulators in 2022, agreeing not to offer its platform to US traders, but VPN workarounds make this trivial to bypass.
  • Some influencers were from the US, some from Canada, but content was plainly aimed at Americans.
    • Quote:

      "Anybody with a VPN has been able to access Polymarket, even if they're based in the US..."
      —Katherine Long (03:44)

• Ongoing CFTC Investigation
  • The Commodity Futures Trading Commission is now investigating Polymarket, but the scope is still unclear.
    • Quote:

      "The contours of that investigation are as yet unclear...I know that it is ongoing and extensive according to a person familiar with the investigation."
      —Katherine Long (16:54)

4. Real vs. Simulated Platforms – Discovery and Exposure

• Detective Work
  • The WSJ team initially believed the videos were real—until a slip where one influencer accidentally exposed the "poiy market" URL. This led to the discovery that all bets shown in these influencer videos happened on fake, near-identical websites with no real money.
    • Quote:

      "...one of these creators had seemingly made a mistake and accidentally left the URL of this fake site..."
      —Katherine Long (11:53)

  • Developers instructed influencers to disguise the use of simulated sites by, for instance, changing capitalization in URLs.

5. Comparable Platforms & the Growth War

• Kalshi vs. Polymarket
  • Kalshi is a US-regulated prediction market, whereas Polymarket generally operates offshore (with only a minor US product).
  • Kalshi has taken the lead in trading volume since late 2025.
    • Quote:

      "For the month of May, [Kalshi had] almost twice the amount of volume on Kalshi versus Polymarket."
      —Caitlin Ostroff (23:10)

  • State-level worries over gambling and regulatory loopholes are growing, especially since platforms argue federal status exempts them from state regulation or taxes.

6. The Real Risks: Losses, Addiction, and Social Impact

• Most Users Lose
  • WSJ analysis shows 70% of Polymarket users lost money; ratio of losers to winners on Kalshi is about 2.9 to 1.
    • Quote:

      "About 70% of people who had traded on polymarket lost money...On Kalshi, it was about 2.91 [losers to winners]."
      —Caitlin Ostroff (25:51)

• Addiction and Vulnerable Populations
  • Polymarket has actively recruited college students through campus clubs and fraternities, paying them for signups and hosting parties.
    • Quote:

      "Polymarket has set up relationships with college clubs, fraternities...offering them payments in exchange for signing their classmates up to the site."
      —Katherine Long (30:04)

  • Kalshi has recently added language about addiction and self-exclusion, but most of these platforms frame themselves as trading, not gambling.
• Doubt and Regulatory Grey Zones
  • Although agencies (FTC, CFTC) require ads to be truthful, enforcement appears minimal so far.
    • Quote:

      "There are laws from at least two federal regulators that do touch on how prediction markets market themselves to the public."
      —Caitlin Ostroff (32:05)

• Societal Impact
  • Zitron and guests express deep concern about the normalization and gamification of financial speculation for young people. Katherine Long recounts watching the State of the Union through the lens of a prediction market streamer:
    • Quote:

      "It was simultaneously more exciting. And I think also slightly concerning...it very rapidly...turned into something closer to a game..."
      —Katherine Long (23:55)

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Notable Quotes & Moments

"It's truly a massive scale operation...just the tip of the iceberg as far as Polymarket's marketing operation."
—Ed Zitron & Katherine Long (04:27-04:42)

"They also implied that they were wealthy in other ways, including by showing account balances on this dummy website...balances over a hundred thousand dollars..."
—Katherine Long (08:07)

"The impression is certainly that, you know, these people are, are making enough money off of polymarket to support themselves in fairly high style."
—Katherine Long (08:07)

"It's so strange. How is this not illegal?"
—Ed Zitron (16:33)

"Kalshi...has fairly successfully been playing within this federal regulatory structure. Polymarket has been playing outside of it."
—Katherine Long (21:30)

"About 70% of people who had traded on polymarket lost money and losers to winners on Kalshi was about 2.91."
—Caitlin Ostroff (25:51)

"Polymarket in particular has set up relationships with college clubs, fraternities offering them payments in exchange for signing their classmates up.”
—Katherine Long (30:04)

"It feels like it needs regulation in an extreme way that basically doesn't exist yet."
—Ed Zitron (23:19)

"...both Polymarket and its primary competitor Kalshi have ties to the White House in the form of involvement from Donald Trump Jr."
—Katherine Long (33:41)

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Timestamps for Important Segments

• 01:53 – Intro & Guest welcome
• 02:29 – Explaining Polymarket’s influencer scam
• 04:42 – Scope and scale: 1100 videos reviewed
• 06:27 – Audience targeting & marketing strategies
• 11:05 – Discovery of fake websites ("poiy market")
• 17:56 – Differentiation between Polymarket & Kalshi
• 21:23 – Federal/state regulatory battles
• 23:10 – Trading volume: Kalshi outpaces Polymarket
• 25:51 – 70% of prediction market users lose money
• 30:04 – Polymarket’s campus recruiting, fraternity deals
• 32:05 – FTC and CFTC regulations and loopholes
• 33:41 – Political connections: Trump Jr. links
• 35:19 – Reflections on social and personal impact

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Tone & Closing Thoughts

The episode is a lively but sobering investigation, mixing the host’s irreverent humor (“I am going to need to take a walk around the block”) with the guests’ calm but urgent journalistic delivery. Zitron and WSJ reporters highlight the wild west feeling of both the crypto sector and the influencer economy, especially as they intersect to create a new form of potentially addictive, barely regulated online gambling targeting young Americans.

"What really stuck with me...was just how good the videos were at purporting to be on Polymarket. And it gave me a bunch of anxiety for family members who are younger...how hard this is to actually know. Is what you're watching truly something real or is it deceptive?"
—Caitlin Ostroff (35:27)

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Contact & Further Information

Find the Journalists:

• WSJ: Print & online at WSJ.com
• Socials:
  • Katherine Long: Twitter @klong, Bluesky (username forgotten!)
  • Caitlin Ostroff: @CEOstroff everywhere

Host:

• Ed Zitron: betteroffline.com, @edzitron on socials

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For listeners: This episode traces not only a revelatory scam in the tech/crypto space but also the deeper concerns about the normalization of financial risk and gambling in everyday online culture, especially among young people. The reporting team urges those with their own experiences to get in touch for future coverage.

Transcript

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[Ed Zitron]

Media hello and welcome to Better Offline. I am of course your host, Ed Z. Today I am joined by two incredible reports from the Wall Street Journal, Katherine Long and Caitlin Ostroff, who just published an incredible and truly horrible story about Polymarket and their extremely questionable influencer marketing campaigns. Katherine, Caitlin, thanks for joining me.

[Katherine Long]

So happy to be here. Thanks for having us Ed.

[Ed Zitron]

Okay, so walk me through exactly what Polymarker was doing with these influencers on social media. Like what were they paying for? What was the end result?

[Katherine Long]

So the end result was an onslaught of videos that appeared to show college age social media Creators betting and winning large amounts of money online. But what we found is that all of those bets were actually fake. They were placed on a dummy platform that Polymarket built to almost exactly, but not, not precisely resemble the website. And some of the wins that the influencers showed themselves having were faked as well. The creators were using things like outdated footage or altered headlines to suggest that they won really lucrative bets, when in fact they would have lost.

[Ed Zitron]

Right. So just, just to be clear, so the bets were fake, the website was fake, but also the bets would have lost.

[Caitlin Ostroff]

A lot of them would have. Not every single one. But the majority of the videos where bets were placed would have actually lost in real life, but they were depicted as winning.

[Ed Zitron]

That's truly awful. I thought Polymarket was illegal in America as well.

[Katherine Long]

You would be right about that. Polymarket entered a settlement with federal regulators back in 2022 in which they agreed to stop offering their platform to US Traders. But as anybody who's used a VPN knows, it's pretty trivial to get around things like that kind of geofencing. Anybody with a VPN has been able to access Polymarket, even if they're based in the US or other countries where Polymarket is banned.

[Ed Zitron]

And so these influencers, they're American based, Right?

[Caitlin Ostroff]

So it's a mix. Some are based in Canada, some are based in the U.S. and then there's likely creators in other jurisdictions as well. But that was sort of the mix that we looked at in our corpus.

[Ed Zitron]

And so it looks like here is about 1100 videos he went over. So that's truly, it's truly a massive scale operation. But do you think it's bigger than the ones you saw or is it just it? Like, did you get any idea of the total scale?

[Katherine Long]

Yeah. So we reviewed 1100 videos that had been posted between late December. Correct me if I'm wrong, Caitlyn, was it December? Late November, Late Last year? Late 2025? By all accounts, late 2025 and mid May of so 1100 videos, 10 creators. My impression and belief from my reporting and Caitlin's reporting and the reporting of our other colleagues is that this is just the tip of the iceberg as far as Polymarket's marketing operation. We identified dozens of other creators who are posting videos in similar formats. We didn't scrape their videos, but we thought our sample size was sufficient.

[Ed Zitron]

That's crazy. So walk me through the exact stage. So you have a video of a guy based guessing whether Trump will say inshallah, I think was one of probably not in your but like Trump will say burger or something and then they're staring at the TV and then they go, oh, he said burger. But the website they were making the bet on was just completely fake.

[Caitlin Ostroff]

Yes, just completely fake. Yeah. So, yeah. So in these videos, when you watch them, you will often see a college age student kind of go in with this hook phrase where they'll say, throw what? Or wait what? And then they will be like, oh, I can bet on this market. And they'll depict the market and then sometimes it will show essentially what the outcome is of that market. They'll cut to video of Trump saying a certain word or phrase and then they'll jump up and down and sort of give the impression that they've won.

[Ed Zitron]

And this is targeting children. So college age kids like that, it's explicitly targeting young people?

[Katherine Long]

Well, I wouldn't go that far as to say it's explicitly targeting on people. But what we do know about who it's targeting is that it is targeting Americans. When we looked at Polymarket's instructions to people who were paid to boost the reach of this campaign online, a third party contractor that Polymarket worked with to help manage the campaign said, we'll only pay you if at least 60% of your audience is based in the United States. And then to, you know, as to the point you alluded to, yes, the, the creators who are making these videos, they are college aged college students, people in their early to mid-20s.

[Ed Zitron]

Certainly Jesus feels like introducing children to gambling on some level. I mean, maybe you can't say that, but I'm certain. I mean, it seems like showing young people doing something and saying, you can get bread, which is a young person's way of referring to money for the old heads listening. I knew that one. I'm not that old, but it just, it feels quite dystopian is kind of what I'm getting at.

[Caitlin Ostroff]

It certainly is marketed to give the impression that this is a way to make money off of what you know. So the majority of the bets that we looked at, you know, they showed a trade being placed. Most didn't show an outcome. But for those that did, you know, almost all of them, it was someone winning. I think there was like what, four or five, Catherine, in the group that we looked at where someone was depicted as losing their bet. So the overarching message was, you can make money.

[Ed Zitron]

I kind of find it fascinating that there's one where they lost. But anyway, keep going.

[Katherine Long]

Yeah, I was just going to chime in and add that in addition to the Creators showing themselves appearing to win money. They also implied that they were wealthy in other ways, including by showing account balances on this dummy website where, again, no real money was being traded. These balances were fictitious. But the video showed their account balances on polymarket in the tens of thousands of dollars. Some even had balances over a hundred thousand dollars. And one of the creators whose videos we reviewed, she shows herself placing bets from a San Francisco bedroom. And then she'll have a video where she, she's showing herself dancing on a, on a beach in front of the Golden Gate Bridge. And she says, polymarket funds my life. And there's a hello Kitty sticker in the corner that says, I am unemployed. So the impression is certainly that, you know, these people are, are making enough money off of polymarket to support themselves and support themselves in fairly high style.

[Ed Zitron]

And it sounds like kind of like a real operation here, like in the sense that there is like they're building functional dummy websites. Because looking as we speak, I have the animated gifs from the piece up and it's. These seem quite intricate. These, perhaps they're vibe code and it doesn't really matter because no payment rails are in there. But these seem like they are built to look identical.

[Caitlin Ostroff]

They are extremely convincing. Catherine and I and our colleagues were looking at these for about two weeks before our colleague Neil Mehta realized that, like, this is not Polymarket. Like, we started off firmly believing that this was Polymarket. Right.

[Ed Zitron]

Well, when you say that, so this is the PO I Y market website. When you say it, believe you believed it was polymarket. What did you think the purpose was when you found it?

[Caitlin Ostroff]

We thought these were just videos that, you know, people were making, showing themselves placing actual trades on polymarket. I don't think we had a theory at the onset as to why they were doing this, but we came across a bunch of these videos and we were curious to understand what was happening, who these people were, how they were making money. And so we have this database of all of the Poly Market trades that we had been building over the past several months. And we started off trying to trace these trades. We wanted to understand what bets were happening, who was making these, and we went to go about finding those because all of Polymarket's data is public. And we very quickly realized that we could not figure out, like, we couldn't place these trades. We could not find the actual trades shown in the video. And it took us a minute to realize that this was not actually happening on polymarket. And the red flag for that Ended up being that website, poiy Market, which our colleague Neil Mehta saw and flagged to us.

[Ed Zitron]

Hell yeah. Good work, Neil.

[Katherine Long]

Yeah, major shout out to Neil.

[Ed Zitron]

Here's the thing, though, so wait, maybe I'm just misunderstanding this. So not only did the trades, did some of the trades never exist? Like it was never possible to bet on that particular outcome.

[Katherine Long]

All of the markets that we saw did exist. And that's one of the reasons why it took us so long to understand that we were looking at a fake website. I mean, we were combing through this database Caitlin has been painstakingly building over months of every single trade on polymarket, which, you know, is accessible to us because polymarket is a, is a blockchain based system, so everything is public. And, you know, we were looking for these trades that appear to have taken place.

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[Katherine Long]

We saw a video of it taking place and it just didn't seem to exist in this database. And at that point we, you know, thanks to Neil's eagle eyes showing that, you know, one of these creators had seemingly made a mistake and accidentally left the URL of this fake site. POI Market. Market. P O I Y Market. Yeah. That polymarket had built in his video. And it was only because of that clue that, that we started being able to unravel that all of these videos that we were looking at were actually being placed on fake websites, which, as we've mentioned, the. The fake websites were, were almost identical to the real Poly Market. But, you know, once we started looking for some more of these, these clues, once we knew that the website was fake, we were able to distinguish various ways in which to tell the fake website from the real website.

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[Ed Zitron]

Refreshers contain caffeine.

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[Ed Zitron]

So was that, was it just poi market or were there like multiple other fake websites as well?

[Caitlin Ostroff]

I mean, we like, once we started looking for other like simulated polymarket websites, we did find a couple of others, but the, I think all of the ones that like we were able to identify specific, specifically what the website was, was polymarket. There was one other where it was like this developer link that appeared in a handful of videos where it was like one of the polymarket developers, their name.dev.polymarket.dev. and so it was this internal development site that appeared in a couple of the videos that also seemed like it was being used. So we weren't always certain which simulated platform the trade was happening on in part because we heard from creators, part of the instruction that they got in making these videos was to not make it obvious that it was on a simulated website. So if you were on a poiy market, you might uppercase the I to make it appear like Poly Market. And so, you know, we came across a handful of these, but I don't think we are exactly certain of how much each one was used.

[Ed Zitron]

That's, it's so strange. How is this not illegal? I mean, I guess if the website itself is illegal, then illegally advertising the illegal website is kind of just a. Just kind of doubling down at that point. Doesn't really matter. Like, has the government. I saw that there was some sort of federal inquiry into Polymarket. Was it related to this story?

[Katherine Long]

We are not sure of the precise parameters or subject of the federal inquiry. You're referring, I assume, to CFTC investigation that we reported on last week. Yeah. The contours of that investigation are as yet unclear. You know, I know that it is ongoing and extensive according to a person familiar with the investigation. You know, I should add as well that the cftc, the Commodity Futures Trading Commission, the agency conducting this investigation, a spokesperson for that agency declined to comment on the existence of an investigation, citing agency policy.

[Ed Zitron]

Yeah, that. It's just so strange because I don't think I've seen anything like this in tech outside of crypto, which I know is. I know that crypto is kind of. I think Polymarket is a crypto product.

[Morgan Neville]

Right?

[Ed Zitron]

Or it's a blockchain one.

[Katherine Long]

Yeah, it is.

[Ed Zitron]

They moved on from that crap. That crap. Referring to a comment that I'm making, not the journalist in question.

[Katherine Long]

No. Polymarket is a. Is a crypto. Is a crypto. It's. It's on. It's on crypto rails, as they would say.

[Caitlin Ostroff]

Yes.

[Ed Zitron]

That's so strange. What differentiates this from Kalshi because I basically consider them the same website at this point, but I guess they're different somehow.

[Caitlin Ostroff]

So we like, again, our social media feeds are just full with videos for different platforms. We came across the Polymarket videos of them placing these trades. We've certainly come across a lot of videos of. Of people promoting Kalshi, but we haven't come across anything similar in the sense of Polymarket was telling people, use the simulated website, create these bets and do not disclose that you have any affiliation. We are always looking to see what we might be missing in coverage of this piece. But Kalshi is, I guess one difference between it and Polymarket is also that it is regulated by cftc. Polymarket has a new US product launched late last year that is CFTC regulated, but the broader platform is still offshore. So we try to look to see what we might be missing in this space. But the Polymarket videos kind of stuck out to us as we were going through our own social media feeds, just trying to understand why we were getting so many of these, what was behind that and we did not expect it to lead to these simulated bets.

[Ed Zitron]

So are your Algorithms. So did you do this on your own phones or like a journal approved one? Because I'm wondering, are your algorithms ruined now?

[Katherine Long]

Oh yeah, my algorithm is cooked.

[Ed Zitron]

Yeah, it's just like 18 year old Zinn kids telling you to gamble on the future.

[Caitlin Ostroff]

All we see, our prediction markets, I see no other content at this point.

[Katherine Long]

Yeah, yeah, that must be awful.

[Caitlin Ostroff]

I mean it's great for keeping track of things.

[iHeart Podcast Announcer]

It's probably not good for our long term mental health.

[Ed Zitron]

Yeah, this is why you've just got to look at like lifting videos and palace cats. That's how I get around this. Just like you just need to cleanse your feet every so often. But on a, on a legal level, just like on a thing, what differentiates? Like you said that Polymarket has a US approved product. Is like, is that a prediction market? Is it something different? And why is Kalshi able to operate legally but not Polymarket?

[Katherine Long]

Yeah, so taking a zooming out here a bit, right, so Kalshi, Polymarket's biggest competitor, Kelsey and Polymarket, they're both prediction markets. The biggest distinction between the two is that Kalshi made a huge bet that it could successfully achieve U.S. regulated status. And Polymarket conversely, decided that it was okay operating offshore as an unregistered crypto entity entity that people can access if they have a vpn, but they're not technically supposed to. So Kalshi has not necessarily played nice with regulators. It had a pretty significant legal battle early in its career over whether election markets would be allowed on the platform. But it did have success. It won that battle. And now Kalshi is a US regulated prediction market, which it says is is legally available in all 50 states. Although there's currently some commotion over Nevada,

[Ed Zitron]

which, I mean, as a Vegas resident, you can't take our beautiful gambling away from Vegas residents.

[Katherine Long]

Exactly. So as one might suspect, the gambling industry is extremely worried about the rise of prediction markets. Unlike online sports books or in person gambling, Kalshi and other US regulated prediction markets have successfully up till now made the argument that they are federally regulated. That means that states cannot restrict their operations. So state gambling commissions can't say, can't impose conditions on how they operate. They also can't levy taxes on prediction markets. So Kalshi has fairly successfully been playing within this federal regulatory structure. Polymarket has been playing outside of it. And for a while, the two platforms seem to be growing sort of in lockstep. You know, polymarket started out with a

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bit of a lead.

[Katherine Long]

It got a huge amount of traction after the 2024 presidential election, which it successfully called for Donald Trump. Kelshi was a bit of, a bit more. It was a lesser known quantity at the time. It had less name recognition. But Starting around late 2025, Kalshi actually started to eke ahead of Polymarket when it comes to relative share of trading volume on prediction markets. And as of last month, Kalshi was doing insanely more volume than polymarket on Polymarket's Offshore and US app combined.

[Ed Zitron]

Do you know what those volumes might be roughly? Are we talking 10 values?

[Caitlin Ostroff]

I would have to go back and

[Katherine Long]

look at the data. We had lots of consultant chart in our story.

[Caitlin Ostroff]

It was. Was for the month of May, twice the amount of volume. Almost twice, sorry. The amount of volume on Kalshi versus Polymarket.

[Ed Zitron]

That's really worrying. I mean, I think so. Looking this up, it looks like $17 billion in the month of May alone. We live in a godless society. It's a statement I am saying, not the journalist in question. It's very worrying. I find this whole thing quite worrying. Not just the gambling, but the financialization of everything. I don't think it's good to gamble on every outcome personally and I worry about this spreading personally and I don't. It feels like it needs regulation in an extreme way that basically doesn't exist yet.

[Katherine Long]

I mean, I can talk a little bit about my own experiences here. I started covering. Caitlin's been covering this space a lot longer than I have. I sort of jumped into it at the beginning of this year and as part of the process of growing familiar with how prediction markets operate, I decided to watch the State of the Union through the lens of a prediction market live streamer who was live streaming the State of the Union and talking about the bets that he was placing on what President Trump would say during. During that speech. And you know, I think similar to watching live sports on which you've wagered, it was simultaneously more exciting. And I think also slightly concerning the way that instead of sort of listening for the content of the speech, it very rapidly for me turned into something closer to a game of sort of wondering what the next word is, like what, what is he going to say? And will it hit? Like will the bet hit? And so I understand where the concerns that you're describing emanate from. Certainly I would say also that there's a lot of people who point to prediction markets as an extremely legitimate financial tool and one that institutions can increasingly take advantage of.

[Ed Zitron]

I mean, the only people I think they're taking, I Think the only advantage being taken is of the customers. Because I have to wonder how many people win. And it probably isn't very much. And the fact that they have to resort to, the fact they have to resort to this kind of marketing suggests that the wins are not quite as common as they want you to believe.

[Caitlin Ostroff]

Well, and that's a previous story that Katherine and I worked on together. Basically analyzed just that how many people actually win on prediction markets. And what we found was that about 70% of people who had traded on polymarket lost money and losers to winners on Kalshi was about 2.91. And so while a lot of the marketing is centered around these are prediction markets where you can win money, in reality, most people do not win money.

[Ed Zitron]

Kind of feels like the DraftKings stuff as well. The sports scam claim where it's like, oh, yeah, of course it's really easy. And this is not a statement I align with. It's easy, you just bet on what the winning team will be. But the existence of spreads and also the existence of the weird nomenclature that the prediction markets use is how they get you. Like I remember with, I was talking about with Nick devore and Rebecca Ungarino from Barron's and it was just like, yeah, the wording around Kaminay's potential death. And then they just pulled the entire thing, screwed a bunch of people over. And how they design, how they design and they say what a win is seems to also undermine people.

[Caitlin Ostroff]

Right. And we've previously reported that the wording for pretty much all of these prediction markets really matters. And so there's been a lot of people who've reached out to us as journalists and said, I put money on this market, understanding that this is how it was structured. And then the resolution was entirely unexpected or I don't think that it was a proper resolution. And so especially for some of these markets where it's not really a finite outcome or the rules might be written in a way where there's potential for different interpretation, there really is a risk of the market not going how people who are betting understand it might.

[Katherine Long]

Or maybe people can't even see the rules. The rules are difficult to access in the first place. That was the case of somebody we profiled for our last story who wagered everything he had earned so far on prediction market and ended up losing it all and is now living in a homeless shelter.

[Ed Zitron]

Classic gambler stuff as well. I mean, it's even in Vegas. So I live in Vegas and you walk around and even there in like the gambling hub of everywhere. The airport is full of the. Hey, if you've got a gambling problem, call this number. Hey, gambling problems are scary. Gambling problem. Gambling problem next to a slot machine, of course. But it doesn't feel like, probably due to a lack of regulatory oversight, that there's the same alarm concern thought from the people making these markets. Do they seem. Have you heard anything from them about concerns related to gambling addiction or anything like that?

[Katherine Long]

So Kelshi fairly recently did add some language related to gambling addiction on its homepage. It gave people the option to exclude themselves from the website, which is another common feature that many gambling apps have.

[Ed Zitron]

What does it, what does that mean?

[Katherine Long]

Self exclusion is if somebody feels that they have a gambling problem, they can ask to be banned from, from the website, from the gambling app, from the casino. It's sort of, you know, it's not really a nuclear option, but it's a tool that people who are managing a gambling addiction can use if they feel like their, their gambling has gotten out of hand. You know, I think that these platforms, they don't conceive of themselves as gambling. They conceive themselves as trading. This is, you know, in their more akin to day trading or trading in currencies than it is to gambling question.

[Ed Zitron]

So hopefully this is a no, but I know what I had Arif Hassan and Caleb Wilson on talking about sports gambling a few months ago. Apparently DraftKings and the like. So that was last year. DraftKings and the like, they have like an account manager that will actually work with significant bettors. Do you know if such a thing exists with calcium? Polymarket, do they have high rollers that they covet? Is that something I don't even mean Influencers?

[Caitlin Ostroff]

I don't know the answer to this.

[Ed Zitron]

I hope the answer is no.

[Katherine Long]

That's, that's not something that I have heard about. You know, what I can say from our own reporting is that both platforms seem intent on, you know, recruiting college students and Polymarket in particular has set up relationships with college clubs, fraternities offering them, you know, payments in exchange for signing their classmates up to the site. So I would say it's.

[Ed Zitron]

Whoa, whoa, whoa. Tell me more about that. What?

[Katherine Long]

This was a story that I reported with colleagues, including my colleague Kevin Dugan back in. I believe it was March. It was about both platforms efforts to sign up college students and some great reporting that Kevin brought to. The story was about polymarket's efforts to recruit students at Columbia University and they signed this partnership with a fraternity at Columbia and In exchange for every student that members of that fraternity signed up, the fraternity got some money and at the end of it there was a big sort of polymarket funded party. The fraternity got a plaque that said, you know, that they were the first member of the polymarket pledge class. And you know, a lawsuit that was filed last week made similar allegations pertaining to polymarkers activities on other campuses.

[Ed Zitron]

Have you heard about anything else like that with Calshi perhaps? Or is it just. Were those the only events?

[Katherine Long]

Kalshit had some much smaller, much less well funded partnerships with campus groups? I would say polymarket is the prime mover in that space when it comes

[Ed Zitron]

to recruiting college students, getting kids into gambling. That's my statement. This is all truly horrible. Have you. So the one thing as we wrap up here, one thing that I keep coming back to is are there not guidelines around truth in advertising that these cross over with?

[Caitlin Ostroff]

Yeah. So the Federal Trade Commission, which governs advertising, does have rules that require that advertisements be truthful and accurate. And then the CFTC also requires that marketing and that information not be deceptive. So there are laws from at least two federal regulators that do touch on how prediction markets market themselves to the public,

[Ed Zitron]

but they don't appear to. I keep thinking about these videos and I've had the animated GIF just in the corner as I talk to you. And I'm just, I don't see how there's not anything being done about this because even in a very conservative government this is a kind of vice that could genuine, in my opinion, could genuinely cause a form of financial crisis with young people, especially at a time when young people have trouble accumulating wealth.

[Caitlin Ostroff]

Well, I mean, we don't know like entirely what's happening on a regulatory front. Again, we've reported that the CFTC has some sort of investigation ongoing into Polymarket, although we don't know the scope of details of that. And just from myself covering crypto for the last many years, often federal inquiries, when they happen, can take many years. And so I think a lot of these platforms are very new. And so I don't think we necessarily know if and how from a regulatory perspective things might unfold.

[Katherine Long]

I should add here as well that both Polymarket and its primary competitor Kalshi have ties to the White House in the form of involvement from Donald Trump Jr. So Donald Trump Jr. Is a strategic advisor to Kalshi. He is, through an investment fund, an investor in polymarket. We don't have any reporting to suggest that that has played any kind of role in the Regulators willingness or unwillingness to. To take on prediction markets. But I think that that's important to mention here.

[Ed Zitron]

Yeah, I mean, I will say I would buy that they like doing this because it makes things easier for them, but I also think there's just no regulatory enforcement at the moment. There's just like it feels we're just in a regulatory vacuum where the damage is going to come, not so much from what happens, but what doesn't happen. What there isn't an aggressive. Like we don't like the FTC could cut in here at some point. I don't know. It feels that the SEC could do something. But to your point earlier around crypto, it feels that when Gary Gensler left the sec, that was kind of the end of any serious crypto regulation anyway, which would have likely led to regulating this.

[Katherine Long]

Yeah, I mean, we're obviously extremely interested in what, if any, actions regulators will take on this. And we plan to continue reporting and try to find out more about what's going on behind the scenes here.

[Ed Zitron]

Yeah. Well, any closing thoughts? Anything left off from the industry that I haven't gone over? Because this has been wonderful and also truly darkened my heart. Like, I'm gonna need to take a walk around the block.

[Katherine Long]

Oh, Ed, I'm so sorry to hear that.

[Ed Zitron]

No, no, it's not your fault. It's been a very entertaining episode, but just this whole story is so grim.

[Caitlin Ostroff]

It's a feeling I understand. I mean, I think what, what really like, stuck with me through all of this reporting was like, just how good the videos were at purporting to be on Polymarket. And it gave me a bunch of anxiety for family members who are younger and even myself. But more them how hard this is to actually know. Is what you're watching truly something real or is it deceptive in some sort of manner? And so that's been what stuck with me.

[Ed Zitron]

Yeah, it does feel like social media is becoming increasingly fake in that way. Go ahead.

[Katherine Long]

Yeah. I would underscore what Caitlin said. That is also something that has really been resonating with me. And I would just add that if any of your listeners have experiences with prediction markets, we'd love to hear from them. And our contact information is on our Author pages on WSJ.com well, as we

[Ed Zitron]

wrap up then, where can people find you?

[Katherine Long]

Find us in the Wall Street Journal if you're a print head. We still publish in print, but otherwise it's WSJ.com we live and breathe on

[Caitlin Ostroff]

social media right now, so you can give us a follow there too.

[Ed Zitron]

Yeah, where are you at? You on Twitter and bluesky or just Twitter or where can we find you?

[Katherine Long]

I'm on Twitter klong and on Bluesky at. You know, I don't remember my Blue sky username.

[Caitlin Ostroff]

All of my socials are CE Ostroff, so I should be looking like Caitlin has that.

[Katherine Long]

Caitlin has the best nominative determinism initials of all time. Her initials are CEO and she is our boss.

[Caitlin Ostroff]

No, Neil is our boss.

[Ed Zitron]

Big shout out to Neil for finding Poi Market. I am, of course Ed Zhron. I'll be back with a monologue on Friday. You can of course bet on this on goot. Each goot is worth a thousand slubs, so make sure to invest your slubs based on the number of times I said the in this episode. That will of course funnel into a It's an account in the Cayman Islands. I have. It's fully legal. I've checked with many lawyers, several of which haven't been disbarred. This has of course been Better Offline. I am your host at Zitron. Thank you for listening. Thank you for listening to Better Offline. The editor and composer of the Better Better Offline theme song is Matosowski. You can check out more of his music and audio [e-mail] m a t t o s o w s k-I.com you can email me at ezetteroffline.com or visit betteroffline.com to find more podcast links and of course my newsletter. I also really recommend you go to chat wheresyoured at to visit the Discord and go to R betteroffline to check out our Reddit. Thank you so much for listening.

[Katherine Long]

Better Offline is a production of Cool Zone Media. For more from Cool Zone Media, Visit our website coolzone media.com or check us out on the iHeartRadio app, Apple Podcasts or wherever you get your podcasts.

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