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How to Bet on (Literally) Anything
00:34:10
The explosion of prediction markets in the United States, where people bet on everything from Taylor Swift’s wedding date to election outcomes, has radically expanded the universe of gambling. David Yaffe-Bellany, a technology reporter, explains how these platforms became so widespread so fast, and how betting on everything could change the way we live.
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- [00:01]
Pfizer Cancer Screening Announcer
I can't do it today. I already have plans. Something came up. There are a million reasons to put off a cancer screening. But one reason to keep it early detection can save lives. Every screening, every result, every early detection matters. At Pfizer, we're fighting against cancer, aiming for eight cancer breakthroughs by 2030. Join the fight against cancer and get screened at pfizerforall.com Screenings.
- [00:32]
Natalie Kitroeff
From the new York Times, I'm Natalie Kitroweff. This is the Daily. Seemingly overnight, America has seen an explosion of new betting platforms that have radically expanded the universe of gambling. They're called prediction markets. They let you bet on all kinds of things, like will the US Attack Iran? What specific words will the president say? And who will be at Taylor Swift's wedding? Today, my colleague David Yaffe Belloni explains how these platforms became so widespread so fast and how betting on everything could change the way we live. Wednesday, February 4th. David, it's wonderful to have you here in studio.
- [01:39]
David Yaffe-Bellany
Thanks so much for having me.
- [01:40]
Natalie Kitroeff
So we are coming to you because you cover crypto, which can often lead you to the nichest corners of the Internet. I kind of think of you as having a fringe capitalism beat. Is that fair?
- [01:50]
David Yaffe-Bellany
That sounds about right.
- [01:51]
Natalie Kitroeff
Okay. And you've been looking into these prediction markets, which I have a million questions about. But before we get into those questions, I want you to first just lay out for people who don't know these things, what are they? What are these markets?
- [02:06]
David Yaffe-Bellany
At a really high level, a prediction market is a platform where you can bet on pretty much everything. Most people are familiar with sports betting, even the sort of advanced sports betting that we get these days, where you're betting on, like whether a player will make a free throw. Prediction markets expand that idea into all corners of politics and culture. You can bet on whether Trump will win the election. You, you can bet on the date of Taylor Swift's wedding. You can even bet on whether the supreme leader of Iran will make it to the end of the month. So what it's done is sort of expanded that kind of gambling mentality to all sorts of parts of our daily existence.
- [02:44]
Natalie Kitroeff
The idea is betting on everything, everywhere, all at once.
- [02:48]
David Yaffe-Bellany
Exactly. And now you've got people, especially young people, logging onto their phones the same way they might use TikTok or Instagram, and placing bets on elections, on pop culture, really on everything. These platforms have the potential to really change the way that people interact with the world, the way they think about the world. You know, everything now has a price. Everything can be communicated in terms of the odds that it will happen or it won't happen. And I think we're already seeing signs that that's sort of altering reality for people.
- [03:21]
Natalie Kitroeff
Right. And it does feel that this stuff has kind of come out of nowhere. Am I right to think that these markets went from being quite marginal to suddenly being at the forefront of a lot of cultural and political events?
- [03:34]
David Yaffe-Bellany
To some extent, that's right. Go back even two or three years ago, and no one was really talking about prediction markets. But if you zoom out a little further, what's happening now is really the culmination of a trend that started back in 2018.
- [03:48]
Natalie Kitroeff
Hmm.
- [03:49]
David Yaffe-Bellany
A U.S. supreme Court ruling today has opened the door to a dramatic expansion of legal sports betting. That's when the Supreme Court overturned a US Law that had effectively banned most sports betting in the US Once that law was ruled unconstitutional, we saw a sort of avalanche of gambling.
- [04:09]
Natalie Kitroeff
The gaming industry is calling this a groundbreaking decision that will revolutionize the gambling business. Right. This was a huge moment.
- [04:16]
David Yaffe-Bellany
Yeah, it was enormous.
- [04:17]
Natalie Kitroeff
Also, DraftKings announcing that it will enter the legal betting atmosphere throughout states that choose to legalize it.
- [04:24]
David Yaffe-Bellany
So we're still sports gambling companies across the country went state by state getting permission to offer their services, and suddenly people could gamble from their phones. And this was a huge transformation in. I mean, in other countries, there sort of always been this type of gambling, but it wasn't really possible in the US it was something you had to do in a clandestine way.
- [04:42]
Natalie Kitroeff
Right.
- [04:43]
David Yaffe-Bellany
And suddenly it was all happening out in the open, and the marketing was enormous. You couldn't avoid it.
- [04:52]
Natalie Kitroeff
Okay, so that SCOTUS decision mostly affected sports betting. It sounds like. What did it mean then for prediction markets?
- [05:01]
David Yaffe-Bellany
On some level, it's not directly related because legally, this decision didn't have anything to do with prediction market, but it created this cultural moment where suddenly gambling betting was totally accepted in the US it had sort of injected itself into the American consciousness in a way that had never happened before. And it was in that context that a young entrepreneur named Shane Copeland started a company called polymarket, which has become one of the leaders in this area.
- [05:30]
Natalie Kitroeff
Okay, so tell me the story of Copeland founding this company. What's his idea for it?
- [05:35]
David Yaffe-Bellany
In the beginning, Copeland's this young entrepreneur. He spends one semester at NYU before dropping out. And he has this super techie background. He was really interested in cryptocurrencies. He had kind of a nerdy fascination with markets from a pretty young age. And the idea he had for polymarket was actually quite high. Minded. It came in 2020, just a few months into the COVID pandemic.
- [06:01]
Shane Copeland
What really was the tipping point was during coronavirus, there was so many different opinions and so many forecasts that said entirely different things.
- [06:09]
David Yaffe-Bellany
It was a time when a lot of information was swirling around, there was fluctuating case numbers, emerging variants of the virus, and a lot of people felt like it was hard to make sense of the confusing swirl of statistics.
- [06:22]
Shane Copeland
And effectively, when you've got lots of conflicting viewpoints and information and opinions, a market is a way to distill that information into one accurate fact or indicator or signal.
- [06:33]
David Yaffe-Bellany
So in Copland's mind, prediction markets could help clarify this confusion. It's not just a way for people to gamble on everything. To him, polymarket is about creating a new source of information in the world.
- [06:45]
Shane Copeland
We are missionaries for the concepts of market based journalism and helping people make better decisions by leveraging markets.
- [06:54]
David Yaffe-Bellany
And it's all based on an idea that has long been studied in academia, discussed in financial circles, that crowdsourcing information could produce more accurate projections about the future than what any individual expert might come up with. So the idea here is that the source of truth and knowledge that prediction markets are offering could actually become a compliment or even a replacement for things like traditional media.
- [07:20]
Shane Copeland
You have this public good that's like a mecca of real time, unbiased information. Where you go on polymarket, you can just see, oh, this is what the odds of this happening are in the future.
- [07:31]
Natalie Kitroeff
Interesting. It sounds like he's thinking that these could be more accurate sources of information than traditional media, in part because it's crowdsourcing.
- [07:41]
David Yaffe-Bellany
It's crowdsourcing and it's also a financial market. So people have skin in the game.
- [07:45]
Shane Copeland
People can debate each other and be like, oh, you're wrong, this, this, that. But the way that that really dissipates is when you let people put their money where their mouth is.
- [07:53]
David Yaffe-Bellany
And the idea is that when people have money on the line, they tell the truth or they're incentivized to research their opinions as thoroughly as possible. And if you can pull all of that together, then you've got a kind of amazing new source of information.
- [08:09]
Natalie Kitroeff
So Copeland is not just thinking of turning the whole world into some kind of virtual casino here. He's imagining this as a tool for revealing things about the world, for gathering and disseminating information.
- [08:25]
David Yaffe-Bellany
Absolutely.
- [08:31]
Natalie Kitroeff
Okay. At this point, I feel like we need to understand exactly how this market works, how the betting works. Can you walk me through that?
- [08:38]
David Yaffe-Bellany
Yeah. This is a good Question. A lot of people don't fully understand it. Prediction markets are essentially a series of yes or no questions. So if you log onto the polymarket website, you will see questions like will the Iranian regime fall before 2027? And if you want to bet on that, you buy what's known as an event contract.
- [09:01]
Natalie Kitroeff
An event contract.
- [09:02]
David Yaffe-Bellany
Yeah. And that's the yes option or the no option on any of these questions.
- [09:06]
Natalie Kitroeff
Okay.
- [09:07]
David Yaffe-Bellany
And the cost of those contracts of a yes or of a no always fluctuates between $0 and $1. And that price is essentially a reflection of what the market of bettors out there think is going to happen. So if the yes option on the Iranian regime falling is going for 20 cent, then that means there's about a 20% likelihood of the regime falling.
- [09:33]
Natalie Kitroeff
It's relatively cheap to buy that contract because the universe of bettors thinks it's relatively unlikely that this will happen.
- [09:41]
David Yaffe-Bellany
Exactly. And then the payout arrives when the event either definitively happens or doesn't happen. So if the regime does fall and you bought that yes contract at 20 cents and you correctly predicted what would happen, then the contract rises in value to $1 and you your payout. And because this resembles a kind of financial market, it falls under a different type of regulation than traditional sports books. Sports books are regulated by the states. There are state laws governing gambling. And the prediction markets instead are regulated at the federal level by a financial agency called the Commodity Futures Trading Commission, the cftc. And the idea here is that the CFTC should be protecting against abuses in the realm of prediction markets. Insider trading is an easy example of that, or market manipulation, things that could threaten the integrity of a financial market. But Copeland didn't go down that path initially. He didn't register polymarket with the cftc. And that's sort of in line with the kind of move fast and break things ethos of the tech industry.
- [10:53]
Natalie Kitroeff
Right, the ask for forgiveness, not permission style of operating.
- [10:57]
David Yaffe-Bellany
Exactly. And Copeland was taking a similar approach, but ultimately that got him into a lot of trouble. In 2022, the CFTC fined Polymarket $1.4 million. And as part of that legal settlement, Copeland had to agree that Polymarket wouldn't operate in the United States. It's only open to foreign users.
- [11:20]
Natalie Kitroeff
And why does Copeland agree to that? I mean, that sounds like a potential death knell for a company like this.
- [11:27]
David Yaffe-Bellany
Well, the legal landscape in the US was complicated, and so on some level it might have seemed actually less risky to sort of try its luck outside of the US but the Other element to this is that there was a workaround. If someone really wanted to use polymarket from inside the United States, they could download a vpn, a virtual private network, and essentially trick the website into thinking that they were logging on from another country.
- [11:55]
Natalie Kitroeff
Right.
- [11:56]
David Yaffe-Bellany
And this was extremely easy to do. I've spoken to many people who did it. I've spoken to at least one former Polymarket employee who told me that it was sort of an open secret in the office that people were doing this. And it meant that this U.S. ban was largely theoretical.
- [12:13]
Natalie Kitroeff
And at this point, do we know who's actually using this thing?
- [12:17]
David Yaffe-Bellany
At this point, it's still primarily a base of tech savvy people who are really interested in these things in kind of a nerdy way. Got use Polymarket, you had to use cryptocurrencies. So you're already limiting yourself to a pool of people who are comfortable transacting in crypto in your world? In my world, yeah. And if you wanted to use it in the US you had to know how to use a vpn. So it's not as if this was, you know, freely available to anyone who might potentially be interested.
- [12:46]
Natalie Kitroeff
And are people using it in the way that Copeland imagined they would, to kind of create new sources of information to illuminate things that maybe weren't clear before there was the potential to bet on them?
- [13:00]
David Yaffe-Bellany
They are starting to do that. It's gaining popularity, it's growing, it's getting more attention in the media. And it really comes to a head in 2024 as the presidential election is heating up. And it starts that summer after Joe Biden's disastrous debate performance, when there's all kinds of speculation about whether Biden will drop out of the race, and suddenly users of polymarket start betting on that. At the time, many Democratic talking heads, pundits, the Biden administration, and of course, Biden himself were saying he's not going to drop out, but the betting market projected that he would drop out. So when Biden eventually did, it felt like a moment of vindication for Polymarket and a sort of a preview of what it might offer to the world.
- [13:48]
Natalie Kitroeff
Right. Because I can imagine Copeland sees this as proof of concept. Here you can come and get what I presume Copeland views as an objective sense of the odds.
- [13:59]
David Yaffe-Bellany
Right. And of course, it's not like this was some question nobody was considering or that there wasn't punditry about it or people predicting that it would happen. But polymarket was a place where all of that was sort of consolidated into one Number. And you could kind of get a sense of the way the wind was blowing. And that moment. That question of whether Biden will drop out then sets polymarket up for the next big question of the 2024 race, which, of course is, who's gon win the election? Will it be Harris or will it be Trump? And it feels like a really long time ago now, but a tide race, dead heat among likely voters. 47% Harris, 47% Trump. It obviously doesn't get closer to that. Back then, it was a close race. The polls showed that the two candidates were essentially neck and neck. But the projections on polymarket started to shift heavily in Trump's favor. And obviously, Trump did win.
- [14:56]
Shane Copeland
Big night for prediction markets and calling.
- [14:59]
David Yaffe-Bellany
President Trump Elect as the winner at the polls. And it was another moment of vindication for Copeland's sight.
- [15:07]
Natalie Kitroeff
Another example for him at least, of it being a more reliable predictor than traditional media sources.
- [15:12]
David Yaffe-Bellany
Traditional polls. Exactly.
- [15:15]
Shane Copeland
As the saying of free markets goes, a diverse group of market participants like you see on polymarket is more accurate than any given expert.
- [15:24]
David Yaffe-Bellany
And what was especially fascinating about this example is that we got kind of a peek under the hood at how these projections came about. Now, remember that these projections are the result of a financial market, and a few large trades can shift a financial market significantly. And in this case, a wealthy trader in France came forward and said that he had made $30 million in bets that Trump would win the election, and that this was based on his own careful research. He'd actually commissioned his own poll.
- [15:56]
Natalie Kitroeff
Wow.
- [15:57]
David Yaffe-Bellany
Because he thought the traditional US Polling was misleading. And that just out of that conviction, he put all of this money on Trump, which effectively shifted the polymarket odds in Trump's favor. And it was a profitable play. This guy made more than $85 million in profits. When Trump won the election, people started calling him the French Whale.
- [16:19]
Natalie Kitroeff
Okay, so obviously a huge payout for this one guy. What do you make of this moment? For the markets themselves, it had a huge impact.
- [16:30]
David Yaffe-Bellany
Suddenly, these markets that had sort of operated on the margins of the financial system, getting some notice, but not a ton. Suddenly everyone stands up and says, wow, huge amounts of money are changing hands on these things. We really have to take them seriously. And, of course, Copeland is taking a victory lap. But soon we learn that this entire time, as the company has been blowing up, becoming a big, mainstream phenomenon, they've been under a federal criminal investigation. Whoa. In fact, shortly after the election, the FBI raids Copeland's home in New York City. They take his phone and it's all part of an investigation into whether Polymarket is illegally allowing US Users to access the platform. So at the same time, you've got this moment of public vindication, you also have this really fraught legal moment where it's not clear whether the platform can survive in the United States. But there's a light at the end of the tunnel for Copeland, which is that soon Trump is going to take office. And as soon as he's in power, everything changes.
- [17:45]
Natalie Kitroeff
We'll be right back.
- [17:49]
Pfizer Cancer Screening Announcer
I can't do it today. I already have plans. Something came up. There are a million reasons to put off a cancer screening, but one reason to keep it early detection can save lives. Every screening, every result, every early detection matters. At Pfizer, we're fighting against cancer, aiming for eight cancer breakthroughs by 20. Join the fight against cancer and get screened at pfizerforall.com screenings.
- [18:18]
Deborah Kamen
I'm Deborah Kamen. I'm an investigative reporter at the New York Times. This one time, I was working on a particularly difficult investigation of the bad behavior in the real estate industry. I was in a meeting with my editor, and she said, deborah, why is your face so white? And I just told her the truth. I said, you know, this story is really hard. And she looked at me and said, that's what we do. I think about that all the time at the New York Times. I have never encountered someone who said to me, that's too ambitious or that story is too hard. It's the contrary. I am told. You need to dig deeper, you need to keep going until we make sure we have every single fact, every single layer to tell. The stories that would not be told because they are hard. And that's what's special about the New York Times. It allows our readers to understand not just what's happening, but why it's happening. If you're a subscriber, you probably have experienced that sense of understanding. And thank you for supporting this work. If you're not, you can subscribe@nytimes.com subscribe.
- [19:21]
Natalie Kitroeff
Okay, so tell me, what exactly changes for these markets when Trump comes to office?
- [19:26]
David Yaffe-Bellany
Since Trump's taken over, there's been a complete change in attitude toward these platforms. Copeland, whose house had only just been raided by the FBI, was invited to a summit for tech executives at the White house. Donald Trump Jr. Became a formal advisor to Polymarket. And most importantly, the Justice Department under Trump officially dropped this investigation into Copeland.
- [19:51]
Natalie Kitroeff
Hmm.
- [19:52]
David Yaffe-Bellany
And this is all happening in the context of a legal battle involving one of Polymarket's competitors. A company called Kelshi that also offers its own prediction market, which around the time of the election had won a big legal dispute with the cftc.
- [20:09]
Natalie Kitroeff
So suddenly all these legal troubles that had been hovering over the company and the markets in general, they kind of seem to disappear.
- [20:17]
David Yaffe-Bellany
Yeah, they vanish. So you've got this culmination of a bunch of things, a kind of pro business attitude brought by the Trump administration, this legal victory secured by Kalshee. And so while it didn't happen overnight, what that meant is that US based users were now allowed to use these platforms without a vpn. They become easily available to almost anyone.
- [20:44]
Natalie Kitroeff
I just found out about Polymarket.
- [20:47]
David Yaffe-Bellany
I started with $10 and I'm up like 100 something dollars. And that feeds into this larger cultural shift. I'm a full time Polymarket trader and a lot of people don't understand how you can make a full time living on Polymarket. But let me explain. People are using these platforms more and more. They're more available in the United States. The NHL just became the first major US Pro league to strike licensing deals with prediction market platforms. Kalshi and Polymarket. Polymarket can become the official prediction market partner for the ufc. Kalshi just announced a new partnership this week with Coinbase. With every passing week comes some new major partnership that brings them more and more into the mainstream. Dow Jones is teaming up with Polymarket. This is an exclusive partnership and it'll make Polymarket's real time prediction data available across Dow Jones platforms, including the Wall Street Journal. Big media organizations like cnn, cnbc, the Wall Street Journal have formal partnerships with Kalshi and Polymarket to use data from the sites in their news reports. Wow.
- [21:55]
Natalie Kitroeff
Good evening and welcome to the 83rd Golden Globes.
- [21:59]
David Yaffe-Bellany
The Golden Globes featured Polymarket odds on the live broadcast. Here are the nominees for best podcast. Roll the tape. Right before the best podcast award was announced, Poly market odds were projected on the screen.
- [22:13]
Natalie Kitroeff
Hmm.
- [22:15]
David Yaffe-Bellany
And so it's been this huge kind of cultural awakening toward these things.
- [22:21]
Natalie Kitroeff
It is kind of wild, David, to just consider the trajectory that you've laid out for us here. A year ago about these markets were operating as a kind of niche, illegal backwater on the Internet where you had to pay in crypto and have a VPN to use them. And now they're like fully in the mainstream.
- [22:39]
David Yaffe-Bellany
Yeah, the scale is enormous. There was about $12 billion in trading volume on Polymarket and Kelshi in December. That's a 400% increase from the year before. Well, and look, granted that's still a smaller user base than bets on traditional sports books, but the level of growth is pretty impressive. So one recent example that got a lot of attention is a betting market on polymarket about whether the president of Venezuela, Nicolas Maduro, would be removed from power.
- [23:14]
Natalie Kitroeff
Right. I saw that.
- [23:15]
David Yaffe-Bellany
And some of the betting on that Maduro question actually raised new concerns about how these platforms operate. Shortly before the US operation in Venezuela to remove Maduro, an anonymous better on polymarket placed a large bet that Maduro would be removed from power. And then, of course, he was. And that trader made a big profit. But the timing of that bet was so good that it convinced a lot of people that this traitor must have had some sort of advanced knowledge about the operation, that this must have been some kind of insider trading based on a government leak or somebody in government improperly using the site.
- [23:55]
Natalie Kitroeff
Right. I remember when that happened because I was following the Maduro news very closely. People saw that bet and just did assume that this person who made it was potentially close to the White House and knew in advance it was gonna happen.
- [24:10]
David Yaffe-Bellany
Yeah. To be clear, there was no evidence of. It was never proven. But I think what we're seeing here is something that we've already seen in the realm of sports, which is when betting becomes super mainstream, there's an aura of suspicion that develops around everything. People become convinced that things are rigged, that somebody's cheating to try to make money. And now we're seeing that aura extend to all sorts of other things in the real world outside of sports. And that's even bled into how the newsmakers themselves are operating. There was an incident last fall where Brian Armstrong, the chief executive of Coinbase, which is the largest crypto company in the US Was doing an earnings call. And at the same time, there was a betting market on both Kelshi and polymarket. On what words he would utter during that earnings call.
- [24:55]
Natalie Kitroeff
Can I just pause and say how amazing it is that there were bets being made on what words he would use in an earnings call?
- [25:01]
David Yaffe-Bellany
Maybe someday there'll be bets on what you'll say on the daily. I mean, who knows? It's all sort of fair game.
- [25:07]
Natalie Kitroeff
No, thank you.
- [25:08]
David Yaffe-Bellany
Anyway, at the end of this earnings call. Yeah, I hope we answer your question on that. I was a little distracted because I was tracking the prediction market about what Coinbase will say on their next earnings call.
- [25:19]
Shane Copeland
And I just want to.
- [25:20]
David Yaffe-Bellany
Armstrong says, oh, I've actually been looking at the prediction markets, and I just want to add here the words Bitcoin, Ethereum, blockchain, staking and web3 to make sure we get those in before the end of the call. Then he just reels off a list of the words that people were betting on. Wow, you know, influencing the market directly. Now Armstrong has said that he personally wasn't betting on this market. He didn't have a stake in what he was going to say. But it's an illustration of how easily these markets could be manipulated.
- [25:52]
Natalie Kitroeff
Right. The CEO says this didn't benefit him. But it's pretty easy to imagine a situation in which someone does actually have a stake in an outcome that they can influence and colludes with people to make a lot of money manipulating it.
- [26:07]
David Yaffe-Bellany
Yeah, it could happen.
- [26:08]
Natalie Kitroeff
And we've obviously seen that in sports betting, players colluding with bettors to change the outcome of games or of things that happen within the games. In sports betting cases, those lead often to criminal charges. But in this case, is this kind of cheating actually punished?
- [26:28]
David Yaffe-Bellany
So the CFTC does have a rule against insider trading, but this is such a new area that it hasn't really been tested. So it remains kind of a big question mark. Kalshi, which is Polymarket's biggest competitor, has taken the position that insider trading is bad and that there are protections in place on the platform to prevent it and to report it. But there are other people in the kind of prediction market sphere who actually think insider trading is a good thing. And that goes back to that kind of high minded goal behind some of these products, that they could become a source of truth in the world.
- [27:03]
Natalie Kitroeff
Wait, tell me how cheating is part of the high mindedness?
- [27:07]
David Yaffe-Bellany
Sure, if what you want to do is produce the best possible projection about what will happen to Nicolas Maduro, then if someone who has insider information about that is placing bets and moving the market, you end up with a much better projection.
- [27:20]
Natalie Kitroeff
Hmm. But isn't there a case, David, for these companies that operate these markets to be worried about the business implications of cheating? Like wouldn't a Shane Copeland, for example, be concerned that people wouldn't want to participate in Poly Market if they know that they may be taking a sucker's bet on some of these big events where the person on the other side actually has good information and they're just making a guess?
- [27:46]
David Yaffe-Bellany
Yeah, absolutely. And these companies have taken a big reputational hit from some of these incidents over the past few months. But look, I've covered these sorts of strange financial instruments for a long time and it's pretty amazing what people will throw their money into. You know, I've seen people People buy useless meme coins that are clearly part of a pump and dump scheme, but they do it anyway. People aren't always rational with their money.
- [28:11]
Natalie Kitroeff
Right.
- [28:12]
David Yaffe-Bellany
You know, you're always convinced that you're the one person who has the inside scoop and can figure out how to make money from something that everybody else is losing money on.
- [28:22]
Natalie Kitroeff
Right. You're not the sucker.
- [28:23]
David Yaffe-Bellany
Exactly.
- [28:24]
Natalie Kitroeff
David, you made it clear that these platforms have persuaded regulators that what they're doing is not facilitating gambling. They obviously call themselves prediction markets, not betting apps. But the reality is, the way they work, as you've described it, is much more like gambling than the stock market. Right. These are quick fix kind of bets.
- [28:49]
David Yaffe-Bellany
Look, as I've started reporting on these platforms, I've also started using them with a small amount of the New York Times money.
- [28:56]
Natalie Kitroeff
Oh, wow. How much?
- [28:57]
David Yaffe-Bellany
$20.
- [28:58]
Natalie Kitroeff
Oh, wow. Generous.
- [28:59]
David Yaffe-Bellany
And any profits would go to char. So it was a real philanthropic opportunity for me.
- [29:05]
Natalie Kitroeff
How'd you do?
- [29:06]
David Yaffe-Bellany
I've already blown it. I'm down to $10.
- [29:08]
Natalie Kitroeff
Okay. You're no French whale.
- [29:10]
David Yaffe-Bellany
Exactly. But one thing I learned from playing around with these platforms a little bit is that it does feel like gambling. You know, these platforms are designed to kind of suck you in. You know, they've got bright colors and, you know, you see numbers going up and down and it's exciting. And when you're just playing around with a few dollars of your company's money, that's totally fine. But. But when you're potentially vulnerable to addiction and you're spending money that you need for other things on these platforms, there's a real risk. And one thing we know about this type of betting is that it's especially popular among young people, especially young men. It's kind of their vice of choice these days. And so whatever the long term consequences of this are, it's probably going to be felt by that demographic, young people.
- [29:58]
Natalie Kitroeff
Right. If you have a gambling addiction, like you said, there's all these reasons why you're compelled to keep betting. And if you're just someone who finds them fun, you're looking for entertainment. You're looking for this kind of world that's been created by these markets, which, as you've described it to me, kind of turns reality into something like a video game.
- [30:22]
David Yaffe-Bellany
Yeah. And the consequences of that are starting to become clear. It's changing the stakes of reality for people, changing the way they relate to things that are happening in the world, even things that are really important and have human consequences. I mean, we have seen prediction markets, betting on the LA wildfires, on how quickly they would be contained, There was betting on the war in Gaza, whether that situation would be classified as a famine. And all those things are devastating for the real people in those situations. But now you have a class of Internet speculator who's engaging with them as potentially profit making opportunities.
- [31:03]
Natalie Kitroeff
Yeah, I have to say it's pretty dark to imagine people putting money behind the notion, for example, that Gaza would be declared a famine or that the fires in LA wouldn't be put out and then potentially having a rooting interest in that outcome. Like just to put a fine point on it, it means presumably you have people hoping that these terrible things will happen because they'll make money on it.
- [31:29]
David Yaffe-Bellany
A lot of people have that reaction and it's totally a real concern. I'll just turn it around and try to kind of capture what the companies would say to this specifically on that example of the LA wildfire. People have a real interest in knowing when the fire should be contained. They're making decisions that affect their lives based on that. And so if you have a crowd sourced verdict on that question, that could potentially be really helpful. So on some of these markets you can still make a version of that high minded argument that Copeland came into this industry with, but on some of the others it's definitely a lot tougher to justify.
- [32:08]
Natalie Kitroeff
And I guess then even if you buy the premise that there's utility in these bets, I think it's worth asking what the cost of that is like what it does to us as a society to suddenly be relating to the real world and sometimes to real world suffering in this kind of gamified way.
- [32:34]
David Yaffe-Bellany
Yeah, it has a sort of distancing effect. Suddenly these things become kind of abstract. The same way the price of a stock is sort of abstract to people.
- [32:45]
Natalie Kitroeff
Right.
- [32:45]
David Yaffe-Bellany
And what the long term consequences of that will be. Maybe it's hard to say, but it's clear that this is a future that these companies want. One of the co founders of Kalshi says that he wants to financialize everything, to turn every difference in opinion into a tradable asset. It's the idea that any event in the real world could be communicated in financial terms as odds of this happening, odds of that happening, even if it's something as simple as the weather. And to their founders that's really exciting. But to a lot of other people, a world in which everything is reduced to dollars and cents is sort of depressing. To a lot of people it sounds like dystopia. What's clear is that we're at the beginning of this. The legal landscape is still taking shape. There are some challenges to prediction markets happening in the States right now. Still, as someone who' covered this sort of fringe financial stuff for a long time, I can feel momentum behind these markets. There's a real appetite for them culturally and I don't see that changing. People want to bet on everything.
- [34:03]
Natalie Kitroeff
Well, David, thanks for coming on the show.
- [34:06]
David Yaffe-Bellany
Thanks so much for having me.
- [34:12]
Natalie Kitroeff
We'll be right back.
- [34:16]
Pfizer Cancer Screening Announcer
I can't do it today. I already have plans. Something came up. There are a million reasons to put off a cancer screening, but one reason to keep it early detection can save lives. Every screening, every result, every early detection matters. At Pfizer, we're fighting against cancer, aiming for eight cancer breakthroughs by 2030. Join the fight against cancer and get screened at pfizerforall.com screenings.
- [34:46]
David Yaffe-Bellany
We are living in interesting times, a turning point in history. Are we entering a dark authoritarian era or are we on the brink of a technological golden age or the apocalypse? No one really knows, but I'm trying to find out from New York Times opinion. I'm Ross Douthat and on my show Interesting Times, I'm exploring this strange new world order with the thinkers and leaders giving it shape. Follow it wherever you get your podcasts.
- [35:18]
Natalie Kitroeff
Here's what else you need to know. Today, President Trump signed a bill that ended the partial government shutdown on Tuesday, hours after it passed the House. The legislation funds much of the government for the rest of the year, except for the Department of Homeland Security, which was only funded until the end of next week. Democrats are insisting on new restrictions for federal immigration agents before extending that funding. And Trump now has 10 days to strike a deal with them before it expires. And House Republicans canceled a vote to hold Bill and Hillary Clinton in criminal contempt of Congress. The move came after the Clintons agreed to testify on camera in the Jeffrey Epstein investigation and requested to be deposed at public hearings. The agreement marked an end to a months long standoff between Republicans and the Clintons, who had resisted testifying and accused the GOP of carrying out a political vendetta against them. I think it's a shame, to be honest.
- [36:22]
David Yaffe-Bellany
I always liked him.
- [36:24]
Natalie Kitroeff
When asked about the developments, Trump expressed empathy for the Clintons.
- [36:28]
David Yaffe-Bellany
I hate to see it.
- [36:29]
Natalie Kitroeff
In many ways, I hate to see it. They will appear on February 26th and 27th for depositions. Today's episode was produced by Ricky Novetsky, Nina Feldman, Claire Tenisketter and Rachelle Banja. It was edited by Chris Haxel and Devin Taylor. Contains music by Rowan Nimisto and Elisheba ET and was engineered by Chris Wood. That's it for the Daily. I'm Natalie Kytroeff. See you tomorrow.
- [37:13]
Pfizer Cancer Screening Announcer
I can't do it today. I already have plans. Something came up. There are a million reasons to put off a cancer screening. But one reason to keep it early detection can save lives. Every screening, every result, every early detection matters. At Pfizer, we're fighting against cancer, aiming for eight cancer breakthroughs by 2030. Join the fight against cancer and get screened at pfizerforall.com screenings.