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- [00:00]
Chad Moman
This is an iHeart podcast. Welcome to the Favorites, the podcast part of the Volume Podcast Network. I am Chad Moman of the Action Network. We are doing part two of the show that we started on Tuesday. Let's welcome in my co host, my companion, my compadre, my bff, Professional Better Simon Hunter. Hello, Simon.
- [00:32]
Simon Hunter
Chad, I heard the dumbest dad joke when I was in England I forgot to tell you about on the last show. As soon as I heard, I go, chad would love this dad joke. So my younger cousin there, young lad, just had his birthday and my uncle goes up to me goes, charlie, how old are you now? And he goes, nine. He goes, oh, I didn't know you spoke German. I was like, damn, Chad's gonna love that. So yeah, everyone out there, you can use that one time. If you got, you know, a kid that's turning nine, you can use that one time for life.
- [01:03]
Chad Moman
Dude, I'm so old, I don't even have nieces and nephews turning nine anymore. All I have are irascible teenagers who like to throw everything I've ever said in my life back in my face. That's, that's the entirety of my existence. It's kind of like working with Matt Mitchell and Gifford on this podcast. Simon. I want to bring in Chris Gerlacher, who's with Prediction News and has been covering prediction markets for a very long time. And because we talked a little bit about this in part one on Tuesday, because there's been such a confluence of circumstances that have been impacting the sports betting and the gambling universe in the last 10 days. And to me, the growth of these prediction markets and the influence and impact of these prediction markets is one of the biggest things out there. And I mentioned, you know, I've been working on this book and, and I've done a lot of reporting around these and spoken to a lot of the principals and the players at Kalshi at Sportrade, and they're really becoming increasingly important players in the space. As I mentioned the other day, Kalshi raised 185 million. It's now worth $2 billion. Polymarket raised, it's now worth a billion dollars. My conspiracy theory that I talked about a little bit on Tuesday, nobody is benefiting more from the new tax regulations in the big beautiful bill in which professional betters are now only allowed to deduct 90% of their losses, not 100% of their losses. Nobody benefits more, in my opinion, than prediction markets because those are regulated and taxed in entirely different ways. I am excited to get Chris Gerlacher on the show because he can help us break all this down. Chris, welcome to the favorites.
- [03:08]
Chris Gerlacher
Hey, Chad, thanks for having me. This is cool.
- [03:10]
Chad Moman
Well, I can sense your enthusiasm. So before we get to that, Simon, Matt Mitchell was rushing us off the other day.
- [03:19]
Simon Hunter
Yeah, Gave us a yank off the curtain.
- [03:21]
Chad Moman
He like, was so. It was so annoying because I felt like you were digging in on a couple things. And Chris just indulges for a second because the big beautiful bill in which gamblers are now only allowed to deduct 90% of their losses versus 100% of their losses. So all of a sudden, if they could be paying taxes on money, they did not win. Simon, you mentioned you're trying to figure out what to do because you think it will kill how professional betters live in this country. It may not kill how they live, but it may change how they, how transparent they are with their taxes. Or they got to leave the country and decide to do it from somewhere else. Unpack that a little bit more. Some of the conversations you've been having having with either accountants, with lawyers, with other people in the space, like, explain the impact here because I don't think people get it. And by the way, it doesn't just impact professional betters like DraftKings, FanDuel. They will send you sort of basically sheets, forms at the end of the year in which you are responsible for documenting what your potentially taxable income was as a better. So this is for everybody?
- [04:36]
Simon Hunter
Yeah, no, it's just, it's bad for everybody. That's why the guy. I, I hope you're right that it's, it doesn't go through and that something does change because luckily we get the rest of this season upcoming. Like, it doesn't go into effect, I believe, until 2026, which is a big deal. So whatever I win this year, legally, I can still report my wins and losses. But yeah, Chad, we're talking about. People like me are just constantly looking for an edge. And that doesn't come just with sports betting. That's just about everything I do in life. It's a microcosm of everything in life. I'm always looking for an edge. So I told you my favorite contest that we do pick contests, we do legal ones. My favorite pick contests are tax free ones. Those are ones that are off the books. So people are going to go back to what they never even left, which is mainly offshore books or your local book, which we know is got a hint of crime underneath the belly of it. So it's like guys are going to go back to that they want to stay in the States. I like being above board. I like what we have now with legalization. And it's a hard life having everything be cash. So getting things to now what it is, which is I pay tax on everything. I like it. And you know, I knew, not that I knew this was coming, but we had heard whispers and you know, again we can dive into the New Jersey part of this because New Jersey's stuff is insane. It's literally I feel like a bill written just to go after someone like me. I am a narcissist in many ways, but that one just is insane to me. Attacking runners. But it really is at the point, Chad, where I'm going to be forced possibly to leave the country for six months out of the year. Right? England is no taxes. I can win big money and pay no taxes on the winning. Same with my losses in England. It's very different their taxes towards gambling than it is here in America. So that off the get go is a big deal and many professional betters are going to look into that. Now getting three months to a six month visa to England, that's a whole story inside itself. Chad knows my mom's from England. I can have dual citizenship. It's no problem. Know that's something that happens basically when you're a wee young lad. So to me it's, it's not gonna be a hard transition to a lot of guys like I was just meeting with in Vegas. I don't think they've ever even left the country, let alone go to England. So they're, they're the ones that to me will go back to the dark books. And again there's ways around it. It's just the normal better having to pay, having to already try to make a winning betting and then they're having to pay 10% on their losses. I just can't believe it. I can't believe it. I really can't. I know how stupid a lot of the stuff in our government is, but this one is, it's up there and what we're about to dive into, you know, the poly markets, something that's going to help counteract this in many ways. So I'm, I'm here, I'm excited to learn more about it from Chris here because you know, to me, to me a lot of other people, Chad, it was something that really blew up when it came to politics and it's obviously going to try to take advantage of what's about to happen right now with these sportsbooks. So, yeah, very unique, interesting time we're living in for sure, with the sports betting markets.
- [07:57]
Chad Moman
Chris, thanks for letting us sort of finish up that conversation. But Simon brings up the politics, he brings up Polymarket it for anyone listening who, because we haven't talked a lot about Kalshee, we haven't talked a lot about Sportrade, we haven't talked a lot about Polymarket on this show. Give people a primer. You are an expert in this. You write for Prediction News, you've been covering this for a long time at a professional level. Give people a primer on what's happening in this space.
- [08:25]
Chris Gerlacher
Sure. So for those who don't know, prediction markets are. They're an exchange where you can buy and sell contracts on whether an event will happen. And every contract is priced between $0.01 and $0.99 and the price ends up being how likely that event is to happen. And the more valuable your contract is, the more likely it is to pay out. Winning contracts pay out a dollar each and losing contracts get nothing. So it's this really cool, interesting way to aggregate a lot of information and kind of get a snapshot of a forecast. If you're in it for the forecasting, but if you're in it for the gambling too, it's constantly live. So it's this really strong and unmatched live betting experience as well that makes it really good for recreational betting. So if you look at sport trade, you know, they've been offering sports contracts since 2022. They've just been doing it under state gambling law. So they've got their licenses in five states now and they're safely considered a gambling company. Now. When Kalshee first launched, they were not offering sports or elections or bleeding over into these, any, any of these other subjects. They were all about, you know, economics, finance, some pop culture. But, you know, sports was a red line for a while and elections was a hard line. But they'd been trying since at least 2021 or 2022 to offer, you know, first it was election or betting on the midterms. And then they finally won their lawsuit in October, well, September 2024, and were able to finally launch in October. So, you know, there, there's just been a lot of explosive growth and publicity surrounding prediction markets during the 2024 election because that' first high volume, commercial, really big regulated prediction market. I mean, yes, Poly Market is huge, but it's in the crypto space. And it's not that it's not popular. It's not that it doesn't have a ton of volume, it's just that if you're a regular guy, you can either go learn web3 and go learn how to play with crypto and figure out the wallets, or you can just go to Kalshi, throw down a debit card and start betting.
- [10:32]
Chad Moman
Right. Kalshi is legal in the United States. Poly Market is not. Kalshi is regulated by the cftc, the Commodities Futures Trading Commission. Polymarket is not. Sportrade, like you mentioned, has decided to go through the state licensing process. To me, this is what's so fascinating. Alex Kane, who started Sportrade, wonderful guy, thoughtful, energetic, enthusiastic, really earnest, years ago, was a visionary and had this idea to start a prediction exchange, essentially a betting exchange based on sports. And he went the route of getting regulated state by state as a sports betting operator. Kalshee started by a couple of people who got to know each other at MIT and then became options traders as interns and places like Citadel. And then they were like, wait a second, people are betting on these particular commodities based on who they think is going to win this election. Can we just offer markets on the elections and things like will the Fed raise interest rates? And they graduated from mit, started this business and they decided to get licensed by the cftc, which they are. Since January, they have been offering markets on sports. And Chris, this is where it's gotten really interesting because Kalshee is offering, you know, bets, markets, contracts on the super bowl. Then they're offering markets on March Madness. Now the majority of the trading volume on Kalshi. And I would recommend in Addiction, what Chris does with prediction Mo News, everyone should read Dustin Gauker. He's got a great substack called Event Horizon about this stuff. He did an email today that showed the volume traded on kelsey, something like 80% of it is sports. And so they're basically operating as a entity offering the ability for people to predict the sports markets. I'm not going to use the phrase betting at a national scale. And they've bypassed the regulatory markets in the states. How is that even possible?
- [13:06]
Chris Gerlacher
Sure. Well, this is one of the interesting things that's really come to life and how she spied first over elections, but especially over sports. The finance industry is very comfortable with kind of these parallel regulations, these parallel regulatory structures. So, like, if you want to trade gold, and this is something a former CFTC lawyer told me a while ago, but if you want to trade gold, you can trade it as a commodity. That's a transaction overseen by the cftc or you can trade in a gold EFT in an exchange traded fund. Well, that's a transaction overseen by the sec, different regulatory agency. It's the same thing trading gold either way. And nobody really planned out these two different ways to make an identical trade, but it happened. And people who like markets are very excited about having the different options to be able to make their same trade in a different way. And that contrasts almost completely with the gambling industry where everything for good reason has to be under kind of one regulatory umbrella. I mean no one has ever described sweepstakes casinos or like gray market slot machines and gas stations as you know, great liquidity providers or you know, great for pricing or anything like that. So you know, I think that's one of the, one of the reasons that these two industries are really talking past each other in court is just they're, they're looking at this completely differently.
- [14:29]
Chad Moman
Right. So since Kalshi has offered these markets, they've gotten cease and desists from I think seven states telling them to stop. New Jersey, Maryland, a bunch of others. They keep losing because they have this imprimatur of being a legal entity, a legitimate entity for offering these markets from the CFTC. And what's interesting is Kalshee includes Donald Trump Jr. As an advisor and the incoming chairman of the CFTC is a former board member of Kalshee who in his, his hearings to be confirmed said I'm fine with sports markets being part of commodities exchanges. So you know, that's not going to change. That's just going to continue to be the way it is.
- [15:29]
Chris Gerlacher
It's, if change happens, it's going to come from the courts. It's not going to come from Brian Quinten and the cftc. The district court in Maryland right now is one of the interesting ones to watch because Nevada in New Jersey granted Kosi's preliminary injunction. They said you're probably going to win on the merits. You know, the federal preemption probably applies here to, you know, state gambling regs. But the Maryland judge, they, he asked for a lot of supplemental briefs. He said, you know, let's get some of these issues on the table and really flesh them out. And you know, one of the big briefs that came in a couple weeks ago was from the Indian Gaming Commission. And you know that that was probably one of the first times that, you know, one of the federal laws that Kalashi sports contracts could, you know, cross was, that was the first time that argument was really built out really well. So the Indian Gaming Regulatory act that, you know, forms the foundation of Indian gaming. That's a federal law. That's not a state law. And so while, you know, like, I think briefs in New Jersey and Nevada, like, listed the Wire act and Paspa and Igra kind of alongside each other saying, hey, this could be an issue. The tribal brief was really the first one where you see the argument spelled out in detail. And so that by itself is really interesting. And Judge Abelson choosing to, you know, allow the tribes to file their amicus brief in Maryland is also interesting because Koshy originally didn't want that. They were calling it, you know, unhelpful and too late, which makes me think the tribal brief is stronger. So, no, I mean, there's a potential turning point there. I mean, you know, in the game of rock, paper, scissors, a federal court beats a federal regulator. So if either the district court in Maryland or the 3rd Circuit in New Jersey, you know, rule that these contracts, you know, bleed into gaming, then, you know, you'll probably see a Supreme Court fight in an escalation. But, you know, Maryland really is one of the big turning points for sports, sports contracts in general. So we still don't know how safe a haven Kalshi is going to be for sports bettors until those two cases in particular progress a little bit further.
- [17:36]
Chad Moman
Simon, by the way, I mentioned before Dustin Galler's Event Horizon. He had an email today that said it was 70% of all volume at Kalshee was from sports, led by tennis, baseball, and, by the way, the hot dog contest. The hot dog eating contest. Simon, you're, like, in the middle of this. And do you see prediction markets as a viable alternative if you are a professional better who gets limited at every operator, who's now going to be taxed at a more disadvantageous rate. Do you look at these as something that you'd want to dive into?
- [18:27]
Simon Hunter
Yeah, I've dove into it, but like we talked about, I've only dove into it for unique situations like politics or the Pope and things like that. So to me, this is something else that, you know, it's. They're welcoming. That's the biggest difference. Right? They don't reject bets here. They will take your money because they want people to be in it. This is early days, Chad. Like the parallel between this and when fantasy football was letting us do those private tournaments for cash, and that sped us up on this whole crazy whirlwind of what this became of sports betting being legalized in this country. This feels like another kind of moment we're living in here where I'd love to have your view on this, Chris, is, is this going to be here in five years? Is this going to be here in 10 years, or is this just a flash in the pan? Are we just living in this quick moment where they're kind of figuring out these little loopholes? But like you just said, eventually a court will come on, come down on them with a hammer, and then they're just going to be gone. Like they just popped up for a year or two and now they're gone. Like, what's your view on this going forward?
- [19:24]
Chris Gerlacher
I think election contracts have some, I think they can last. I think they have the ability to last. Sports is going to be a little bit more up in the air until these court cases are finally settled. If you take a step back and look at the problem that, you know, Kalshee solves for the finance industry, you know, Chad, you were talking about it earlier, but, you know, if you're an institutional trader and you want to know, you know, what, how like, the Trump presidency in 2016 is going to affect you compared to, you know, a Clinton presidency, how's that going to affect your portfolio? You know, you have to guess how, like the s and P500 is going to react. And, you know, you can just flat out get it wrong. A lot of people, you know, shorted the s and P500 in 2016 and they ended up losing money because the S and P went up when Trump was elected. So, you know, now you can just hedge directly on that event. And that possibility is open to ordinary people, too, although how many people are actually using it to hedge at the retail level is an open question. It's always going to be a minority of traders. But, you know, this is the regulatory trade off. And you can, this is like Hamilton Jefferson old, you know, how much speculation, you know, do you allow for the benefits of hedging for the small group of people? And it was really obvious when, you know, we were Talking like early 1900s and trying to protect farmers who were starving and getting gouged by the railroads, you know, they needed some price stability and they needed some assurance of some steady and reliable income at a price that they could predict. But, you know, now you can do it on any event and, you know, we're going to have to redecide how those, how we're going to balance those interests.
- [21:01]
Chad Moman
Chris handicapped this in another way, for lack of a better term. You see a cauchy, you see a poly market, you see a sport trade. Do you Feel like these can become something that have widespread appeal because right now it feels like the volume comes largely from market makers who are interested in playing in this space, experimenting in this space. Can they find, as you just mentioned, sort of retail success.
- [21:35]
Chris Gerlacher
Calshan's portrait? I think they can. The dream about sports is, you know, they're very numerous and high volume and, you know, ordinary people. If you go to like sbc, you know, every couple years there's a new panel on, you know, being the second screen during the game and that, you know, second screen engagement. Well, a prediction market is your second screen for anything you're mad about. You know, is there a story that pops up on social media that, you know, kind of hit you where you live? Well, you can go bet on that. On Kalshi, Poly market's going to be harder. You're talking, if you're talking about retail success at Polymarket, you're looking at widespread crypto adoption and there's a strong crypto community. And it's not that again, it's not that Polymarket isn't successful and that they have no future. That's not true at all. It's just, it's going to be hard to attract, you know, ordinary people. You're like, you're not going to get that 80 year old guy in Alabama betting on Trump to win the election on Polymarket that you will on Kalshi. So I think they're going to have to Polymarkers and have to overcome that. Polymarket also has issues with their market resolution process. They just had another scandal this week in the market on whether Zelensky wore a suit to the natives.
- [22:42]
Chad Moman
Yeah, tell people about that because that's, you know, you're, you're in this space neck deep. I'm in the space waist deep. And that, that controversy to me was the epitome of what are some of the issues with all of these things?
- [22:57]
Chris Gerlacher
Sure. So I mean, the big question if you're a prediction market is, you know, once an event has happened, how do you decide that it happened? Because money's on the line in some case, hundreds of millions of dollars or hundreds of. Yeah, hundreds of millions. So, you know, you need a good process to, you know, decide when an event has occurred and how, you know, you're going to tell people that it actually happened. Kalshee does, what Kalshee does is they, you know, list the resolution terms under their market and they will link to the, you know, kind of third party authority that they're going to use whose data they are going to use to settle that market. So if you're betting, you know, or you're trading, you know exactly who is going to, you know, make the call that, you know, we, you know, have an effective tariff rate of 6%, whatever the market is, what polymarket will do, they have that same description, but it's a lot of reliance on one, just a consensus of credible reporting, which isn't bad most of the time. But it also leaves this gray area that's issue number one and issue number two. Polymarket uses a blockchain service. It's a product called the Optimistic Oracle, the UMA Oracle. And this is like a cryptocurrency. You can log in on Coinbase and you can buy the UMA currency and you use that to cast a vote in poly markets markets and say, hey, I think the event has happened. I think the market should resolve this way or that way. And since it's based on how much UMA token you hold, how much of this currency you hold, it's kind of this Gilded age oligopoly now where a couple of very, very large traders can just take over the market. So their market based solutions they're so proud of is it's not a free market. It's a market where I think two traders hold just over half of all the UMA tokens.
- [24:54]
Chad Moman
This is ridiculous.
- [24:55]
Chris Gerlacher
Not a good way to resolve markets. Now the consequence of that getting back to Zelensky suit. After Zelensky's Oval Office confrontation with Trump and Vance earlier. It was earlier this year. Governing politics is hard because there's just this time dilation.
- [25:13]
Chad Moman
Yeah.
- [25:13]
Chris Gerlacher
So much happens.
- [25:14]
Chad Moman
It was February.
- [25:16]
Chris Gerlacher
I still can't believe that was just February.
- [25:18]
Chad Moman
Yeah.
- [25:19]
Chris Gerlacher
Anyway, after that, you know, one of the jabs at Zelensky was like, you don't even wear a suit and he's in, you know, military fatigues because he's know, mid war and. But he stepped down in the NATO summit with, with a suit that was designed by a, you know, designer who wanted to incorporate some military dress and things like that. But it was identifiably a suit. So the market on whether poly. So the poly market market on whether Zelenskyy would wear a suit should have settled to yes. Instead it resolved to no after several rounds of voting and, and dispute. And it's because these big Uma whales, these giant wealthy currency holders were able to just cast all the necessary votes to resolve the market in a way that would get them more of their UMA tokens and more of their money. So that's an ongoing issue that Polymarket has. They did it late last year with like, will Israel invade Lebanon in September? Will they invade Syria by the end of the year? Just a couple of these fuzzy terms, like what is an invasion, really? And kind of which time zone are we looking at? And some of these issues, these really big whales can take advantage of any fuzziness that the finest lawyers in the world kind of do in court. They use that same precision of language to try to try and resolve things their way. So polymarket has a structural problem that they really need to solve, because this goes back at least as far as back as late last fall and certainly goes back further.
- [26:51]
Chad Moman
Well, it's worth a billion dollars now. They can try to figure it out, which is kind of insane, right? And that sort of speaks to a little bit late 90s, and then with sort of the dot com blindness and then speaks to social media euphoria and the investments that took place in places like Facebook, places like Twitter. The growth of something like Instagram to get bought for a billion when it barely had any users or was still, you know, in a huge growth state. That's a lot of what this feels like to me between the kalshis and the Poly markets, especially with the way they've been able to raise. And also, like, there's a day trading, sports betting, crypto manosphere ethos, sort of a bro economy that exists now that is helping to propel some of these things. I'm wondering if you're seeing some of that in your reporting as well.
- [27:56]
Chris Gerlacher
I mean, yeah, you're always seeing the influencers get really excited about prediction markets being the news. And in my mind, the news is the news. Once a market resolves in real time, it's really cool. I was writing a story that included, I think it led with the big beautiful bill vote, how individual senators were going to vote. And while I was writing it, the vote was happening. And I knew the vote was happening because, you know, Murkowski's odds spiked up to like 96% and then Collins was dropping like a rock. And, you know, I wasn't watching. I didn't have C Span in my corner because that wasn't what the story was about. And I didn't have it up. I thought I had like at least one or two more hours, to be honest. But no, that was. That was kind of wild to watch. And prediction markets give you a great state of the race. And I think they're still benefiting from, you know, how much earlier they called the race in 2024 and how much more of a lead they showed Trump having than Pollston. But the forecasting piece of prediction markets is a lot more nuanced than the hedging piece. And there's a Columbia economist who, Columbia University economist who studied Polymarket538 and the Economist poll side by side for 13 competitive house races. And Poly Market was never in first. Sometimes it was the least effective polling mechanism. So for these really smaller races, I think you can see polls do. My prediction is polls will do pretty well in the midterms compared to prediction markets. And then prediction markets will have another moment of glory in the presidential one where history is not as good a guide for forecasting, for forecasting the presidential election because you can get these. I mean, Donald Trump's a French candidate. In 2015, he was, you know, I don't think a pollster would have necessarily predicted that Donald Trump would, you know, do really well in electoral politics before he came on the scene in 2015. But you test these new ideas and these new characters, the national level, and sometimes things take off. And prediction markets are really good at bringing that new information together where pollsters are relying on past history. So I, yeah, so I think there's gonna be a lot more nuance that comes alive, you know, in the, in the forecasting space in particular. And I don't know that that will dampen the enthusiasm for prediction markets. But, you know, I think they also benefit from, you know, kind of the self sufficiency of financial trading too. You know, the idea that you can trade yourself and, and know the future better than everybody else and, you know, be the self sufficient man in particular. I mean, I grew up in Texas. I know what, I know what those noises sound like. But it's also, I mean, those same things, those same beliefs are, you know, cognitive behavioral therapy for financial trading addicts. There's a professor in California who's on the front edge of trying to, you know, prepare, you know, gambling counselors as well, to, you know, properly treat people who are using financial platforms as, you know, gambling platforms and, you know, hiding behind, well, I'm investing, I'm not gambling. Even though, you know, they're functionally gambling, even if their activity that they're choosing is regulated under this different umbrella.
- [31:09]
Chad Moman
Simon, by the way, we've hit like the nirvana for me, where we are talking about the geekiest, most technical stuff and then throwing in cognitive behavioral science. I don't, I feel like I should just end the podcast now because it'll never be Better for me. But I do remember for you, Simon, election night, I'm just settling down. My wife had insisted on inviting the neighborhood over for a freaking party for election night. Everyone finally leaves. I'm sitting on my couch, I'm about to watch John King give me the results from Kalamazoo county and you're texting me and you're saying it's over. And I'm like what are you talking about? I'm just sitting down to watch the results and you're like check out the prediction markets.
- [32:06]
Simon Hunter
Yeah, again it's, it's a different world where I, I don't know much about betting politics but luckily I have people in my life that do it professionally and these guys texted me at 8:30. I took an incredible amount of positions, bet a lot of money. I think I texted you right before about 9 o' clock and told you it was over and that the market was about to move an insane amount in the next 30 minutes. And you saw live where it's like our money comes in, the public follows that money because they don't know, they don't have the inside news like these guys do. And again, I don't know how they do it Chad, but like you said, the predictive model of the markets is my favorite part of election night. That these guys know three, four hours before the general public and all these news media outlets, it's, it's one of the more interesting parts of the world we live in and it's always fun picking those guys brains that do it and how some of them can predict it a year or two out based on markets, money trends and general public feel. And you know, it's, it's always going to be interesting. It's, it's just a different world where we, we talk about action. One of our biggest nights as a company was I believe in 2020, right with the election night. They crashed our site because we were kept updating the market right. And where it was at and people weren't going to Fox or cnn, they were coming to action to get the truth and the truth was telling them no. This is what the numbers are saying, this is who's going to win this election. So yeah, I love it. And again this to me is why I hope these markets do last because it's just another tool to use and another way to make money.
- [33:44]
Chad Moman
You're a great follow on Twitter at gerlacher C and this is really interesting stuff and really important stuff that I think is going to impact anyone who has an interest in this show because it will become more accessible and available to people as compliments potentially to what people are doing regularly with places like DraftKings, FanDuel Fanatics, et cetera. Last question. You were just at I believe the Manifest conference about a month ago or so. Explain to people what that is and then tell people the most interesting thing that was the most mind blowing thing or the most. Oh my God, if this really happens. It's crazy thing from the conference.
- [34:26]
Chris Gerlacher
Oh man. How to explain Manifest, Zilber's new book. He spent some time just describing it. So Manifest is basically, it's half conference and half festival. So it's this gathering of. They're really trying to attract big name stars. So like Nate Silver, Jesse Richardson at Political Kiwi on X, he's a great political trader. You know, David Shore, great progressive Democratic pollster. Richard Hanania, a very good conservative pundit. He's not a pollster, but he's, he's actually a pretty good commentary. He's a, he leans, he's a libertarian who had to come to Jesus moment about Trump earlier this year. So he was interesting to watch and he also did a really good job in hindsight of predicting Donald Trump's rise. So anyway, you get people like that who are giving talks and then you have all these, you know, really kind of quirky technical folks. The, the, the, the sexploration people, the sex influencers like Ayala are also there. There, there's, you know, it's all about body positivity and, and kind of intellectualizing of sexuality as well. So a lot of different intellectual spheres all come together at Manifest at this campus just off of, off Berkeley. And it's a, it's a really cool space and you know, definitely worth, it was definitely worth going to for sure. But the most mind blowing thing for me about that trip was the idea, the looming rise of AI traders and LLM traders. So you know, LLMs can already like chat, GPT can research a trade for you and pull some sources and perplexity AI can, you know, give you some trading advice and do some research for you. We're getting very close to arguably within the next four years according to at least one study I was shown there of AI traders who match the accuracy of so called super forecasters, people who are just very, very accurate traders beyond what experts and even what wise crowds can, can achieve. So the, the rise of AI traders is going to have some hard questions and I think the free to play and crypto platforms are gonna have to deal with it. First. You know, right now every user should be a human trader on a regulated free money or real money site like Kalshi, right? You can't have counterfeit people on there even if you're using AI to assist. But you know, there's at least one startup there called Futur, another prediction market site and you know, they're already preparing their UX to have fully autonomous AI traders with their own accounts. So the I wave is not just, you know, it's not just coming for the white collar jobs. Jobs are looking at traders too, pretty soon.
- [37:15]
Chad Moman
Betters.
- [37:16]
Chris Gerlacher
Yeah.
- [37:16]
Chad Moman
Chris Gerlacher. Fucking awesome, man. That was great. Follow Chris on Twitter at gerlockerc. Check him out at Prediction News. This is a fascinating space that people need to pay paying attention to. So thanks for. Thanks for jumping on brother. I appreciate it. The favets will return with our next episode of the show Tuesday Action Network YouTube page. Download us from Spotify, Apple Pods, wherever you get your pods rate. Review. Subscribe. Leave us. Five stars. Say whatever you want. Feedback is a gift. Until next time. Love you. Action Network reminds you, please gamble responsibly. If you or someone you care about has a gambling problem, help is available 247 at 1-800-GAMBLER this is an I Heart podcast.