The ROAR Podcast: Prediction Markets Explainer

# ROAR Podcast: Prediction Markets Explainer
**Guest:** Prediction Markets Explainer
**Date:** 2026-02-19
**YouTube URL:** [https://www.youtube.com/watch?v=rwEtTZWTZt8](https://www.youtube.com/watch?v=rwEtTZWTZt8)
**Source:** YouTube auto-generated captions (no speaker diarization)

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(0:04) Welcome to the Northwestern Master of the Arts and Sports Administration Revenue Above Replacement Podcast. I'm Bryce Clinton. And I'm Adam Gman. >> Adam, great to see you as always. >> Great to see you, too. I love these episodes because not only does it get a lot of detail to the listeners, but I always feel like I get educated in these episodes because I think we pick good topics to talk about, and a lot of times you have a lot of great information about them. And today, very timely, you had an article that just went up today around a small equity stake that Giannis had in Koshi, which is a prediction market. Prediction markets are things that have been in the news a bunch lately. And so, we wanted to talk about prediction markets as a whole and the small equity stake that Giannis has and what's going on there. I think that for everybody, the two of us could give our view on what a prediction market is and the differences with gambling. Well, one, thank you.

(0:54) >> This was your idea. So, and usually come up with the ideas for the topics for us to discuss. So, it's great that you come up with the topics and it's good. I think you're very much in line and in touch with what people are thinking about particularly from a sports business perspective, particularly what our audience is interested in. And as I tell all my students and people who potentially want to work for me, flattery gets you everywhere. So hopefully that sorry that part. So in terms of prediction markets, discuss it more in the newsletter that I posted well today for us obviously tomorrow when the podcast is released. But prediction markets are basically they're structured as event contracts. And that's important because that is at least from the prediction market perspective considered different from sports betting. In general, sports betting is you're betting against the house or betting against FanDuel or DraftKings or Bet MGM where you place a bet and they take the other side of the bet. In the prediction markets, there's really a market where there's two parties. And in the way that these prediction markets work, there's a binary event outcome. a yes or no outcome. So that's not necessarily the case with sports betting where there can be not necessarily just yes or no outcomes. You could bet on point spreads and in a variety of different you know individual prop bets and there's a bunch of different bets you could take and there's still some decision points about exactly and these prediction markets are evolving but generally that's the difference is a prediction market is you're betting against somebody else and people are taking two different sides of a binary outcome a yes no decision.

(2:19) Giannis's example, will Giannis score 37 points? Yes or no? Not how many points will he score, but will he score this amount of points? Somebody will take yes, somebody will take no. And the prediction market puts a probability typically zero to 100% to say, will you know, Yiannis score a certain amount of points. These predictions, >> that's a good thing to linger on though, right there. like it's binary, meaning you and I could pick yes or no on one side of the quote unquote argument and then in that financial component of it, like if a contract pays $1 if the events happening and it's trading at.7, the market's essentially saying there's a 70% chance of that happening. But again, it's a binary decision of Adam's saying yes, it will happen, Bryce is saying no, it will happen. And in essence, they're betting against each other or are on opposite sides of that contract. That that's exactly right. I mean that's a very good way of describing it. The only other thing I was going to say is obviously this is still part of what we were going to say and we could probably dive into this more is whether this is sports betting or not is being decided. Currently there are specific laws about sports betting and all of those laws or with the repeal of PAPS which sports betting in every state except for Las Vegas. When that was repealed in around 2018, individual states set up their own betting regimes that were regulated by each of those individual states because these are event contracts. So far, these have been regulated on a national basis by the commodities future trading commission or FCFTC.

(3:53) And that is obviously a big source of controversy because his the reason that it occurs is because the way that couch and poly market makes money is they take a percentage or a small take on the transaction itself. They don't say one way or the other where in sports betting the house is taking the other side of the bet. That's what they're claiming is providing a market versus taking the other side of the bed or the wager is what they consider to be the difference between prediction markets and sports betting. So essentially we're saying like the commodities future trading commission regulates that is essentially like if you're betting on corn futures or wheat futures similar agency that regulates that which again like you talked about there's a lot of back and forth on if that is the right organization to regulate these things is this gambling should it be at the state level because again as you mentioned it is at the state level from a sports gambling perspective and I think that a lot of the conversation has been around what is the regular population around us. I do think there is some question too around what I'll call ethical concerns. Should we be betting on these things and betting I'll use as a loose term here of picking sides of the argument. You see on a lot of these prediction markets, Koshi being one of them that Giannis has a small equity stake in Poly Market another one. It's not only sports that you can into these contracts around.

(5:13) It's things like politics or geopolitical events that are happening. And so I think that there is a lot of question around that from not only users of the platform but from the populace in general. >> Yeah, I think there it's probably good to take a step back to look at prediction markets before kind of the rise of the more current iteration of prediction market. The idea of prediction markets was people are are trying to think about how do you predict future outcomes and the idea with prediction markets was like if you had a stake in that outcome you're more likely to make an accurate bet. So in particular in politics where prediction markets were most famously used before sports, it really was like how do you really understand voter sentiment if you ask people a question in a survey that's different than if they go into a market and had some either incentive or financial stake in the outcome. There's a book by James Surway who at the times >> Yeah. Exactly. So he talks about prediction markets and I think that book came out in 2004 and he's clearly talking about prediction markets as they've already existed in a university setting before that. So the idea of prediction markets have existed prediction markets also and we can talk about this a little bit more detail later in the episode were supposed to be used as a hedging mechanism. You talk about the CFTC in terms of actual commodities like corn. The reason that that exists is so people can hedge and get price certainty on particularly on commodities so that they could know or bet on what the future price of that would be and that creates a hedging mechanism so that you can reduce your risk and there are opportunities for these markets to help do that in sports in certain ways. But the reason I bring that up is there actually is a utility in prediction markets beyond just people making money off them. you actually could the theoretical reason they existed was that you could get better information and make better predictions on future outcomes and that's the utility of them. I think separately when you're talking about sports wagering prediction markets or sports betting there's always the concept or idea of like how much promotion and we certainly dive into that. What is very clear at least to me is that these types of activities have gone on through the history of time. Right? People have been making bets on sports in whatever form through the history of time. There is a question always of whether they should be promoted, whether they should be taxed and whether they should be regulated. In my view, that is generally better. Transparency and openness and legal regimes and legal regulation makes it safer, better for everyone. Now obviously there's impacts to that particularly from in terms of like gambling and addictive gambling and promotion particularly to younger demographics which we can definitely talk about but again you have to weigh the pros and cons of there's a black market that has existed for sports gambling particularly prior to PPS's regulation and weigh that against everything that's happened since that's been repealed and the rise of sports betting and now prediction markets more generally.

(8:05) >> Yeah. Yeah. And if you zoom out like you said in that book that you mentioned, the wisdom of crowds. I think one of the things they talk about is the beauty of the prediction market is it aggregates information from everybody participating, right? And that could be insiders, analysts, the lay fan, whoever, right? But it aggregates the information again wisdom of crowds more of group think of we can predict better outcomes like you said because someone has a stake in this and that gives a better view into what is actually going to happen. I think if you go back to it too of kind of how they work. I think I get this a lot in class and I get it with a lot of people I talk to is you know gambling itself and we can talk about the perils of that especially like you talked about with younger audiences but there's so many complexities to gambling the parlays and point spreads all of those things. Again, back to this pretty binary, right? The contract is created, it pays out $1 if it's true, $0 if it's false, right? And then price becomes that probability inside of it, right? So 35 cents means there's a 35% imp probability that something is going to happen. And so I do think there is some higher level of clarity that people have with these prediction markets being more binary, being more straightforward because you see a lot of problem gambling or things from a sport gambling perspective with getting deep into multiple team parlays or a lot of the prop bets and then that cascades itself down further. A lot of the things that have happened across leagues recently is X player going to score this many points or play this many minutes which can easily be manipulated in many ways. And I think there's lots of things that you could talk about from the prediction markets, but those things don't exist in the same way they do as in traditional gambling.

(9:47) >> Yeah, I think well a couple things. One, these prediction markets have explicitly looked into parlays and are in process of looking into parlays. Parlays very popular products from a sports betting perspective because typically you don't get compensated enough for the risk that you're taking. The two legs put together are typically in the odds that you are given are in favor to the house. There are some of the more profitable bets. They're also bets that novice betterers tend to bet more on. There are times when parlays are priced inefficiently.

(10:18) And if you're able to really figure out the reason a typical thing will be somebody wins a game and then somebody scores x amount of points or has some other action or a star player has x amount of action. If you are really able to identify what's driving that outcome, then parlays can be an efficient betting strategy, but that's very difficult to figure out. And the sports betting companies have spent a lot of time, money, and energy, particularly FanDuel was one of the initiators of parlays, but they spent a lot of time mining and energy to try to figure out what the probability of success and price that accordingly and use it to improve their profitability of those bets. I will say prediction markets have been exploring parlays. This is one area that is of interest is that the koshi or poly market itself would be the counterparty on a parlay bet and that's being explored as well as opposed to part of the challenge with parlays is who would take both sides of that bet. You'd have to find another counterparty or another person or another entity to take both sides of that bed and that's more difficult where in traditional the parlays are being explored. The reason I bring that up is like obviously these are fluid in that level of detail as these are fluid markets and these things are changing and rapidly changing and these companies are relatively new. The regulations relatively new and both Tai and Poly Market have received a substantial at least in the hundreds of millions if not the billions of dollars of outside investment and obviously investors are looking for returns on invested capital. You mentioned before about these prediction markets they have all sorts of event contracts. They're not only sports, but a substantial, if not majority of the amounts that are being traded on these platforms do come from sports. So that's obviously where there's a substantial amount of interest and it will be interesting to see how those markets evolve. There are ways that these types of markets can evolve into hedging instruments and again provide actual utility whether it's against player injury or other unexpected outcomes or expected outcomes that do occur with sports and sports games you know injuries win loss.

(12:18) There's a lot of ways that you actually could use these as a hedging market. So not just as a wagering platform or a market for people to make wagers on, but to use them in ways that are and Koshi and Poly Market are actively considering those. And I believe Koshi, it's either Kowi or Poly Market, but I believe it's Koshi recently signed or is exploring a new relationship explicitly to become a hedging market and looking at the hedging. I believe it's player contracts because there's a substantial insurance and reinsurance market for player contracts now where teams can take out policies on players to make sure if they get injured that they can they have to pay premiums but if they get injured they're able to exercise their policies to help pay player contracts. I didn't know that the parlay was something that both of those were looking into. And I think that's interesting because would that change the regulatory structure of these companies? It always seems to me that because they position it as contract and peer-to-peer in many ways that the regulatory component of that stays how it is. But if they were to become quote unquote the house, does that regulatory structure change? We'd have probably have to talk to your wife or other lawyers that we know to make that decision. I think that's part of what they're exploring, right? is like if sports wagering or sports events are the most popular forms of you know or the highest transaction volume on these platforms and clearly it seems at least to date that parlays are one of if not the most profitable kind of sports wagering that you can do. They're actively exploring ways that they can integrate that into their platform because it makes obviously makes financial sense. Now whether they can do it and whether that would work but them being the house and for the exact reasons you said that's something that an attorney would have to I'm not even sure an attorney I think that would have to be a litigated you a decision would have to come directly from the CFTC or some other legislative body or that had to be litigated in court and we've kind of danced around it or talked about a little bit if you look at some of the downsides you know there's been many investigations into this Pablo Tori he did a great one recently on his show about prediction markets I think there's a manipulation risk Right? If liquidity is low, wellunded actors can push prices artificially, which happens. I don't think it's happening as much with Fouchy or Poly Market because the much larger markets now, but there is that possibility, right, that a wellunded actor, they had a great story about betting on an election and someone in France bet millions of dollars on one side and was able to push the markets in one way. But that's true in traditional gambling, too.

(14:49) There have been arguments about insider trading and whether insider trading should just be generally allowed because if you're going to integrate to get the best information possible into the markets, should you allow for insider trading, there's an argument to be made for that. Yeah, whether people believe that or not and sometimes I don't believe that necessarily fully, but even within stock markets or equity markets, there's at least been theoretical debates about that. That is definitely a concern uh with these platforms and e even within couchy and poly market relative to equity trading platforms or even probably sports betting platforms the trading volume while large is still not as large as those platforms. So you're right they can move the lines or move the needle. One difference when you're talking about sports betting is the house can adjust the odds when they see betting coming in. The event contracts can be adjusted but the other side of that transaction is not the house. Right? So it's somebody who has probably less liquidity than a obviously than a sports betting platform like a FanDuel draft game. So it's definitely interesting. This is an evolution. Do you want insider trading? Do you want people obviously that goes into insider trading from an athlete perspective. Do you want athletes trading actively on these platforms knowing athletes, coaches, managers? I obviously historically the answer has been no.

(16:04) they should absolutely not because you don't want outcomes to be determined by people who obviously are betting on or wagering or having some kind of transaction on the platform. That being said, as we've talked about, do we want teams to use this as a hedging mechanism against injury, weather events, other kind of events, and where's the line between what an injury is versus actual team performance? That's what makes this so interesting is some of this definitely needs to be figured out particularly for this to be successful. What there is is clearly a demand for these types of prediction markets or sports betting more generally and it's just right how do we iron out all of this and it's still so early we probably should avoid using baseball puns or metaphors but early innings of how this is going to work at >> and even gambling too it's still playing out obviously it's been around for longer in lots of forms but the permutation of we have it now it's still early in that it's still playing out in many ways the insider information piece if you take it back to truest definition of these prediction markets, you're right. If the goal is to get the wisdom of crowds in it, then maybe having the insider information in there is the right play. But then you look at the the flip side of it and does that sacrifice the integrity of the games?

(17:17) Whether it's from the people participating in the games and people with insider knowledge of those games and then themselves making bets. You can look at it as a financial instrument in some ways, you can look at it as something for fun, but it blurs the line between the two. And I think that's what makes it so interesting because it's not sitting in a traditional box that we think about when we think about sports gambling. >> Yeah. Again, it depends on what the outcome you're looking for is. If you're saying what is the best way to get the wisdom of the crowds to resolve an event contract, it would be having all the possible information. There's an irony in the wisdom of the crowd in that the wisdom of the crowd comes from everybody making independent decisions because there's some always a confusion between wisdom of the crowd and group think right group think is happens when people make decisions when they're not making their own individual choices right so you're just following somebody else because you're following somebody else and that leads to group think and group think has very deletious or negative outcomes wisdom of the crowds comes from everybody taking and making their own individual choices and then aggreg ating everybody's individual choice into the wisdom of the crowd and like individual choices and the best information possible would be the inside information. Clearly the goal of sports the sports industry is not to have the best predicted outcome on a prediction market. So like that's why you have to weigh in and similarly on stock markets the goal is not to have the best necessarily outcome. is to make sure that people can trade equity. And the reason there's legal and regulatory regimes is to make sure that people aren't cheated or that these markets do function efficiently and that people aren't disproportionately benefiting from knowledge that other people could not or would not have to make these trades. That's very clear that we're not saying that athletes, managers, and anybody related should in these prediction markets. And that's what's interesting about obviously that's one of the conversation points that I discussed in my article about Ayana Zupo and his investment right is clearly there's seems to be a contradiction there between his investment and I think that can be ironed out can believe in the product and he should participate in the value accretion but that's what the comment is from social media some like one of the things that you're bringing up is you know this seems to be a conflict of interest at least on the surface and how do you resolve that as you move forward is certainly an interesting topic for discussion with these markets. Yeah, let's linger on that for a second because your article is a good one talked about youngest when you say small equity stake he has an investment in call sheet and in turn for that in there's some level of relationship that they have from a promotional perspective is that the >> yeah I mean at least there was a public announcement made about his being an investor in Daui I'm not sure if there's anything beyond that but clearly it is visible that he is a he is an investor in Daui and will that lead to other athletes investing or content creators investing or does that make more likely that the NBA or some teams in the NBA might have a relationship with Kawashi?

(20:20) That's still to be determined and debatable, but it's very clear that he has the relationship and it was very clear that Kawoshi and Giannis agreed that they should make this relationship public. So to be clear on this and from what I understand, there's nothing that precludes him from having this relationship from a CBA from a leak structural perspective. >> Yes, of right now. >> That is my understanding. Adams specifically asked about this during his press conference at the All-Star game and he explicitly said that the NBA at least is not preventing him from doing that. Now whether the NBA believes Adams in particular was the first commissioner, he was a vocals proponent of legalized sports gambling. He wrote an op-ed in the New York Times I believe around 2014 or definitely a substantial amount of time before that the Pepsi was repealed. Obviously there are differences between again as we've been talking about prediction markets and sports betting but it certainly put the commissioner of the NBA and sports leagues. Prediction markets have put them in a very interesting position.

(21:19) There are certain leagues particularly NHL that's leaned into having a partnership with I believe it's either with Koshy Poly Market or both. And the idea is that they want to make sure that if these contracts and event contracts are being traded that they have the right information and that people feel confident and get the right information from the NHL. Other leagues are actively exploring these relationships. And as the legal regulation has been being explored, different leagues and different teams have different tolerance for exploring the relationships and we'll see how that goes on an ongoing basis. And >> I think it's interesting you bring it up. The NHL it is both. They have relationship with Kouchy and Poly Market and as you mentioned it's partly to provide data on one side but I think again it seems oftentimes with gambling or now prediction markets we don't know how they're going to play out. the leagues are trying to get ahead of that and be involved in some way because the financial upside certainly is there.

(22:11) There's a lot of marketing dollars that go into those things. I mean, every time you watch a sporting event, every other ad is something for some level of wagering. And not making a value judgment on that in any way, but pointing out that it is certainly prevalent in sports. And so, it's interesting to see these markets getting involved in that and the leagues taking an opportunity to get involved in those as well. You mentioned Adam Silver. I think the NBA is an interesting one because unfortunately there has been some unfortunate news recently from an NBA perspective, but that goes back more to traditional gambling. And I think what's so interesting about those things is it's back to those prop bets, right?

(22:49) Is this player going to over under number of rebounds they may have or things that can easily be manipulated? And I think that that is, you know, something that can and could be examined by those not only betting companies but the leagues and teams themselves. But it seems as though in some ways there is a little more transparency in this because there is not the individualistic proponent of that. One of the things that is interesting is that actually there I believe there has been a pullback on sports betting partnerships and advertising. It's very common when a market is open that there is a big push and when I might market usually that's a specific state that opens up there's a big push and after that there's less and there's potentially a pullback. There's still relationships at a league level, but actually you probably will see a reduction in marketing and advertising spend because it is expensive to do that. And once they're in place, there can be a pullback on those types of partnerships. which is why part of the reason prediction markets are so enticing to leagues is that whenever there's a new category, this happened somewhat of a similar playbook with crypto, sports betting, >> daily fantasy sites, and now prediction markets is that when things are ramping up and there's a new industry or new category that enables a ramp up partnership and advertising spend so I think that is notable. That's part of the reason most likely that leagues, teams, events, athletes are exploring these relationships is because there can be a pullback on some of this other because they're not from at least from their perspective. They're not necessarily seeing the return on investment. Whether that's true or not, that would be something that my company could help with. But that's point is like that's that is one of the reasons that the NHL and other leagues have explored this. To your second point about the NBA, clearly that's why this was brought up in the press conference is that the NBA in particular has had multiple sports betting scandals. The FBI has gotten involved. Most recently, there's been issues not just in the NBA, but in some college basketball where there other people have been targeted by the FBI andor have been arrested. So, it's clearly something like how do you balance prediction markets, right? I mean if you know the my understanding is that there is no difference between from their perspective in terms of players, coaches, management or anybody associated with those teams being involved in sports betting or prediction markets. They view that like you cannot be involved is my understanding. Like I said, it will be interesting to see if at least on the team management side if that regulation eases up and you are able to do these insurance contracts on players or other outcomes that you can hedge the risk and that does become a useful utility and actually moves these prediction markets. In my analysis of Koshi, looking up the honest announcement, the brand sentiment both from a digital media in terms of what are people saying and is that conversation positive or negative about Koshi is below the average value that we find for other topics more broadly and more generally. if they become a useful utility and people see them as a useful utility in addition to these types of event contracts that are more associated with sports wagering or sports betting.

(26:00) We'll see if that changes their perception and one way they could do that is providing a useful utility to sports properties in the ways that we described. But in the interim, how do you navigate that is definitely a challenge for these leagues. And your articles are always well researched and it wouldn't be an article that you wrote without a ton of data and data backs that up. And what it says is that it may not be an ideal fit to be honest and with Kawhi, but like you said, there's still a lot to play out in those things on both sides of it. And I think part of it too, he had no association with gambling previously or any betting markets previously, so it may be out of the norm for him in that regard. Yeah.

(26:37) Back to the NBA and the basketball part of it. Do you have a reason or is there a thought that you have of why the NBA or basketball in general seems targeted and or right for some level of manipulation? To me, it seems like because of the individual player performance and how that can impact the overall outcome or more readily I suppose the ability to bet on individual player performance I think could have a big part of that. >> Yeah, just a I think that's exactly right. So that the individual performance is easier to manipulate because it's one person over a team. And that's part of the reason that these bets a are known to be bets that can be manipulated. Reason that the FBI and some of these other players have been both in baseball is another one particularly on specific pitches. That's been one that has been in the news in terms of individual players being at least accused of, you know, manipulating their performance based on sports betting or sports wagering. So, I think that's why there's been a push, particularly if you're talking about curbing sports betting, potentially eliminating or regulating more heavily individual player prompts is something that is a focus. To your first point about my article, just to bring people who haven't read up to speed, it really was there's been a lot of conversation rather whether Giannis should or should not have done this investment with Koshi. What I wanted to look at is whether this investment actually made sense from a business perspective and from some of the key metrics that we looked at is does this increase or enhance brand perception. Are people talking about Koshi more positively and could this potentially drive actual transaction or revenue? And what we found is that you know for the reasons that you said while sports fans are more likely to be interested in prediction markets or wagering or betting Giannis in of himself was not necessarily or his fans was not known for having expressed an interest completely understandably as an individual athlete. He has been not known or associated necessarily with betting or wagering. And that led to conversation that involved both Giannis and Khi to be particularly have lower positive sentiment than Kali on its own or conversation more generally. The audience also his audience while did overindex in terms of their interest and we really focused on behaviors for this article and we defined a social behavioral analysis by is a person a fan of Giannis and what other accounts do they follow and similarly is a general population what sports betting accounts are they following and how often are they following that and then just basketball uh sample basketball accounts more broadly and we did find that Giannis's fans were substantially over six times more likely to follow sports betting and gambling accounts than the general population. But in our basketball analysis, we found that basketball fans more broadly were 10 times more likely to find follow sports betting and gambling. So it just showed that from a behavioral perspective or one behavioral indicator that Giannis's audience was not as likely to be interested in sports betting and wagering and gambling and potentially NBA fans more broadly. And then also that the conversation around Giannis was less positive than it was around Kawhi and other topics. And then we also did a topic analysis to say what are people talking about in these conversations and the topics were generally not positive and highlight some of the things that you've talked about. So it just goes to show when you're thinking about partnerships more broadly that you want to think about fit and it's obviously possible and we don't know exactly what Kowi did to analyze a potential partnership particularly an investment relationship with Giannis. There's certainly again this is only a short-term analysis and only looked at specific components that we looked at for this analysis and I do think there could be long-term benefits and Giannis should be able to participate in any kind of enterprise value accretion that occurs like if these companies become more valuable he should be able to participate but there's some initial indications that this wasn't at least from the start maybe isn't as successful relationship as both Talshi and Yan has hoped it would be >> the interesting part of that is you talked about those first two things the sentiments the discussion around that you obviously have really good ways to measure but then think about the long-term impact is that are those things correlated and what I mean by that is maybe the sentiment is not necessarily good per se but does that necessarily mean that people won't have an interest and you're like oh okay I saw that Giannis was an investor in this I'm going to check this out and then move forward and become involved in it in some way we also do find a correlation between brand awareness and revenue generation so yes it is possible right part of it is all news is good news kind deal right where it's obviously it is increasing awareness in Koshi but still now relatively niche player in this space so is poly market as particularly as compared to DraftKings and FanDuel so there's definitely a desire to increase brand awareness and clearly this did drive some amount at least of increase in brand awareness so it's a fair point and I mean there is you should explore that as part of the initial success and that makes sense and that can be something that did happen I was looking at in particular is like here are some of the other reasons that it seemed like they made this announcement on it because there are the reason I focused on that and I should have made that more clear it's a good point I should have made more clear in my article is there obviously are a lot of famous basketball players and you would get probably a similar level of brand performance or brand awareness generation from other investors and increasingly athletes like LeBron James, Kevin Durant, Chris Paul have made investments not necessarily in prediction markets but in other things that have helped to increase enterprise value. Kobe Bryant famously made, I believe it was $400 million on his body armor investment. LeBron James has made several successful investments, including Blaze Pizza, where he was able to earn, I believe, tens of millions of dollars. But if you're going to make this type of announcement, would it have made sense to A, did it make sense to use an individual basketball player? B, are we looking at the right metrics for outcomes and why they would want to announce this relationship? And that's why I focused on those outcomes. learned recently that Kobe Bryant is the only person to have an Olympic gold medal and an Oscar which yes he's a very impressive dude bummer that he didn't have the second chapter of his career but this is a nebulous question I think it's hard and I've been thinking about this a lot and I don't know the right way to ask this but if you look at the research and the people involved in prediction markets we talked about the book that was written the guy that was interviewed on Pablo Tor's podcast the wisd is an academic and a very strong academic and it has a ton of great work.

(33:07) I almost look at this as prediction markets are seen as less seedy, more high-minded than traditional gambling. But is that a sentiment that is individual to me or do you think that that's a larger sentiment across the board? >> Well, first I should say that Michael Jordan was wrong for not winning an Oscar in Space Jam. So maybe that's >> that's also as as Kevin David P had a close relationship. I and he was a producer on that movie. His close relationship with my comedy. I definitely want to say that. But all joking aside, but in terms of I think that was part of the reason that Koshi and Poly Market pursued that and we had Alex Kaine who helped to create another peer-to-peer market for in a similar way, a similar idea is that he wanted to eliminate or kind of remove a some of the stigma from what exists around sports betting traditionally, but also create a better product and a better offering. I think there is some ways that prediction markets are a better product, a better offering, and because instead of the house trying to set odds and trying to make sure that they're taking the right side of the bed if you're just making it easier for people to wager against each other and you can look at sports betting as an indicator of what people think the outcomes will be for certain events. But clearly prediction markets at least the belief or the hypothesis is that there are better ways of doing that and that instead of the house setting the minds all sorts of people from all sorts of backgrounds making all sorts of decisions but potentially make better outcomes. Now I think what is happening is that and a lot of commentary is there is a convergence between sports betting because there's a convergent becomes so much of the transaction volumes on prediction markets is sports wagering that a lot of the sentiment around sports betting is going to filter into these prediction markets again some of that I think is unfair like I said I think people get people have bet on sports since the history of time I think this is a better approach and if we know people are going to do it even having two different types of products where you can either bet in a prediction market or bet against the house and be confident that these are done at least for now a legal way on both platforms is I think a better experience and a better product and a better offering. There clearly are downsides to that and obviously those downsides we've talked about and they're well publicized but again the and from my perspective it is a net positive trade-off to have a legal regulated sports betting and prediction market offering and people will get fun and entertainment from both and some people obviously will make money from them and there are utility understanding that there also are downsides to these things.

(35:36) >> Totally and I think like you said consumer choice is always good too and having the option to go in different routes. I often talk in my course when we talk about gambling is those big beautiful buildings in Las Vegas and Macau do not get there because we're winning all the time, >> right? >> And I think that in the prediction markets you have some way of not playing against the house. So that's interesting there. This is not an original thought by me, but one thing that always spurs in me and I think it's a good way to wrap this up is are we getting to a point where you can just wager on everything in life or pick a side of an argument to make it some kind of financial instrument for everything in life?

(36:15) >> Yeah, I mean that's explicitly what poly market is pal's objective is. Anything that can have a binary yes no outcome can be put onto these exchanges. Obviously there has been utility. The reason that the commodities the CFTC exist is because there is utility. It is helpful to create this as a hedging mechanism and it helps to keep prices down and it helps to make these companies understand what their cost structures are going to be which can lead to increased profitability, increased job creation and there's a lot of potential utility that comes from that.

(36:45) >> Seeing utility trickle down to sports. Well, I think there are use cases where that can ways we've described, but I mean the financialization, there's a columnist for Bloomberg who writes a column I think it's Matt Levven. I always pronounce him either Leavine or he writes the money stuff column. One of his thesis is there's going to be the financialization of everything. And he has certainly has a perspective on the difference and pretty much the lack of difference between prediction markets and sports betting. But that is what is happening. And I think as Robin Hood, as Coinbase, particularly as equity trading has become much more popular and started at younger and younger ages and people know more about particularly equity trading, but just trading more generally, the financialization, productization of almost anything is the explicit goal. I mean, that's why it's called poly market. Poly literally means many, right? So many markets. So that's the idea is that you will be able to bet on almost everything. Again, at least in these markets that have a binary yes no decision or outcome, but whether that's a good thing or not, I think is obviously open to debate. And from your perspective, it seems like maybe not such a great thing.

(37:49) >> Yeah, it remains to be seen. I think the betting on sports, there's absolutely utility in that. I enjoyed wagering on sports in a traditional sense, and I'm interested in these markets as well. I don't know if I want to wager on the outcome of if my kids are going to have school canceled tomorrow or not. Something like that. Right. But one thing is for sure, this isn't going away. I have a feeling that you and I will be talking about this again. We'll have many guests that come on and talk about it. We've had previous guests that have talked about it as well. So, I think it's good for the two of us to get a lay of the land and get it out there to explain what it is to those listeners that wanted a cursory overview of it.

(38:23) But again, I think there's going to be plenty more of it in future episodes of the podcast for sure. Yeah, clearly this is the, like I said, the early endings are the start and we'll see what happens. And yeah, we might have to take a position on whether your kids are going to school if there's snow. >> I hope so, man. I'm tired of the snow days here, but more interesting. >> Yeah, there's lots to come on this and Adam has a great interview coming up next week and continuous season and I'm certain that topics like this will come up again and I think the guest last week, Adam Zimmerman, talking about sports and mixed use developments.

(38:55) There's so much great information about that and so look for more of those types of episodes coming this season. But I appreciate the time that was always good to see you and it's always good to have these conversations. >> Yeah, good to see you as well. Appreciate the time and yeah, looking forward for the upcoming Yes, there's there's some really good guests coming down. >> Thanks everybody. >> Thank you.