บทถอดความฉบับเต็มของ Polymarket and Kalshi Have a Problem with Nepo Baby Insider Trading - The Story

that is that kind of a false dichotomy? 00:05:32 Speaker 2: Do you think no, I think I think you're onto something there. I mean my impression from speaking with users of both platforms is that the barrier to entry to trade on call she is much lower. 00:05:41 Speaker 3: You're trading with us dollars. 00:05:42 Speaker 2: I mean, it's it's easier to get started on CALSH and then polymarket is sort of the home of the quants. 00:05:48 Speaker 1: And final question before we get to your story that these both these companies make money by essentially charging a transaction fee on every wager. Do you have any sense of the betting volumes? 00:05:59 Speaker 2: Yeah, I mean they have skyrocketed in just over the past year. In fact, I'm going to actually consult a chart so I don't get it wrong. 00:06:06 Speaker 1: If that's okay, live self like checking. 00:06:13 Speaker 2: So we know that the betting volumes are are relatively equivalent between the two platforms. We know that in you know, the first few months of this year, poly marketing call She are approaching ten billion dollars in betting volume each month, especially around. 00:06:30 Speaker 3: The Super Bowl. 00:06:31 Speaker 1: Well, and they're taking like a ten ten basis points. So we don't know quite what that transaction fees are. 00:06:35 Speaker 2: The fee schedule is mathematical and changes based on how much you're trading. 00:06:42 Speaker 1: So yeah, Well, without further ado I think to truly understand Calci and poly market, which I know having read your story, we have to talk. 00:06:50 Speaker 4: About Jeff Bezos's step son. 00:06:53 Speaker 1: We have to talk about Mark Wohlberg's Daughta, and we have to talk about Dana white from the UFC's Daughta. This is just ay and wild story. But can you start with Evan white Cell? Who is he and what's his story? 00:07:06 Speaker 2: Evan white Cell is the stepson of Jeff Bezos. He is the son of Jeff Bezos's second wife, Laurence Sanchez, with Patrick Whitesell, the Hollywood producer, famous guy. So he's sort of the scion of two fantastically famous, wealthy families. And he's also a freshman at the University of Miami and a member of a fraternity there. 00:07:28 Speaker 4: And what happened next, Well. 00:07:31 Speaker 2: Sometime before the Super Bowl, members of this fraternity signal fa Epsilon became aware via Evan white Cell. People tell me that Jeff Bezos would not be attending the super Bowl, And to you and I, maybe that information matters very little. But two people who are familiar with calls, they knew that there was a market around whether. 00:07:54 Speaker 3: Jeff Bezos would be at the Super Bowl. 00:07:56 Speaker 2: And they knew that at the time that they learned this information, the odds were that Jeff Bezos would attend, that he would be there. And people recognized, you know, this information that they had via white Cell as possibly a lucrative trading opportunity, and very quickly that information spread not only throughout the fraternity, but throughout the school and even two students at other colleges. 00:08:19 Speaker 1: Now, does your reporting suggest that white Cel mentioned in passing oh, by the way, my stepdad's not going to the Super BOWLT or that he knew this was tradable information which he wants to share. 00:08:30 Speaker 4: With his friends. 00:08:31 Speaker 3: I don't think we have an answer to that. 00:08:32 Speaker 2: We do know that white Cell does not have a college account, he did not place trades on this himself, and the people I spoke to who were involved in the trades, they weren't certain whether white Cell was aware of this as a trading opportunity or that this is something that he mentioned incidentally. But suffice it to say somebody in the fraternity knew that this information could be monetized. 00:08:53 Speaker 4: He wasn't eager to comment on your story himself. No, I mean, what are we talking? 00:08:59 Speaker 1: He are we're talking about a few thousand dollars we're talking about I mean, when you mentioned a billion dollars a month in trading volume, what does the does Bezos attend the Super Bowl or not trade look like? 00:09:08 Speaker 2: So this was a market that ultimately had close to a million dollars in trading volume. The people who were involved in the trades that anywhere from fifty dollars to in one instance as much as ten thousand dollars university student people who heard about the trade via the university students via the fraternity members. 00:09:28 Speaker 1: Yeah, was it hard to track down these fraternity members and what did they and what did they tell you about how this came about? And were they worried when you called? 00:09:36 Speaker 2: Surprisingly, it was not difficult to track down people who were involved in this. So the chain of the chain of transmission for me actually was I called up a student at Tulane who had written an excellent article for his student newspaper about trading on Kalshi with his fraternity during the Super Bowl, and I I was curious about this topic. I called them up. I said, you know, great article, I'd love to learn a little bit more. And he was like, well, you know, The thing I didn't put in the article was that fraternity members at the University of Miami had this other trade around whether Jeff Bezos were a tend like, no kidding, I'd love to look into that more so, you know, it was really just a process of making phone calls. At that point when I called them up, I think, you know, there was a mixture of pride and also nervousness, because there's a real uncertainty, you know, not just among college students, but among a lot of people who trade on these markets about how rules around insider trading are going to be enforced. I mean, this is a real sort of gray area for a lot of folks. And I want to read you and actually, you know something that one of the people involved of these trades told. 00:10:53 Speaker 3: Me about this. 00:10:54 Speaker 2: He said, quote, we know this

shouldn't be allowed. People are like, is this insider information is regulated? You feel like you're doing something you're not supposed to. It feels like someone should stop you. And as soon as I heard that, I was like, I know there's a story here. 00:11:10 Speaker 4: Wow, And what's the answer to his question? 00:11:12 Speaker 1: Is this, like, are they popular breaking the law by betting on insider information? 00:11:16 Speaker 4: On in these platforms. 00:11:18 Speaker 2: Yeah, I mean I think I think a lot of this has yet to be decided. 00:11:23 Speaker 3: You know, there's so many gradations. 00:11:25 Speaker 2: Of insider information that these platforms have kind of exposed. Right, there's markets about everything, And is it insider information if you stand outside the Super Bowl stadium and listen to somebody rehearsing the national anthem so that you can bet on how long the national anthem is going to be? Is it insider information if you if you hear from your fraternity brother that their family member is not going to be at the Super Bowl. I mean, this is not the type of information that the SEC would necessarily find actionable. This is not material information, but this is information that's now monetizable. And the federal agency that's in charge of overseeing these prediction markets, in the past year, they've certainly taken a very hands off approach, and they've also scaled down their enforcement division significantly. So there's a real question of, well, is anybody looking at this stuff? 00:12:12 Speaker 1: Well, I want to come back to the insider trading issue, the regulation issue I want to point out now, which we'll come back to that. I think Donald Trump Junior is an advisor to Calshi and a board member and investor. 00:12:23 Speaker 4: At poly Market. 00:12:24 Speaker 3: That's right. 00:12:24 Speaker 1: Yeah, so some support for these platforms from within the administration for sure. 00:12:30 Speaker 2: Yeah, yeah, friends and high places, definitely. And the chair of the CFTC is also a big supporter of prediction markets. 00:12:36 Speaker 1: I want to, just before we get onto that to the nit secrety of regulation, talk a little bit more about NEPO babies, including Mark Wohlberg's daughter and Dana White's daughter, talk about how their stories relate to the Super Bowl and the betting. 00:12:49 Speaker 3: Yeah. 00:12:49 Speaker 2: So, in a lot of senses, this is real, like a tale of two cities, the best of times in the worst of times. So simultaneous to these Portunity members at the University of Miami effectively monetizing information that they you know, that they believed came from Evan Weitzel, there were also fratrinity members all around the country who were trading on what they believed was insider information that turned out to be false. And that was a rumor that started at fraternities and at Clemson University in South Carolina that Mark Wahlberg would be at the Super Bowl. 00:13:26 Speaker 3: Mark Wahlberg noted. 00:13:28 Speaker 2: Patriots fan reason to believe that he might be there, and his daughter, as it happens, attends Clemson and is quite involved in Greek life there. So you know, within days, a rumor that Mark Wahlberg would be in the super Bowl spread to fraternities throughout the country, group texts, and you know, I've seen some of these messages through posts on a corner of Twitter called the burner Verse, which is sort of populated by fraternity members who use pseudonymous accounts to post like stuff that you probably wouldn't want your name to be associated with. And then also on social media, so like on TikTok for instance. And this information spread so far that twenty four million was traded on whether Mark Wahlberg would be at the super Bowl, which was far and away the most money traded on Call She's markets on who would be attending, which celebrities would be attending, way more than whether Donald Trump would it in the super Bowl, way more than whether Jdvans would itten the super Bowl, in fact, more than any of the other celebrities combined. 00:14:30 Speaker 4: Do we believe this volume was driven because of Mark Wahlberg's daughters purported that the rumors that Mark Warlburg's daughter are given insider information or do we not know what? 00:14:41 Speaker 2: I have no reason to believe that Mark Wolberg's daughter was actually involved in this. After the end of the Super Bowl, she posted on TikTok something to the effect of, you know, any fraternity member who bet on Mark Wahlberg being at the Super Bowl is an idiot who deserves to wield all their money. 00:14:57 Speaker 4: And what about Dana White, the UFC CEO. 00:14:59 Speaker 2: So well, the UFC actually has a partnership with Polymarket. Dana White's daughter is also a student at the University of Miami. And in my conversations with some of the fraternity members who had bet on Jeff Bezos' attendance, you know, one of them brought up like, well, you know, the children of a lot of famous people go here, for instance, Dana White's daughter, maybe she knows something. And you know, they said they hadn't done anything with that yet. But we reached out to Dana White's team for comment, and what he told us was, quote, my daughter gambled one time and lost twenty dollars and was depressed for two months. And as far as what I do for a living, I don't even know if my daughter knows that I work for the fucking UFC. Pretty strong response, implying that his daughter is not probably going to be giving away any inside information anytime soon on UFC matches. 00:15:50 Speaker 1: Now, you know, one doesn't often feel too sorry for napper babies. But the idea of if you have a famous parent, or even a somewhat famous parent, any information you just close about your family can be traded upon online. I mean that that is a huge blow to the idea. I mean, we already live in a world with substantially reduced privacy, right with like everyone constantly recording on their phone, et

cetera, et cetera. But the idea that you'd have to be completely tight lipped about your movements of your family because people you thought your friends might be using it for insider information for trading. I mean, it's kind of a spooky world we're contemplating. 00:16:28 Speaker 3: Oh totally. 00:16:29 Speaker 2: I mean I had exactly the same thought, right, the idea that you know, just because I mentioned in passing where my family might be like people I thought I could trust might now be making money off that. I mean, it's it's almost I mean, it seems potentially like demeaning and cruel in a lot of senses. 00:16:49 Speaker 3: I mean, I do feel badly for these kids. 00:16:52 Speaker 4: It's dystopian. 00:17:03 Speaker 1: After the break, influencers, cash for parties, and the lure of a poly market beer pong set. 00:17:10 Speaker 4: Stay with us. We talk a lot on this show about protecting your data, especially in the age of AI, and how scary it can be when it's breached. And I want to tell you today about NordVPN, which really covers all the bases when it comes to privacy. I travel a lot, and I use Wi Fi while I'm flying all the time, and NordVPN makes me confident in no matter where I am in the world or the sky for that matter, my private details like bank information, passwords, and online identity is safe. And it's also possible to switch on virtual location, which allows you to save money by buying flights and hotels or subscriptions or even streaming soccer or football as I like to call it from other countries at a cheaper price. And NordVPN doesn't slow you down. It has super fast internet speed, no buffering or lagging while streaming. It is premium cybersecurity for the price of one cup of coffee per month. To get the best discount of your NordVPN plan, go to NordVPN dot com slash tech stuff. Our link will also give you four extra months on the two year plan and there's no risk with Nord's thirty day money back guarantee. The link is in the podcast episode description box. The story I think is also particularly interesting. 00:18:35 Speaker 1: It's not just about NEPO babies, but I guess there's a wider Polymarket and calshy frenzy. But it feels from your story like there's a specific campus thing going on as well. 00:18:46 Speaker 2: Yeah, I mean, what we found is that Cultry and Polymarket have made efforts to aim their marketing towards college students, and from a business standpoint, I would argue this makes a lot of sense in a lot of states. You know, not every state allows gambling. Not every state allows online gambling. In many of the states that do, it's restricted to people who are over twenty one. But because call She and Polymarket have argued they're a different kind of platform that's not gambling, anybody who's over eighteen can use them, and that kind of means that there's a slice, a three year slice between eighteen and twenty one where you can legally use call She and poly market, but maybe you might be restricted

from betting on DraftKings or FanDuel. And that means that call She and polymarket have possibly an incentive to try to attract younger users to their platforms. And what we found is that the way that they're positioning their marketing suggests that that's exactly what they're doing. I mean, call She has worked with a large number of college age influencers to promote its product on social media, and Polymarket has gone the route of working directly with student groups to try to sign up users on college campuses. 00:19:55 Speaker 1: So I remember when I was a student, Red Bull would come and give kinds of free red Bull. What's the equivalent in the error of Polymarket. 00:20:02 Speaker 2: Polymarket has been working with fraternities in particular, but student groups sort of cross the spectrum, saying if you are able to sign up users, we will pay you for every user that you sign up, and you can use that money to throw wild parties. 00:20:18 Speaker 3: Wow. 00:20:19 Speaker 2: Yeah, they're handing out Polymarket branded beer pong sets. They're sponsoring student competitions. Call She, I should say, did initially roll out sort of a similar sounding program and then decided to move in a different direction. But call She was sponsoring briefly some campus student groups as well, though Polymarket appears to be doing much more so in. 00:20:39 Speaker 4: That vein and I'm one about influence in marketing. 00:20:41 Speaker 2: So both companies have signed up college age students to market their products on TikTok and Instagram. Call She has filmed some advertisements directly on college campuses. I'm thinking of advertisements that were filmed on the Utah Valley University campus. 00:20:57 Speaker 3: For instance. 00:20:59 Speaker 2: And they're sort of positioning their platforms as ways to earn fun money or you know, ways to help get to a concert on the weekend or buy a coffee, or you know, ways to monetize things that you might know but didn't know. Potentially we're worth money and create an income stream for yourself as a student. 00:21:21 Speaker 4: And I think goes even younger than college students. Right. 00:21:24 Speaker 1: Wasn't there some influencer in your story who was offered a gig who was fifteen? 00:21:29 Speaker 2: Yeah, there was a video game streamer. He's based in Europe, but he was approached initially by call She. They signed him up as an affiliate marketer on Twitter, and then I've seen messages indicating that he was very uprom with them about being under eighteen. You know, he's not even allowed to trade on call She, and they said that's fine. And then sort of a week later, he gets a message from the call She employee that he'd been working with, saying that quote, yo, brother, legal team confirmed that we can't work with minors right now. Kind of sad tbh. 00:22:03 Speaker 4: And you couldn't make it up. 00:22:05 Speaker 3: No, yeah, you know this, yeah, China sayd TV. 00:22:11 Speaker 2: So this user also showed me messages confirming that Polymarket had also reached out to him and attempted to recruit him as as an affiliate on Twitter. 00:22:18 Speaker 1: Interesting timing for your story, because a couple of Bellwether social media trials where Meta and YouTube were found liable for harm caused the teenage users, And of course what was most damning I think was the discovery and the internal communications of the executives. You know, it's almost like in real time, just we're seeing a new form of social interaction explicitly targeted towards you know, minors or at least under twenty ones, which has presumably enormous potential to cause harm, taking off at exactly the same time that these Bellweather trials are happening on the social media age, and it's interesting and kind of chilling irony. 00:22:57 Speaker 2: Yeah, I mean, I think the platforms were responds to that is, you know, that they don't believe that they cause harm. I'm referring here to prediction markets. When my colleagues spoke with Calshi's former head of operations, who began trading on prediction markets precursors to cash and polymarket when he was a teen, and he mentioned that, you know, it was a formative experience for him, and he also used it in part to help fund his college experience. I've spoken with young people college students who find the ability to bet on their convictions to be gratifying, and they seem to be making a fair amount of money doing so. 00:23:35 Speaker 3: Yeah. 00:23:35 Speaker 1: I mean, of course, the other thing which is worth acknowledging is that campuses are not just for partying and boozing. Right, There are also places where, like the marketplace of ideas and debate, and the idea of being right is like particularly important. There is a clearly like intellectual appeal which I can imagine for like certain college students is very different from betting. 00:23:55 Speaker 2: Yeah, yeah, totally I mean, even the college students who are betting on sports, you know, some of them have to developed quite sophisticated quantitative trading strategies, just like the most sophisticated sports betters do. 00:24:05 Speaker 1: Is there any pushback from universities, from parents, from student groups, I mean, is there is there a resistance brewing or is it just so emergent that that the kind of the response has not yet been marshaled. 00:24:18 Speaker 2: I would say it's it's the latter, you know. I think conversations that I've had with parents and educators suggest that they have becoming They're becoming increasingly aware of the amount of time and energy that students might be spending on prediction markets. But it's really so nascent still that it's not something that any kind of formal strategy has evolved to address. 00:24:42 Speaker 1: Efforts of regulation have begun, but they're quite narrow. There's largely on sports betting and a little bit on government inside of trading. 00:24:53 Speaker 3: Yeah. 00:24:53 Speaker 2: I would actually flip that to say

it's focused largely on government insider trading, and maybe a little bit on sports betting. But yeah, I mean, you know that the efforts at regulation, it seems like every day now a new congress person that's coming out with some prediction market related bill. I mean, I think it last count there were like over a dozen of. 00:25:13 Speaker 4: A dozen prediction market bills. 00:25:15 Speaker 2: Yeah, yeah, yes, many of them are Bi Patterson. I don't think any of them address the marketing to young people. I did, I believe earlier today here Alexandria A Casio Cortez. 00:25:27 Speaker 3: Discussing that in the context of prediction markets. 00:25:29 Speaker 2: But there's no legislation that's been introduced that specifically is directed at that. 00:25:33 Speaker 4: Can you take them one by one? 00:25:34 Speaker 1: I mean, let's start actually with the sports betting and then go on to the government inside of trading in the sports betting. What wider regulators and congress people and senators care particularly about sports betting, is this lobbying? 00:25:45 Speaker 4: Is it something else? What's what's going on here? 00:25:47 Speaker 2: Well, I should say, first of all, just to give us a little bit of context on this, the vast majority of volume on calls she and Polymarket is sports, easily over seventy percent at least on Kalshi is traded on sports related contracts. So you know, detractors have said College and Polymarket they market themselves as truth machines. They market themselves as ways to learn more about global affairs and the news, but really they are just a sports book with a different wrapper. And sports books politically very powerful. Something like thirty states have legalized online sports betting and in return, the states received taxes from those platforms. If there is now a new way of betting on sports that does not involve those platforms paying taxes to states, I mean, I think it's quite clear why states would be opposed to that. The gambling lobby also, you know, quite powerful, and they see prediction markets as a big threat to their livelihood. 00:26:44 Speaker 1: That makes sense. And now let's talk about government inside training. I mentioned at the beginning and the introduction the initial strikes in Iran, the removal of Madura from Venezuela, and then the exact date of the recent war in Iran beginning February twenty eighth. 00:26:58 Speaker 4: I mean, this is pretty wild. Do we have any sense of like, what's happening here is as obvious as it looks from the outside. 00:27:06 Speaker 2: Yeah, I mean there are people who spend their entire professional lives trying to track down the people behind these highly opportune bets. One person in Israel, part of the Israeli military was arrested by Israeli forces for inseder trading on Polymarket related to our moon strikes. There have not been any arrests in the US related to putative insider trading on prediction markets, but it's clear that this is a topic that is generating a lot of concern among the public and among lawmakers. 00:27:38 Speaker 4: You mentioned your story that six suspected insiders made one point two million dollars wag during that the US would strike Iran last month. 00:27:46 Speaker 2: Yeah, so that's according to a crypto analytics sperm called bubble Maps. And actually since we published that story, they've updated that analysis and they found some other wallet that they believed to be linked to those same potential insiders who have made similar trades, also really to the Iran war and the possibility to cease fire, also involving large sums of money. 00:28:06 Speaker 1: It's pretty pretty nuts, to be honest. And where does Donald Trump Junior fit him all all this? Obviously the Trump family, you know, through the Atlantic City casino and stuff, they have a long history of interaction with gambling platforms. Do you know, like why Donald Trump Junior got interested in both Calshi and Polymarket and whether he may be part of some kind of internal lobbying effort to protect these platforms, but given he's an investor and an advisor to each of them, so. 00:28:32 Speaker 2: I don't have a lot of visibility into Donald Trump Junior's involvement with these two platforms. I would add to what you have just said that he is also launching his own prediction market in partnership with Crypto dot com on the truth social platforms called truth Predict. So he is exposed to prediction markets now in you know, as many as three different ways. 00:28:51 Speaker 1: Gosh, it's like, I mean, it's hard to imagine being being an advisor and investor and a founder of three different companies doing the same thing. 00:28:59 Speaker 2: But I guess, yeah, I mean, I guess don't put your eggs in one basket. 00:29:05 Speaker 3: One way of looking at it. 00:29:06 Speaker 1: That's interesting, talk a little bit about what these platforms are doing to woo regulators and opinion makers in the US. I mean, the media partnership is interesting, right, like CNN, CNBC, Dow Jones, Like, do you have any do your reporting kind of reveal the strategy behind these partnerships or is that the media companies themselves being like this is addictive information, we want it. 00:29:32 Speaker 2: I don't have any specific reporting that would speak to the platform's strategy behind the partnerships with media groups. I would say, you know, in general, both Calcium Polymarket have sought to strike partnership arrangements with high profile national organizations. The MLB was a partnership that Polymarket just struck. Polymarket can use the official Major League Baseball logo and other types of branding materials on its site when it's ADVERTI bets on Baseball games. UFC I talked about national hockey leagues and other partnerships. So both platforms are sort of racing to scoop up these partnerships and sort of try to acquire mind share across the American public as they're seeking to normalize the idea of betting on anything. 00:30:22 Speaker 1: So just a clothes I have to ask you if you have any predictions on where the story goes next. 00:30:28 Speaker 2: I am most interested in watching the relationship between robin Hood and Call She. Call She currently gets about a third of its volume from its partnership with robin Hood. 00:30:37 Speaker 4: This is people betting on outcomes through robin Hood. 00:30:40 Speaker 3: Rather Yeah, that's right, that's right. 00:30:43 Speaker 2: Robinhood, though recently acquired its own prediction market and it's working with a call she partner as Sisquehan International Group to launch that, and so I'm extremely curious to see. 00:30:56 Speaker 3: Where that's going to go. 00:30:57 Speaker 4: Catherine Long, thank you, thanks so much for having me for tech stuff. I'm as Volosha. 00:31:13 Speaker 1: This episode was produced by Eliza Dennis and Melissa Slaughter. It was executive produced by me Julia Nutter and Kate Osborne for Kaleidoscope and Katrina Norvel for iHeart Podcasts. The engineer is Kathleen Conti from CDM Studios. Jack Insley makes this episode and Kyle Murdoch wrote up theme song and please also do rate and review the podcast wherever you listen