DraftKings signaled its intent to get into sports prediction markets this week, but deals by the NHL with Kalshi and Polymarket have changed the meta in the industry. Pet Berisha of Sporting Crypto helps me round up a wild week of news on this week’s podcast. Sports prediction markets face a new wave of fraud, from insider trading to syndicates and spoofed locations. Radar Protect helps platforms detect and stop risky activity in real time, using location and device signals across 300+ brands in finance, retail, QSR, and gaming. Flag multi-accounting, account sharing, identity theft, and more, without slowing down your user experience. Radar can help you fight fraud with less friction. Everything I wrote this week on prediction markets * The Event Horizon * Polymarket And Kalshi Reportedly Raising Again, At Valuations Over $10B * The Last 24 Hours Have Been A Sea Change For Prediction Markets * Kalshi Says It’s ‘Kind Of Addicting’ In Instagram Post * NYT Op-Ed: ‘Gambling. Investing. Gaming. There’s No Difference Anymore.’ * Kalshi Down For Some Users On Saturday: What We Know * The Closing Line * Episode 38: The State Of Prediction Markets After All The Chaos * News: DraftKings To Launch Prediction Market After Acquiring Railbird * WSJ Report: Kalshi, Polymarket Ink Licensing Deals With NHL Prediction markets news roundup * Polymarket CMO confirms POLY token and airdrop plans as prediction market boom gathers steam (The Block): “Polymarket Chief Marketing Officer Matthew Modabber has confirmed plans to launch a native POLY token and an accompanying airdrop as the prediction market gains growing investor interest amid a trading volume boom. Earlier this month, the company’s founder, Shayne Coplan, had teased a POLY token launch, The Block previously reported.” * “There will be a token, there will be an airdrop,” Modabber said during an interview on the Degenz Live podcast on Thursday. “We could have launched a token whenever we wanted, and it’s just how thorough we want to be about it. We want it to be a token with true utility, longevity, and to be around forever, right? That’s what we expect from ourselves, and that’s what I think everyone in the space expects from us.” * “However, Polymarket’s current focus is on its U.S. app launch, with Coplan confirming in September that the platform has been “given the green light to go live” in the country again after halting operations there in 2022 amid regulatory uncertainty.” * “Why rush a token if we need to prioritize the U.S. app, right?” Modabber said. “After the U.S. launch, there will be a focus on the token and getting that live and making sure that it’s well done.” * Here’s the clip talking about it on Twitter: * Predictions offering should be a positive for DraftKings, says Jefferies (TipRanks): “Jefferies reiterated a Buy rating and $51 price target on DraftKings (DKNG). With the purchase of Railbird and the creation of DraftKings Predictions, the company is taking a wholly owned approach to prediction markets, compared to Flutter’s (FLUT) joint venture with CME Group (CME), the analyst tells investors in a research note. The firm believes an offering in predictions is necessary for entry into OSB-illegal states, with limited upfront capital spend due to the limited economics, all of which should be a positive for the stock.” * Stifel also maintained a buy rating after the Railbird acquisition. * Is the Next FiveThirtyEight a Gambling Site? (Politico): “Still, the fallout of the incident was closely watched by another group: those hoping that the predictive power of betting platforms will soon transform politics and political media. In the past few years, both the number of such platforms and their number of users have skyrocketed. Two are taking off particularly rapidly: Polymarket and Kalshi. …” * “The rise of political betting is not just lucrative for the bettors and the platforms. Its advocates also hope that one day, it can replace the political prediction industry generally and remake the larger political media ecosystem. “[Traders are] incentivized with cold, hard cash to separate the emotion, to make a bet with their head rather than the heart,” said John A. Phillips, the CEO of the betting platform PredictIt. That means, the boosters argue, that they are more accurate than traditional polls and analyses of those polls.” * 💡My take: Politico referring to prediction markets as gambling sites in the headline is an interesting data point in the macro as political concerns could grow in the coming months. * Wealthy whales may be manipulating elections — thanks to prediction market technology (NY Post): “‘Markets are open to manipulation by a small number of deep-pocketed market participants.’” Dr. Don Moore, the Lorraine Tyson Mitchell Chair in Leadership and Communication at University of California, Berkeley, told me.” * “Betting markets present an opportunity to manipulate perception,” Moore, who specializes in decision making and politics, said. “One fear is if your candidate is way ahead in early results you don’t need to get to the poll, but there is a countervailing motivation that some benefits accrue to candidates who seem to be pulling ahead.” * 💡My take: I am a bit skeptical this is happening or will happen at scale at prediction markets for major elections. But in much smaller down-ballot elections with less liquidity, this seems feasible, at least for short periods of time. * You could bet on CZ getting pardoned by Trump at Polymarket: President Donald Trump pardoned Binance founder Changpeng Zhao on Friday, and some people made a lot of money on this. The market didn’t seem to catch onto this one too early, as it was still trading at less than a five percent chance right before the news dropped. * Is Your Broker Turning Into Your Bookie? Robinhood, DraftKings And More Face Off In Prediction Markets Boom (Investor’s Business Daily): These quotes stuck out to me: * “‘There are big differences between investing and, for example, opening an app where you can place a bet on Monday night’s football game or make other speculative wagers that have zero connection to the financial markets,’ said Rick Wurster, president and CEO of Charles Schwab (SCHW), an online broker not planning to offer wagering to investors. ‘For those who understand the risks, this can be a form of entertainment. But what’s concerning to me is we are seeing certain brokers equate investing with that type of speculative activity.’” * “My biggest concern is for younger investors, or those who are newer to investing,” Wurster said. “If their first experience is an app that mixes gambling and entertainment with investing, they may start to believe that being invested means there’s going to be an immediate payoff or return.” PayNearMe has developed the gaming industry’s first platform that is purpose-built to dramatically improve the end-to-end payment experience. It enables operators to manage the entire payment journey, for all major forms of payment and through the most popular channels. With PayNearMe, operators gain full control of the payment flow, promoting acquisition, retention and efficiency. One platform, one integration—built to solve gaming’s toughest payments problems. * Prediction markets have a bleak view of how long this government shutdown will last (Business Insider): “Three weeks on, the US government shutdown is showing no signs of ending, and if betting markets are right, it’ll easily end up being the longest in history.” * “On Thursday, odds on Polymarket showed that bettors think the latest shutdown will be the lengthiest on record. A wager with almost $2 million in volume shows 40% of bettors think it will last until November 16 or later. After that, 16% believe it will go until November 4-7, and 13% see it lasting until November 13-16.” * “Bets on Kalshi also show that users expect the shutdown to continue well into November. Betting volume has reached $16,383,303, and bettors see a 77% chance that it will exceed 35 days, lasting until November 15. Odds that it will last at least 40 days are currently at 56%.” * From Crypto To The SEC: Prediction Market Startups Look For Latest Edge (InGame): “Sportsbook giants, daily fantasy companies, and crypto exchanges are all taking steps toward the world of prediction markets, with some acquiring businesses approved to offer event contracts by the Commodity Futures Trading Commission (CFTC) while others partner with approved firms. But the prediction market boom has also led to a host of smaller startups that promise to disrupt the space. While they haven’t raised close to the hundreds of millions that Kalshi and Polymarket have received from venture capital and Wall Street, they have been raising funds and hope to one day challenge the top players. For many founders, the crypto ecosystem offers a way to create a prediction market outside of the CFTC-regulated world, though it remains to be seen whether they will face regulatory action if they accept U.S. customers without the commodity regulator’s approval. Meanwhile, at least one business is eyeing a different financial regulator for approval.” Thanks for reading Event Horizon! Subscribe for free to receive new posts and support my work. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit nexteventhorizon.substack.com
