Daybreak - Polymarket opened a bar near the White House. America is drinking the Kool-Aid

Episode Date: April 2, 2026

Polymarket and Kalshi are two New York-founded prediction market platforms now valued in the billions. While both let users bet real money on elections and political events in real time, it is Polymarket — the larger, offshore, largely unregulated one — where someone made nearly a million dollars predicting US military strikes on Iran before they happened. Together, the two platforms processed over $44 billion in bets last year.In this episode, host Snigdha Sharma explores how two New York startups turned opinion into a tradeable asset — and what happens when the people placing the biggest bets already know the answer.India banned online money gaming last year. These platforms are taking bets on our elections anyway.Tune in.Apply for The Ken's Event Manager role hereDaybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Picture a bar. It is in Washington, D.C., K Street to be specific, just three blocks away from the White House. It is a Friday evening in late March and you see wooden bar tops, leather seating, a live band playing jazz in the corner and monogrammed matchboxes on every table. And trays after trays of Pino Grigio moving through the crowds that include journalists, hill staffers and lobbyists. It is basically the kind of place where people come to be seen. and to network. It is all about power. And then you notice the walls. Every surface is covered in screens. Dozens and dozens of them each showing something different. Live social media feeds, financial data scrolling in columns, real-time tracking of flight movements across the Middle East where a war has been going on for three weeks now. And in the center of that room,

a giant growing sphere cycling through numbers, odds, and and market probabilities all updating in real time how money moves around the world. And wait, that's not it yet. On the long touchscreen that is built into the bar top, the kind that looks like it belongs in an actual war room, you can scroll through what people are currently putting their cash on. How many more weeks will the Iran war lost? Will a nuclear weapon be detonated anywhere in the world before this year is out? Will a specific Trump cabinet member be the first one to resign?

I'm not thinking Pete Hexeth, you are. Will Elon Musk win a particular court case? And then, at the very bottom of the scroll, will Jesus Christ return before Grand Theft Auto 6 comes out? Nearly $4 million were wagered on that one, by the way. At one point, the second coming was sitting at 48% odds, a number that would make most people pause before laughing it off. This bar that we are talking about is called the Situation Room,

and it opened three weeks after the Iran War started. It belongs to a company called Polymarket, one of the two prediction market platforms alongside its rival Kalshi that together processed over $40 billion in Betz last year alone. Both were founded in New York, both are now valued in the billions, and both built on one idea, that having an opinion about the world right now is something that you can trade like a stock.

Now, here is why we should be tracking this. As most of us will remember, India banned online money gaming last year, partly over addiction concerns and partly over how easily these platforms allowed manipulation. Now, if I were you right now, I would be thinking, then why are you still telling me this? Because if you log on to Polly Market right now and type India in the search bar, you will see active bets on the upcoming Indian State Assembly elections. There were also bets on the 2024 general election.

And when the results came out, when exit polls predicting 350 to 400 NDA seats turned out to be spectacularly wrong and the BJP fell short of a majority of its own, prediction markets had been pricing in uncertainty for weeks. While every Indian news channel was projecting a landslide, anonymous strangers on the internet were doing the opposite. They were hedging. They may not have called it perfectly, but they were asking the right question when our own pollsters were not. This is either a remarkable advertisement for the wisdom of the crowds or a sign of something far more unsettling about who actually has information and what they choose to do with it. In our post-truth world that is drowning in opinions,

somebody decided that the solution was to put a price on them. Whether that makes them more true or just more expensive is what we're going to find out today. Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nickda Sharma, and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Vargheese and I will come to you with one business story that is worth understanding and worth your time. Today is Friday, the 3rd of April. To understand how we ended up in a bar in Washington serving cocktails next to live war betting,

you have to go back further than Polly Market or Kalshi. You have to go back to a man named Robin Hansen. Hansen is an economist at George Mason University. And depending on who you ask, either the godfather of prediction markets or the man who spent three decades watching the world resist his business. best idea. Since 1988, he has been arguing that markets, not experts, are the most reliable way to surface the truth. And his theory is simple. When people put their own money on the line, they stop performing and start thinking. They have skin in the game. And the incentive to be

right overwhelms the incentive to sound smart. In 2001, the US government actually gave him a chance to prove it. Darpa, or the Pentagon's Blue Sky Research Arm, funded a project Hansen helped design called the policy analysis market. The plan was to build a prediction market focused on geopolitical events across eight Middle Eastern countries. The idea was that people with real intelligence, real expertise and real stakes could aggregate better forecast than any single analyst. It lasted two years. In July 2003, two U.S. senators held a press conference and declared the project a terror market. They said that it was a platform where people could profit from predicting assassinations and attacks.

The Secretary of Defense killed it the following morning. As Hansen later recalled, nobody from the Congress asked him a single question about whether the accusations were accurate. But it did not matter. because the optics were fatal. The project died, but the idea didn't. Fast forward to 2016. A young MIT student named Tariq Mansour is interning at Coleman Sachs, where a client asks his team to find a way to hedge against Brexit.

They built a complicated web of financial instruments, proxies, correlations, guesswork, and Mansour thinks, well, this is absurd. why can't they just bet on the event itself? Two years later, he and his classmate, Luana Lopez-Lara, co-founded Kalshi. The name means everything in Arabic, and they meant it literally. Mansour's pitch is almost philosophical. He told Bloomberg that prediction markets, and I'm quoting,

take debate from the realm of subjective emotion to the realm of objective math. And that is why it ends up being a lot. little bit more truthful. His co-founder Lara was more blunt. She called betting on your beliefs, a tax on bullshit. Meanwhile, in 2020, a 23-year-old NYU dropout named Shane Copland was building something familiar from what he has described his bathroom office. Copland was steeped in cryptoculture, drawn to the idea that decentralized anonymous

markets are more honest than institutions. He called this platform, Polymer. market. And his pitch, as he told it to Bloomberg, is that it is a guide for when you're thinking about the world, you're thinking about the government, and you're thinking about micro-trends and headwinds that could impact your life. Now, both companies spent the next few years fighting the regulators in the US. The Biden administration was, in Mansour's own words, as hostile as it gets. In fact, Kalshi even went ahead and sued the CFTC, which is the federal derivatives regulator and won the case in 2024. The FBI raided Copland's apartment in late

2024. And then Donald Trump won the election and everything changed. Trump Jr. joined both the platforms as advisor and investor. Federal hostility completely evaporated. Partnerships with CNN, CNBC and Dow Jones followed. The parent company of the New York Stock Exchange invested two billion dollars in Polymarket. Goldman Sachs CEO David Solomon said that he had a team looking into them. The day that $2 billion deal was announced, Copland posted on X and the post tells you everything about how he sees what he's built. He said, and I'm quoting, I knew we were entering an era where ways to find truth would matter more than ever. And Polymarket could play a critical role in that. After all, nothing is more valuable than the truth.

Bloomberg Business Week, which has tracked these platforms more closely than almost anyone, reported all of this in a March 26 cover story. And they noted the contradiction sitting at the heart of this. From a bathroom office and a Goldman intern's frustration, two companies had built what their founders genuinely believe is a truth machine for the modern world. And yet, Bloomberg noted, their relationship with truth is pretty complicated. The markets can be vulnerable to manipulation, insider trading and other shenanigans. In many cases, they even influence reality as much as they reflected.

Robert Hansen, the man whose idea started all of this, says that he is worried. Not about whether prediction markets will succeed, but about whether the world is ready for what happens when they do. Which brings us to the next part of the story where the money gets big and the bets get kind of dark. Stay tuned. Hey, it's Brady here. You might have heard my voice on one of our other podcasts, Zero Shot, but I do other things for the Ken too. One of those things is helping with our live events. The Ken has organized four of these so far on careers, wealth, health, and the way products are built in the age of AI.

And we have more slated for this year. Right now, we're looking for someone who can become our first events manager. I see this person as someone who will have a really big impact, simply because you will pull together so many functions. You'll work with me, our moderators, our growth team, and you'll tap into our editorial expertise as well. We already run events and discussions that go deep into any topic we choose, and you'll help us go even deep. by inviting great panelists to come on board, shape the content, and basically make every conversation unmissable. And I got to say I learn a lot of new things every time we host an event because the guests who join us are as high profile as they get. They're doers, their operators,

they're great investors, and they're all leaders who are highly respected in tech and business circles. If this sounds like something for you, check out the job description, the link is in the show notes or share that link with someone who you think would thrive with us. Thanks. Here is a question that is worth sitting with. If a prediction market works by aggregating what thousands of people genuinely believe will happen, what happens when some of those people don't actually have to believe anything? Because they already know.

Let's start with January this year. A brand new account appears on Polly Market created just days earlier. And it places four bets, all on the same theme, that Venezuelan president, Nicholas Maduro, will be removed from power imminently. The total stake is over $400,000. Hours later, US Special Forces actually descend on Maduro's compound. The account collects its winnings and goes quiet. Nobody knows who placed those bets.

And then, in February, the following month, In the weeks before the United States and Israel launched their strikes on Iran, a single anonymous trader placed dozens of bets on polymarket, all correctly predicting the timing and the nature of the US and Israeli military operations. That trader won 93% of their five-figure wagers on the unannounced military strikes. This is according to an analysis by blockchain analytics firm Bubble Maps. Total profit? nearly a million dollars. A separate group of six accounts, all also newly created, made another

$1.2 million collectively by betting that the US would strike Iran buying their positions just before the attack began. Federal prosecutors in Manhattan are now exploring whether these trades violated insider trading laws. Senators from both parties have introduced legislation to ban federal officials from trading on prediction markets at all. Polymarkets' response to all of this has been instructive. After each suspicious trade, the company pointed to the blockchain's transparency. They said anyone can see the activity after the fact, which means that bad actors get exposed quickly. What they didn't address, however, is the more uncomfortable fact.

Transparency after the fact means that the trades already. happened and the winnings are already gone. And the people on the other side of those bets, the people who lost, had no idea that they were actually playing against the house. There is also another deeper problem. Polymarket's own CEO Shane Coplin once told Axios that it was, and this is a direct quote, super cool that his platform creates a financial incentive for people to go and divulge information to the market, including potential insiders. In other words, The leak is a feature. It is not a bug. The market gets more accurate when insiders place bets.

The fact that this might involve classified military intelligence or the lives of soldiers or the stability of entire governments, these are the details that founders are still working through. This is where India comes back into the picture and why the story matters beyond America's borders. India's online money gaming was a different beast to what Polymarket and Kalshi are doing. We were not betting on elections or wars or central bank decisions. We were mostly betting on cricket and fantasy sports. And even that was enough to cause serious damage.

Families lost their savings. Young people fell into debt traps. The government's own press statement when the law was passed last year said families have lost their savings. Young people have fallen into addiction. In some heartbreaking cases, financial distress linked to these games has even led to suicides. So we banned it. And in hindsight, that ban may have been better time

than anyone realized at the time. Because what America is building right now is the next stage of exactly that impulse at a billion dollar scale with the critical difference though. They are not placing bets on whether their team wins on Saturday. They are placing bets on whether their country goes to war, whether their government falls or whether someone dies. and someone placing those bets may already know the answer.

And that is the experiment that America is running. And India, for now, we are watching from the outside. Except not entirely. Because if you go on polymarket right now, as I told you in search for India, you will find over 100 active markets. There are bets on upcoming State Assembly elections, on RBI policy decisions, and on whether there will be a military clash between India and China. Someone is placing those beds.

Are they all doing it from outside India alone? Who are these people? And what do they know? And what does it mean that random anonymous strangers are pricing the probability of events that will affect hundreds of millions of people with no accountability, no regulation and no address that we can write to?

This is the question that I will dig into in another episode of Daybreak. So, you see, prediction markets start as an economist selling in theory about how crowds aggregate truth. Robin Hansen spent three decades trying to convince the world that his idea was worth taking seriously. The world finally listened. The question now though, the one that nobody running these platforms wants to answer directly is whether the truth that they are aggregating belongs to a crowd at all or whether it belongs to whoever got there first.

Do let me know what you think of this episode and also if you know anything about prediction trading in India or if you know of people who are using these platforms somehow please do write to me at snigda at the ken.com with prediction trading in the subject line if you're worried about revealing your identity and want to stay anonymous, I promise that will be my first priority.

I would really like to know more about this. Thank you in advance. I'm looking forward to hearing from some of you at least. least. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium

podcasts. To subscribe, head to the ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague, Snitha Sharma, and edited by Radif CN.