Tech Won't Save Us - Prediction Markets Want to Financialize Everything w/ Jathan Sadowski

Episode Date: May 21, 2026

Polymarket and Kalshi are everywhere. But what are they doing to society? Jathan Sadowski joins Paris Marx to discuss the rise of prediction markets and their negative social effects as they push the global economy closer toward the financialization of everything. Jathan Sadowski is an Associate Professor at Monash University. He is the author of The Mechanic and the Luddite and co-hosts This Machine Kills. Tech Won’t Save Us offers a critical perspective on tech, its worldview, and wider society with the goal of inspiring people to demand better tech and a better world. Support the show on Patreon. The podcast is made in partnership with The Nation. Production is by Kyla Hewson. Also mentioned in this episode: Jathan wrote about Kalshi trying to bring about the financialization of everything in Fast Company. The NYT reported on the use of classified information by a US soldier to place a bet on the capture of Maduro. Wired just reported on how the US is using AI to spot insider trading. Polymarket users sent death threats to a reporter.

There's this real ideological aspect that is trying to justify the prediction market as more than just a degenerate way to gamble, but as a way to filter out the noise and figure out what the ground truth is and feel smarter for having gone to Kalshi to get all of your opinions and predictions about the world. Hello and welcome to Tech Won't Save Us, made in partnership with The Nation magazine. I'm your host, Paris Marks, and this week my guest is Jathan Sadowski. Jathan is an associate professor at Monash University, the author of The Mechanic and the Luddite, and a co-host of this machine kills. He wrote an article recently about prediction markets like Calci and Polly Market and how they are affecting the society that we live in.

And I feel like as we hear more and more about these companies and this type of betting or gambling, that it was a good opportunity to have Jathan on the show to explore the wider consequences of this, right? You know, we hear the stories about insider trading being done on these platforms, you know, people who have information and then trade on it and, you know, make money from major world events in a way that is becoming increasingly concerning, right? But we also see these platforms increasingly integrated into the news and entertainment shows and various other media that we encounter. And so what happens when we're seeing this everywhere? What happens when everything is something that can be bet on, that can be gambled on, where there's an expectation

that you could be turning a profit off of who wins an Oscar, or whether, you know, the United States invades a country, or who wins a certain election, or any of these things, right? You know, obviously there was some, like, black market or side betting on many of these things in the past, but it wasn't so formalized and institutionalized and really promoted as this thing that is regular. This all comes about since the legalization of these practices in recent years, which has made sports betting explode, but now we see this kind of broader betting throughout the economy, throughout the society. And that is obviously having impacts, right? It's having impacts on the way that people see the world. It's having impacts on the way that people see one another. And obviously,

there are a lot of companies making a lot of money off of this. But for that to happen, a lot of people also need to be losing a lot of money, and that has broader social consequences. And so I wanted to talk to Jathan about all of this, to understand what is really happening, what the impacts of these platforms are, where they actually come from, and whether there are opportunities to rein them in. And one of the things that he talks about very clearly is how we are increasingly seeing the financialization of virtually everything, whether it is through the cryptocurrency markets, which obviously took off, in a major way in the early years of the pandemic. They were around long before that. But obviously sports betting is something that has become very common. Now these prediction

markets, it feels like everything is something that you can now make money on, place a bet on, and that has real consequences. And so I wanted to talk to Jathan to understand those. And I think he gives us a great analysis of what is going on here and how it is really detrimental to a healthy society to allow these things to continue, to allow this practice to continue to entrench itself, and to allow everything to be financialized in the way that things are going right now. So it's a great conversation, and I think you're really going to enjoy it. And of course, if you do, make sure to leave a five-star review on your podcast platform of choice. You can share the show on social media or with any friends or colleagues who you think

would learn from it. And if you do want to support the work, that goes into making tech won't save us every single week so we can keep having these critical, in-depth conversations about the tech industry, how it affects the world, our politics, and so much else. You can join supporters like Lily in Toronto and Gia in Sydney by going to patreon.com slash TechWon't Save Us, where you can become a supporter as well. Thanks so much and enjoy this week's conversation.

Jathan, welcome back to Tech Won't Save Us. Always a pleasure to be here. I always love having you on the show. Of course, you know, big fan of TMK, your podcast with Ed, but you also do a bunch of fantastic work beyond that, you know, as an academic and just looking into the many ways that this tech industry is affecting our lives and our world. And I feel like in, you know,

the past year, people have been hearing a lot about these prediction markets, you know, the polymarkets, the calches, these platforms that seem to arise, you know, out of nowhere all of a sudden and then take over and now we're hearing about them all the time. I wanted to, you know, dig into all of that. But maybe you can start us off by telling us what prediction markets actually are. Like, what are these things that we're talking about all the time now? Yeah, for sure. I mean, they're kind of a weird and counterintuitive thing to exist at all, right? I mean, even the prediction aspect of calling it a prediction market is very, you know, we'll dig deeper into that. But that is itself a misleading name for what they are. I mean, that really comes out of like neoclassical economics, kind of efficient market theory, a lot of the libertarian obsession with like collective wisdom and wisdom of the crowds. And so like that's where a lot of the kind of ideology around prediction markets and some of the structures of practice and, you know, this idea of prediction markets have been around for a

very long time. You know, we now know about it because of Kalshi, because of Pali market, right? Those are the two main big platforms. But this idea of prediction markets has been around since at least the 90s, you know, even earlier than that, but really kind of formalized in the, in the, in the 90s, the early 2000s, as a way of trying to take advantage of this idea that there's a, you know, there's a lot of dispersed and diffused information out there and it's not well aggregated. You know, there's asymmetries of what people know, what people are sharing. And the idea is that markets provide an incentive for people to kind of put their money where their information is, right? So rather than keeping all this information in your mind that might be useful for predicting the outcome of world events or of market trends, you know, for a company, right, you create a kind of market system where people can essentially buy contracts on whether an event will happen or not or the outcome of some event.

And so, like, you know, this idea of kind of prediction markets, right, has been around for about 40 years. but there's a lot of instances of these smaller internal markets. So like Google, for example, has run multiple different internal prediction markets for employees to make wagers on events. And these could be things around, you know, placing bets on product release dates or maybe placing bets on what their competitors might be doing as a way to aggregate information within Google. Lots of companies have done this.

I mean, DARPA, the Pentagon's advanced research agency, experimented with what they called future map or future markets applied to prediction, which they started developing it in May of 2001 as a way for anonymous speculators to take out futures contracts on the likelihood of events like assassinations, coups, terrorist attacks, conflict in the Middle East, And, you know, I don't think that they successfully predicted 9-11, only a handful of months later.

But, you know, once it was publicized that DARPA was essentially letting people place bets on assassinations of world leaders and things like that, you know, it was publicized in 2003 that this prediction market existed. It faced really swift and public backlash with senators like Ron Wyden. leading the charge and calling it a future map, quote, a fantasy league terror game. And so the idea here of like prediction markets as somehow degenerate or immoral has been around for about as long as the idea of prediction markets has been around. But now it's really broken into the mainstream because of these platforms like Kalshi and Polly Markets.

So it's like they didn't, they didn't originate the idea of placing bets on the outcomes of events, but what they did is they scaled the idea to, in an unprecedented way, where now we can all do that about essentially anything and everything. And now I'm happy to get more into the kind of details around how it works, around these event contracts and things like that. But let me know how deep you want to go into the, the mechanics of these markets.

Totally. No, I think that gives us a great kind of like historical setup to where this comes from, right? And I do want to dig into the types of things that you're talking about. But even hearing you say that and talking about the history and talking about how, you know, it has been used in tech companies and in the military and in these other, you know, kind of organizations, it, you know, really stands out to me that there's obviously a commercial push for something like this. There's obviously an opportunity to make money by allowing the betting or to create these contracts on these different markets and you know, you're betting on real world events or things that might happen or what have you. But then there's also this ideological piece as well that assumes that, you know, this is a way that we should organize society, that this is something that is positive, that it comes out of this kind of certain political way of seeing the world that is probably not reflective of how everybody. sees the world, but it's certainly how some people see the world.

Yeah, for sure. And I think the ideological aspect of this, that real, at the core of prediction markets is a pretty extreme libertarian ideology that markets are the single best way to aggregate information and make decisions in the world, right? Because when you hear the proponents of prediction markets, when you hear the C.E. CEOs of, you know, Polly Market, Shane Copland, or the co-CEO of Kalshi, Terak, Mansauer, talk about what they are trying to do with this. It is, you know, it's the bombastic kind of claims that we expect from tech CEOs, but it's the bombastic claims that are really based in a hyper-libertarian, a radical market view. And so, for example,

I think one of the reasons why Kalshi in particular came to a lot of people's minds and people started writing about it, including me, right? I wrote a piece for Fast Company about prediction markets. It was because late last year at the Citadel Securities's Future of Global Markets Conference. So, you know, one of these kinds of Wall Street events where the the masters of the universe can all gather in one room and tell each other how great they are and learn about what they should be investing in in the coming fiscal year, right? And on stage there, the Terek Mansour was talking about prediction markets, talking about Kalshi, talking about the rise of this new kind of way of doing financialization

and speculative returns. And the moderator, Molly O'Shea, asked him, quote, Terik, you've mentioned multiple times that you think prediction markets will be bigger than the stock market. What is it going to take to become a $1 trillion asset class? And in response, Mansour said, quote, you know, Kalshi is everything in Arabic. The long-term vision is to financialize everything and create a tradable asset out of any difference in opinion. And I think if you do build a general purpose exchange that can resolve differences of opinion on anything, like the total available market is quite massive. So it was that quote there, this idea that the vision is to financialize everything and create a tradable asset out of any difference in opinion.

That obviously became, you know, a very headline-grabbing claim, but it speaks to, I mean, yes, it's absolutely absurd, right? it's an absurd thing to say it all. But it speaks to the ideology underpinning this, right? That everything not only should be subjected to or available to financialization, but everything should be financialized, right? And if it's not financialized, then you're leaving money on the table. Those are potential assets that are not brought into existence, right? And so it's that ideology there, but also the kind of grand ambitions here, because we have to also understand that Kalshi, Polymarket, last year was a boom year for them, right?

Like they attracted huge amounts of venture capital from our favorites like Indrecent Horowitz and others and saw their valuations skyrocket, right? their valuations, right? Polymarket went from, I think, a $1 billion valuation to a $9 billion valuation. Cali went from like one or two billion at the beginning of the year to $11 billion by the end of the year. These are huge jumps. And those are coming off the back of Cali alone went through three venture capital rounds last year. And the latest round was a $1 billion VC raise. Right. And so, but with that, as we, as good tech won't save us, listeners know, once venture capital gets into the game, the imperative to scale quickly to dominate everything, to talk about, you know, trillion dollar asset classes and total market, you know, total available market and financializing every difference of opinion. Right. This is, this is what happens when the speculative capital of VC gets into these kinds of. platforms. They rapidly explode and they set their sights on world domination. I don't think that that's actually what's going to happen, but I think falling even somewhat short of that goal is still a

terrible thing and something that we should be paying very close attention to. Totally. And it feels like as they have taken off, we've been seeing them discussed in so many different areas, right? It's like anytime something happens, part of the discussion becomes what happened on these markets or did someone trade potentially inappropriately on these markets? And it just feels like they become such a central part of the conversation, you know, I think for the worse. And it's such that we see a, you know, substact kind of integrating polymarket into their platform. We see CNN putting Kalshi on their platform. We saw Google News integrate polymarket into their platform and then kind of roll up. back after they got criticism.

Like, what do you make of how quickly this has just seemingly gone everywhere? Yeah. I mean, it is really crazy, I think, and we can't understate how wild it is that these formal partnerships are really taking off, right? I mean, it did really strike me that, like, when CNN, you know, last December signed a deal with Kalshi to bring it, quote, real-time probability data. into the network's TV broadcast and digital platforms. You know, the idea here that, like,

if you thought gambling was ruining the integrity of sports, right? And we have to also understand that all of the reason why these platforms exist, the reason why they've taken off as mainstream consumer products, all comes down to a 2018 Supreme Court case, which legalized sports betting in the United States, right? So up until 2018, sports betting was illegal, right? There was a federal law that barred betting on football, basketball, baseball, and other sports in pretty much all states. And that meant that you had to go to bookies, right?

You had to kind of do it in these black markets. You had to go to Vegas, you know. And so it really limited the ability of this kind of betting to explode. But when that Supreme Court in case in 2018 struck that down, And it's, you know, Kalshi was founded in 2018, right? So it's like immediately you see this influx of, you know, of sports betting, right? Fan duel, draft kings, right? You know, ESPN announced that it's going to integrate draft kings into all of its platforms

after ESPN tried its own hand with ESPN bet. And it was like, well, you know, we're just going to have draft kings, right? So already you start having this kind of like, how is this a, the integrity of sports, right? And there's already been number of cases of, you know, insider trading, of, you know, players, you know, affecting their performance in games or the outcomes of games. You know, and so there's already been really high-profile cases

of this very clearly and predictably, you know, causing lots of corruption in sports. And even on the sports side of things like the athletes getting criticism and even threats from fans if they kind of play in a way that causes them to lose money, right, by making these bets. Yeah, absolutely, absolutely. Because what happens when you're no longer just a rabid fan, but you're also a rabid fan who has a lot of money on the line because you've, not just because you've bet on the outcome

of a game, but because you've placed this insanely complex multi-parted parlay, right? And that's what you see here as well is this really rapid intensification of betting. All of this is tied into prediction markets because prediction markets are fundamentally sports betting platforms that also just do other stuff.

But I think this intensification of gambling through the platforms is a really key aspect. So like with a parlay, right? You're not just betting on one event, the outcome of game, which sports team wins the game, right? But you're betting on specific events in the game. Is this player going to get within this range of rebounds? You know, are they going to, you know, are they going to pass the ball this number of times, right? Like, it becomes this thing where it's like any kind of metric

becomes a point of betting, right? And you create metrics for the purpose of betting on them. And And the way this is becoming integrated into ESPN means that when you're watching the game, you're getting like live updates on the outcomes of potential parlays or potential betting events. You're getting, you know, expert commentators talking about the betting outcomes and probability events within games, right? It is completely changing the nature of the thing itself. It's not just an added data stream or an added entertainment product to the game. It is changing the game. And so what happens when you start seeing these prediction markets integrated into things that are,

you know, arguably more important than sports, right? When CNN starts, you know, giving you live odds on the veracity of what its anchors are reporting on, right? Or as we've seen as well, when, you know, a number of. cases here where people in the government, you know, are using confidential information to place bets and make huge amounts of profit. I mean, literally right before we start reporting, or reporting, recording, the New York Times reported a story that they discovered who made the $400,000 bet on the outcome of Maduro being captured, right? And this was a huge headline, you know, the U.S. invades in Venezuela, captures Nicholas Maduro, and hours before this happened,

someone went on to a prediction, went on the polymarket, and placed a huge bet about the outcome of this, and ended up making $400,000. And everyone's saying, well, obviously, this is insider trading, right? Because, like, no one knew this is going to happen except for people in the actual operation. And then New York Times reported just before we started the episode that they discovered it was a U.S. Army soldier, a master sergeant who was stationed at Fort Bragg, who made the bet using classified government information, and then attempted to obscure the source of, you know, obscure who he was on these platforms and the source of his, you know, sudden $400,000. windfall. And, you know, they found all that out, right? But this is like, this is coming off the back of, you know, the White House has recently issued warnings to staff against insider trading because there's all these suspicious trades happening on prediction markets, on oil futures, on stocks, right? That they're all so clearly based on classified information from within the government.

And I found it really interesting that a rare moment where the Trump TMK diagram overlaps, where, so I'm going to quote here from the New York Times where they say, quote, asked about concerns that federal employees may be engaging in insider trading on the war in Iran through prediction markets. President Trump said on Thursday that, quote, the whole world, unfortunately, has become somewhat of a casino. And you know what? You got to give it. You got to hand it to them. This is what we've been saying on TMK for a long time. We've done a number of episodes talking about what we're calling the world casino or the great degeneracy. It is undeniable that the world has become a casino now because these speculative logics of gambling. Importantly, they're not speculation in the way that we think of like hedge fund managers and Wall Street. lagoons doing speculation as professionals.

It's gambling. It's speculation in the way that you think of someone wearing flip-flops and a Hawaiian t-shirt walks into MGM and speculates, right? It's just gambling. And that is what, you know, that is like the underlying logic now running through so much of the economy, so much of politics, so much of society. Is this kind of rebounding to speculation as the best and only way forward.

Dude, there's so much I can respond to in there. But just to pick up on what you said about the great degeneracy, it's very funny to me to think about us talking about degeneracy in this moment, where at the same time as like seeing everything happening with the Trump administration and the tech industry and the way that they're kind of changing society, we also see all these people like, it feels like more interested in the Catholic Church because the Pope is like a critic of AI and is very outspoken on that. It's like, what kind of weird moment are we in right now?

I know. It's a decline of morals for sure. I call it the great degeneracy as an allusion to the Great Depression because I think these things are very much tied into each other, right? Because like, I think like one of the reasons why we see this great degeneracy and really this has been happening for the last six years. 2020, I think, was the real kickoff of the great degeneracy. Not coincidentally, it was caused by, you know, catalyzed by COVID, right? Where you end up with this society where the bottom falls out for a lot of people, right? Like, you know, their economic capabilities are tightly constrained.

Their horizons are shortened, right? For a lot of people, their lives become a lot worse and have not really become meaningfully better. in the next six years, right? So you end up with this great, you know, a great depression, a kind of a long depression, right? It's an economic recession coupled with a mental health crisis, coupled with unemployment crisis, coupled with all of these things that has, you know, that have ultimately made people feel like they have less ability to get ahead, less possibilities for upward mobility. they're having to work harder to get less. And we've seen this happen across a number of different ways, right? Like, you know, I think this is linked to what, you know,

Cory Doctor calls in shittification, right? Because we see how, you know, platforms and companies have so clearly decided that consumers are able to be exploited from and extracted from a lot more readily. Like, you know, things don't have to be good, right? because you don't have any other choice, you know? And so what happens when we see recessions is that we always see a corresponding rise of vices, right? People, you know, deaths of despair, right? People use drugs and alcohol a lot more. There's mental health crises. People have, you know, depression and

anxiety. But there's also a rise in vices, right? People turn to gambling. and violence and other kinds of things as ways to, if not get ahead, then at least deal with the fact that they don't really feel like they have any other horizons or possibilities. Or because they, you know, and I think a lot of the turn to gambling is because people are seeing this as the only way forward, right? It's like the only way that I can, you know, feel like I can pay my rent for the next week is to turn my current rent, money into three times rent money, right? It's this idea that the only way to get out of the K-shaped economy, right? So-called because there's vast divergences and a small group are going

rapidly up, while a large group are going rapidly down. And so they're diverging. And the only way it seems like to get out of the K-shaped economy is to gamble your way out of it. And we saw this in COVID in 2020 with the rise of Robinhood, right? So, you know, stock trading, you know, from your phone, people are unemployed, they're sitting around, they can't leave their house, they don't really have any opportunities to make money any other way. And so people start getting on Robin Hood, and they become addicted to it, and it becomes a big story, right? And you have meme stocks. But importantly, you also have people making incredibly complex options, on their couch, things that they have no idea what's actually going on. These are trades that

would be normally only available, accessible, knowable to professionals on Wall Street. Now you can do it from your phone and lose money in ways that you never knew was possible, right? And so you have that and you have the corresponding rise of apps like Fandul and Draft Kings with that 2018 court case, which 2020 hits is just like perfect, just enough time for these platforms to get up and running and then COVID hits and now everyone's doing sports betting, right? And so what happens with the prediction markets is you have Silicon Valley saying, well, we see,

you know, we're kind of trying to tie together Las Vegas and Wall Street here. If Fandals is Vegas and Robin Hood is Wall Street, well, Kalshi is stepping in and saying, well, we can do this but for everything, right? And so people start getting on to prediction markets. The fact that

like this recession that we're in, this, you know, is just continuing to extend further and further out, right? Nothing seems like it's going to get better in any foreseeable future. I think it has just caused this real intensification of

speculation, of gambling, of vices, of people turning to these things as ways of making quick profits. With that as well comes the corresponding investment into these platforms, right? It's not surprising that venture capital firms would be investing huge amounts of money into Robin Hood and Kalshi and draft kings because ultimately, you know, these forms of investment are liquidity extraction machines, right? Like the point of, is not to produce value in society. The point is to produce liquidity events in society.

And what better way to produce a liquidity event than liquidizing the content of people's wallets, you know? And so I think that's what we see happening here. And then this corresponding rise of all these formal partnerships and these formal integration

of these markets, you know, that follows the money, right? Places like CNN and ESPN and all these other companies and all the people doing insider trading, right? They're just following money, right? They're all saying, well, these prediction markets have a lot of money, a lot of valuation, a lot of investment.

Maybe we can get some of that. And I don't think there's a whole lot of care or concern about things like integrity or accountability or even sustainable, like financial sustainability. Everyone is just making short-term financial partnerships and decisions right now. and we're left having to figure out whether the consequence is going to be

and who's going to clean up the mess. Definitely. I think you're spot on with all that, right? And especially if you think about people engaging in these markets more and more, right, as you were saying, it feels like, you know, the honest person can't get ahead. It feels like the stock market kind of rebounded, you know, since the pandemic, but regular people are still struggling through the after effects of all of that.

now worsened even further because of the wars that Donald Trump is starting and, you know, how that is causing oil prices to go up and the price of everything else to go up. It feels like people can't get ahead. So, of course, you're going to turn to betting. You're going to turn to these platforms that, you know, offer the fantasy that, you know, putting your money into this is how you're going to get ahead, how you're going to succeed. And then you have these other parts of society just buying into it because that is the thing that is popular right now. They're probably getting some money from partnerships in order to do this. And then, they're cash strapped anyway, so they're going to do it. But I did want to ask you, right,

because you were talking about how, you know, the platforms like Kalshi and Polymarket are directly related back to the sports betting that we have been talking about for a number of years, right? As you're saying that we have seen very integrated into sports as a whole. And now we're seeing these broader betting markets being integrated into, you know, news and current events and all these sorts of things. And, you know, entertainment news and all this kind of stuff, too. why does it take so long for these types of markets to become more popular, right? You're saying that, you know, Calcium Polymarket started in 2018 and 2020. We start to hear a lot about the sports betting platforms then, and we're hearing about

crypto. Why is it that Calcium Polymarket, do you have an idea of why it takes a bit more time for them to, you know, really go mainstream, I guess? Yeah, it's a really good question. And I think a lot of it comes down to as well that sports betting is still most of the kind of trade flow on these prediction markets like Kalshi and Polly markets. So like they have markets for anything and everything that you can imagine, right? You can buy event contracts on the outcomes of the Golden Globes, which also had an official partnership with, I believe, Polymarket. You know,

you can buy contracts on culture, on politics, on climate, right? There's endless markets on temperatures in cities around the world, right? So it's degeneracy, right? It's just straight up degeneracy where you can place a bet on what the high temperature for today in Paris is going to be. Right. There's nothing useful about that, no matter how you try to like turn over and twist yourself into knots being like, oh no, there's like a socially useful function to having these markets. There's nothing useful about that kind of stuff.

But why did it take a while to, and we'll get into that, because I do want to get into that and get into some of the epistemic claims around like Calci and Polymarket, the CEOs there talk about how, you know, they're arbiters of truth in society and stuff. We'll get into that. Parking that for now, why did it take a while to get up and running? I think is a great question because it did not take long for sports betting to get up and running. There is a built-in kind of fan base for that, right? But I think the thing that really allowed Polly Market and Kalshi to become so popular, it was the election, the 2024 election.

So there are moments where the trade flow in Kalshi and Pali Market really take off outside of sports betting. And those moments are high-profile elections. right? And so what we saw was, you know, that there is a huge amount of interest and use of the platforms, especially around the presidential election. And then there's always a bit of lag, right? And so like these, you know, Kalshi Polymarket see their user-based jump way up in 2024 because of the opportunity to bet on the outcome of a highly contentious presidential race. Plus, you know, other races that are going, you know, going as well in the U.S. You know, it's all pretty much largely in the U.S.

And so that huge jump in user base and the opportunity to, again, make a quick buck by putting your money where your ideology is and being like, no, I know who's going to win. And I'm going to put some skin in the game and try to make some money off of it or whatever it might be, right? There's a bit of lag where you see this huge jump in users in 2024. and then that leads to this huge investment in 2025 into these companies, right? But at the same time,

you see with the jumping of prediction markets, I mean, we'd be remiss to not also talk about that, like, you know, you can't talk about the great degeneracy without talking about crypto, right? And like the way that crypto is really hung in there long after, I mean, like, the whole web 3 thing was an outcome of the great degeneracy, right? It was really about like, how do you just

create purely fictitious, speculative assets, NFTs, you know, it's on the blockchain, it's, you know, crypto, like, how do you create these like just purely speculative, fictitious, tradable assets online, and then like create a whole economy based on that? And that's what Web 3, decentralized finance, that's what it was all about, right? Hold up there, Jathan, because it's just early days. I don't know if I can take this criticism of the blockchain. I know. I love that.

It's always early days. Like, you know, crypto is going to be old enough. You know, crypto is like old enough to drink now. And it's still like, oh, it's early days. It's early days. Still forming. But the only one that has, you know, all those things died away for the most part, except for crypto.

Crypto hung in there. because it hung in there as a tradable asset that was also tied to an ideology, right? Like the Trump administration really tied themselves to crypto in a big way. So obviously I think listeners of this podcast would know about, you know, like WorldCoin, financial and the Trump coin and all of these kinds of like legalized bribery metrics and stuff. and the fact that all of the Trump's sons are basically, you know, all paid crypto shills. Don Jr. is also on the advisory boards of both Kalshi and Polly Market. No way. I didn't know that.

Yeah. So there's direct tie-ins here between the kind of the ideology, the right-wing ideology, the pro-market ideology, the Republican Party, and the. highly speculative forms of gambling, whether it's crypto or it's prediction markets. And so the rise of prediction markets and the mainstreaming of prediction markets outside of sports betting,

I think we can really tie directly back to the 2024 election and specifically tie it to the Republican Party. And I think if Trump had not won, my prediction,

would be that prediction markets would not have had such a boom year in 2025 if Trump had not won in 2024. That's wild. Honestly, I'm still getting over the fact that that Don Jr. is on those boards. Like, I knew that they were very invested in crypto and very involved in that, but I didn't realize the connections to, you know, the kind of broader betting platforms and what have you. And I think it really is interesting that you brought up the election because I feel like in my mind, that was the first time that I, you know, kind of noticed people regularly commenting on what the betting markets were saying on who was going to win the election. And it's when, you know, you really started to hear about those platforms more. And the idea that because people

were betting money in this certain way, that that was going to be like determinative of what the result was going to be. And then you have seen that kind of same, that same idea repeated time and again, which I think comes to what you were saying earlier about these CEOs talking about the platforms as being, you know, arbiters of truth, right? Because people are placing their money in a certain way. So obviously they wouldn't place it if they didn't believe that that was how it was going to be. And I feel like that kind of comes back to the ideology question that we were talking about earlier. So maybe if you want to dig into that a bit more and kind of how these CEOs are framing it and, you know, whether that actually makes any sense, but what they're trying to get to

and talking about these betting markets in that way. Yeah, absolutely. And, you know, there's no better way to hedge a bet than to play both sides. So, I mean, being on the boards of both Kalshi and Polly Market, it's like, no matter which platform wins, Don Jr. is the winner. And by extension, obviously, Trump. And I think it's very funny as well that, like, you know, I had that quote from Trump where he said, you know,

unfortunately the whole world has become somewhat of a casino. and he went on to add, I was never much in favor of it. I don't like it conceptually. It is what it is. I'm not happy with any of that stuff. But it's very funny, he's being like,

I'm not happy with the fact that the whole world is a casino. I mean, completely incoherent just with who Trump is, but also the fact that his son is on the board of these companies. Totally. I'm not happy with it.

Just forget that, you know, I ran casinos and also that my family is totally involved at all this. Exactly, exactly. I'm making a lot of money and I'm not happy about it. But to the ideology point, I think this is really important as well because it kind of speaks to like, you know,

I think all of these technologies as we see, whether, you know, we're talking about crypto, we're talking about blockchain, we're talking about AI, no matter what we're talking about, the technologies always feel like they need to provide, some kind of moral justification and social legitimacy, right? Because they want to do more, because they want to do more than just like put out a great tasting product, right? Like, they want to change the world. They want to run the world. They want you to adhere to their

vision of the world. And so that requires more than just like being a consumer's good, you provider, requires being an ideological purveyor, right? And so you see the same exact thing with prediction markets. They don't want to just, like, you know, make money from people betting

on, you know, which Democrat is going to win the election or what celebrity is going to get a Golden Globe or whatever. And to be sure, I mean, they make a ton of money off of this, right? Like, you know, we didn't, I want the mechanics here,

Before we get to the kind of ideology, I think is really important because it speaks to what the actual interest are when CEOs like Terrick Mansour talk about, you know, turning everything into a tradable asset, financializing every opinion, right? Is that like prediction markets are not like casinos in the sense that like when you buy a contract, a yes or no contract on the outcome of an event, you're not betting against. Cali, right? Like in a casino, you're betting against the casino. But instead, what you're doing is that Cali has no real financial interest in the outcome of any event contract. You're not betting against them, but what you're doing is the company makes money by charging trade fees

on every contract sold. So that means if people place more bets and buy more contracts, then Cali can make more money. So the place. The platform's interest here is actually in maximizing the number of event markets, things that you can bet on, and the volume of trade, people placing bets on their platforms. So their financial interest is a market maximalist here. They say, we don't care what actually happens in terms of these events, right? But what we care about is that more people are buying more contracts and more markets on our platform. we make more money that way. And so I think that speaks as well to then, like,

that's not a good sales pitch. If you're like come and gamble on our platform, you're not, hey, hey, you're not gambling against us. But we do take a slice of every bet that you buy and the more that you bet, the more you place, the more money, not a good sales pitch, right? But what is a, they think is a better sales pitch is things like saying, you know,

well, Kalshi is actually, you know, we're like one of the main arbiters of truth in society, right? And so going back to Mansour's vision, which he out laid out in detail at the Citadel markets, you know, Citadel Security Future of the Market Conference where he was speaking. And he talks about prediction markets as, quote, an antidote to the problem of, quote, living in a world where we have an abundance of information, but with no way to filter the noise and discern, quote, what's real from what's not, right? And so he really frames this as like an information glut problem,

as an abundance problem, as a, you know, there's like multiple realities all happening at the same time and no one can tell what's the one real reality and what's the fake reality, right? And so he really frames prediction markets, you know, this way of aggregating different opinions about the future in one place, using skin in the game as an incentive for accuracy, he uses this as a way of saying, quote,

that prediction markets like Kalshi, he admits, you know, to his credit, quote, won't be a source of ultimate truth, but he then goes on to say, quote, I think there is close as it gets. It also really stands out to me when you look at it that way, like it really reflects this other ideology that you see in Silicon Valley where it's like,

we don't need to rely on the experts. We don't need to rely on the mainstream media and, you know, those traditional forms of authority. We can just rely on, you know, kind of like the decentralized, marketized forces of society that will deliver us the truth without, you know, needing these people who are, who are powerful above us or whatnot. That's right. It's 100% right. It's a technocratic anti-elitist, you know, which very much ties it again into the Republican

and party, right? Like, this is the kind of anti-elite, anti-establishment, anti-media, you know, all of this is very much tied into this idea that, hey, you should do your own research, right? No one, no doctor can tell you what treatment is best for you, right? Like, no news anchor can tell you what's real, right? You should do your own research. And one way to do your own research is to go to a prediction market where you have, you know, as they say, right, that like, you know, Mansour goes on to say that, quote, going to these markets to find an unbiased sort of, or unbiased source of truth will be a, quote, new consumer habit. So like this is, so they really talk about it in this exact way of like, this is an unbiased source of truth. It's as close as it

gets to ultimate truth. It's not a person telling you what to think. It's the vast, the collective brain coming together and giving you the one true reality. There's this real ideological aspect that is trying to justify the prediction market as more than just a degenerate way to gamble, but as a way to filter out the noise and figure out what the ground truth is and feel smarter for having gone to Kalshi to get all of your opinions and predictions about the world. Dude, it's so wild to hear that. But like, you know, you're not surprised that this is the way that they're selling it, especially when you think of, like, who these people are, how they operate, the way that we've seen the tech industry sell

these sorts of things in the past. But also, like, if your business model depends on maximizing the number of trades, then of course you are going to want to financialize everything, because that means that there's a ton of things that you can trade on and then, you know, take your, take your fees and what, what not from. I'm wondering, you know, there has been a lot of discussions about obviously people losing money in crypto scams and in trading cryptocurrencies. And of course, the losses that you see in sports betting and how that is, you know, actually affecting people as they get addicted to these platforms.

Are we seeing those similar stories and issues with, you know, these, this kind of broader betting on platforms like Kalshi and Paul. market? Yeah, 100%. I mean, earlier you brought up that, you know, with the sports betting, there have been cases where people placing bets have threatened athletes and have gone after them, you know, and this is the thing, right? Like, sports betting, prediction markets, these are not neutral intermediaries. These are not unbiased sources of truth. These are not just like outside observers on the outcome of some event, right? Like, they are fundamentally changing the things

that they're placing bets on and creating markets about. The observer effect here comes into account, right? Like, the observation of a phenomenon changes the phenomenon. And we see this as these platforms become bigger, as the trade flow on these markets become bigger, and, I mean, some of these markets can be enormous, right?

We're talking like hundreds of millions of dollars on major sporting events running through Kalshi. Currently, there's a nearly $100 million market on the 2028 Democratic presidential nominee. The market volume here is gigantic. And if you've got a lot of money in play, then that's motivation to go and do something, right? to make sure that event comes out in your favor in some way, whether that's, you know, you have insider information or you're more proactive. And we've already seen these cases, right? Where there was just recently, you know, just last month,

there was a polymarket event contract riding on the question of whether Iran had or had not succeeded in striking Israel with a missile, right? And now the determination of how these outcomes comes into play also can be very contentious, right? Because Polymarket, Kalshi, they are the arbiters of ground truth here, right? They determine if an event has happened or not happened. And so, you know, there can be a lot of contention around where they're, what source they're using as their data for that event or what parameter is the trigger for whether an event happens or not happens and the contention here. Users start getting very legalistic around like the definition of specific words

in the way that the event contract is worded because people have money on the line, right? And so they get a little fervorous and crazy about it. And so in this case, though, there was a case of Emmanuel Fabian, who's a Times of Israel journalist, who was, you know, as the Financial Times reports, quote, was offered bribes death threats in order to change his reports that an Iranian missile had struck near Jerusalem on March 30th, right? And so, you know, as the FT goes on to say, quote, without his consent, Fabian found himself forced into the perilous role of refereeing, which side had won the bet. And so you already see this, right? Journalists are getting death threats because their report,

because they're the source of truth for some event contract. And so people place a the bets are saying, do not report this or I will kill you, or you need to report this, or I will kill you, right? And so you start seeing this, this is already happening. This is completely, again, predictable, foreseeable that if people have thousands or hundreds of thousands of dollars running on, you know, the event of, you know, a news report, that's a lot of motivation to go change what the news reports. Yeah. Maybe we should. should have placed a bet on that happening. We would have made some money. But I think that that's just wild to hear about. But as you say, it's not wholly surprising, especially when we've already

seen it happening. But, you know, what happens when people have money tied up in things? And especially when, you know, some of the people who have money tied up in these things are going to be pretty desperate, right? You know, are going to really need that money and hope that this bet was going to come through so that they can pay bills or what have you. But I was wondering, you know, as we wrap up our conversation. What does it say about our society that gambling is becoming so pervasive, is making its way into so many different aspects of society? What does that tell us about where things are going? And are there real opportunities and even efforts to try to rein this back, to try to shut it down so that this doesn't keep extending and the effects that we're seeing

don't keep getting worse and worse? I mean, I think what this tells us and what really shows is that you know, financialization is a predatory logic here, right? Like this idea of financializing everything, making everything, not just marketized, but subjected to these forms of speculation, of, you know, financial engineering, of value extraction, you know, assetizing everything into a tradable event or commodity, right? Like, you know, the financialization is a predatory logic here. It's not, It's not just one of many ways of organizing the world, right? Like, financialization is a logic premise on we're the one and only way to organize the world. Its goal is to eliminate other competing worldviews, right?

Its goal is to re-engineer society into a casino where, you know, the gambler doesn't win, right? But the hedge funds win, the markets win, the platforms win, the already wealthy win. right? Like, you know, the deck is always stacked against you unless you are at the top of the casino, right? Unless you're in the penthouse. And I think this is a, this is really important, right? Where it's like, you know, I think a lot of the concerns here are about, well, how do we kind of rein this in? How do we take, you know, how do we, uh, soften the worst impulses of, you know, insider trading or perverse incentives? And, you know, these kinds of things, right? But that is a, that is, it's too soft of a response to an ideology, a logic, a technology, you know, that is explicitly about total financialization, total re-engineering of society, total capture of all value, right? Like, if your goal is totalizing, if your ambition is to subsume everything within you, uh, and, you know, either consume or destroy, you know, anything in your pathway, right?

Then the response to that can't be, well, you know, it would be nice if we just made it a little bit more gentle or restricted certain people from engaging in these markets, right? Like, you know, prediction markets don't magically escape all of the social problems and perverse incentives that plague other real markets just because people are betting on the future instead of like buying widgets at a store or something like that, right? There's nothing unique about turning events or opinions into tradable assets.

It's all the same problems, right? A world of total financialization where every opinion is a tradable asset, where the market is this ultimate arbiter of what's valuable and true, it's also a world that creates an endless barrage of incentives for arbitrage, manipulation, collusion, corruption, exploitation, all in this pursuit of profit extraction, of liquidity extraction, right? Like, you know, that to me is prediction markets are a, are an outcome of this broader logic, but I think that they really encapsulate all of its worst impulses

in this like really easy to see way because it is also, it tries to sell you this ideology, you know, built on a century of economic theory that tells us, you know, efficient markets use price signals to reflect relevant knowledge in society, right? This goes back to Hayek, you know, Friedrich Hayek and talking about how, you know, he talks about how markets are the, the most powerful information processor that humanity has ever created and this way of aggregating these hidden facts. And then we get this kind of smuggled through to us by, you know, like business reporters

talking about the wisdom of the crowds and, you know, collective wisdom and kind of distilling this theory into and showing us and telling us, look, this is, this is how it, this is how it is, right? The invisible hand of the market is also a collective brain and, you know, this arbiter of truth. But we have to understand that these ideologies, that these kind of mechanics that underlie these markets are also the kind of the phantasmagoric dreams of libertarian architects, right? That like, they don't actually match up to reality because if a Century of Economic Theory tells us that markets are efficient ways of discerning what's true in society. Well, more than a century of capitalist reality tells us the actual markets are

structured by irrational behaviors, information asymmetries, power hierarchies, all of these things that make it impossible. You can't be a rational agent in a market if you're really just another imperfect person swayed by biases, heuristics, falsehoods, whatever, right? It's impossible to be, to do your due diligence as a good consumer in the market. If every other buyer and seller in the market is incentivized to lie, cheat, and conceal information against you if it benefits them, right? Like, you can't just, it's impossible to maintain this kind of fair standing in some marketplace of ideas, right? This idea that prediction markets are the arbiter was true and not.

If people vote with their dollars and the more dollars you have, the louder your voice and the more powerful your values, right? Like all of these realities of how markets actually operate do not comport with the theory that underlies prediction markets, which is why we're constantly seeing stories about all the failures and corruption and arbitrage. And arbitrage. manipulation that is coming out of sports betting, prediction markets, right? All of these platforms is what we're seeing here is a theory falling apart before our eyes. In rejecting the theory, we also have to reject the predatory logic of financialization that keeps trying to push it upon us. Dude, it's so well said. And it tells listeners exactly why these platforms need to be,

not just opposed, but like need to be completely pushed out of society in the whole idea that they present for how society should be organized, needs to be gone along with it. Jathan, it's always great to get your insights on all of this. It always really helps to put things in perspective. And I think at a moment where we're seeing these platforms just, you know, kind of take off and go everywhere, we need this kind of perspective so we understand what's happening and why it's so wrong. So thanks so much for taking the time to come back on the show. I really appreciate it. Always happy to be here, Ferris.

Jayton Sondowski is an associate professor at Monash University, the author of The Mechanic and the Luddite, and a co-host of this machine kills. Tech Won't Save Us is made in partnership with the Nation magazine and is hosted by me, Paris Marks. Production is by Kyla Husson. Tech Won't Save Us relies on support of listeners like you to keep providing critical perspectives on the tech industry. You can join hundreds of other supporters by going to Patreon.com slash Tech Won't Save Us and making a pledge of your own. Thanks for listening and make sure to come back next week.