David Gurra

Now, there's a lot of people who disagree with the CFTC, state gambling regulators, a lot of casinos and other members of the gambling industry.

Funny that.

argue, yes, that prediction markets should actually count as gambling and therefore be regulated by the states.

How good are prediction markets at predicting the future?

So it depends what kind of market you're talking about.

A lot of scholars have looked at political markets and prediction markets to predict elections and have overall found that prediction markets are more accurate than polling and certainly more accurate than you or me or any individual trying to prognosticate about elections.

What's interesting, though, is that those markets become less accurate the smaller they are.

So a presidential election market could be quite accurate, but then once you get down to more state and local races, when there's less liquidity, that's going to be less accurate.

I mean, some of the bets that we see are extraordinary.

I mean, I don't know how much liquidity there is on whether Jesus Christ is going to return in the next couple of years, but that's literally something you can go and place a wager or at least a prediction on using these markets.

How have the companies themselves, Calcium, Polymarket, navigated what has been thrust into really now success, but also backlash at the same time and worries about insider trading in this?

Yeah, the companies have taken different approaches.

Kalshi has really tried to position itself as the adult in the room.

They emphasize the internal rules that they have around insider trading, around market manipulation.

They have whole teams...

and software algorithms designed to detect trading patterns that might set off red flags, which they then report to regulators.

Polymarket is in a slightly different position because so much of their trading happens overseas and is not regulated by the CFTC.

And they also just haven't talked about it as much.

So I'd say Kalshi,

particularly because it was the earlier entrant in the US, has emphasized cooperating with regulators, trying to be above board about the markets that they provide.