# Prediction Markets vs. Gambling: Where’s the Line? | Prof G Markets

Markdown copy of https://realalpha.app/v/J31lDCBRZgg/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

Tarek Mansour argues prediction markets can improve forecasts and hedge real risks, but their integrity depends on consumer safeguards and insider-trading rules.

- Show: Prof G Markets
- Hosts: [Scott Galloway](https://realalpha.app/people/scott-galloway/) & [Ed Elson](https://realalpha.app/people/ed-elson/)
- Guest: [Tarek Mansour](https://realalpha.app/people/tarek-mansour/) is cofounder and CEO of Kalshi.
- Published: Feb 27, 2026
- Length: 51 min

## The best minutes

- [22:00](https://realalpha.app/v/J31lDCBRZgg/?t=1320) [Prediction markets can improve forecasts when trading is informed](https://realalpha.app/s/prediction-markets-can-improve-forecasts-when-trading-is/) (7 min)
- [29:55](https://realalpha.app/v/J31lDCBRZgg/?t=1795) [Insider trading can destroy trust even when it improves prices](https://realalpha.app/s/insider-trading-can-destroy-trust-even-when-it-improves/) (6 min)
- [35:43](https://realalpha.app/v/J31lDCBRZgg/?t=2143) [Prediction markets can hedge risks insurers struggle to price](https://realalpha.app/s/prediction-markets-can-hedge-risks-insurers-struggle-to/) (3 min)

## Also worth watching

- [12:29](https://realalpha.app/v/J31lDCBRZgg/?t=749) [Kalshi says its fee model avoids sportsbook loss incentives](https://realalpha.app/s/kalshi-says-its-fee-model-avoids-sportsbook-loss-incentives/) (6 min)
- [41:34](https://realalpha.app/v/J31lDCBRZgg/?t=2494) [Kalshi spent four years getting regulated before launch](https://realalpha.app/s/kalshi-spent-four-years-getting-regulated-before-launch/) (3 min)

Skip the opening ads and London/South by Southwest chat, the sponsor breaks, and the post-interview discussion of speculation and gambling.

## Full analysis: Tarek Mansour says revenue grew closer to 35 to 40X

- Mansour thought fiscal 2024 to 2025 revenue grew closer to like 35 to 40X, maybe like 60X annualized.
- Kalshi's exchange model avoids direct customer-loss revenue, but transaction fees still reward trading.
- Teams assessing it should test forecasts, contract payouts and user safeguards before relying on volume.

Its 7 sections, what it means for you and what to watch are on [the page](https://realalpha.app/v/J31lDCBRZgg/#analysis), free with an account:

- [38:41](https://realalpha.app/v/J31lDCBRZgg/?t=2321) Reported growth sets a high bar for proof
- [12:58](https://realalpha.app/v/J31lDCBRZgg/?t=778) Fee economics shift losses but retain volume incentives
- [24:48](https://realalpha.app/v/J31lDCBRZgg/?t=1488) Kalshi's relevance line still depends on judgment
- [26:17](https://realalpha.app/v/J31lDCBRZgg/?t=1577) Mansour cites forecast comparisons without full tests
- [30:41](https://realalpha.app/v/J31lDCBRZgg/?t=1841) Insider rules protect trust but leave edge cases
- [36:14](https://realalpha.app/v/J31lDCBRZgg/?t=2174) Hurricane contracts make risk transfer tangible, not proven
- [43:38](https://realalpha.app/v/J31lDCBRZgg/?t=2618) Four years of licensing set posture, not outcome

## Summary

Tarek Mansour is the cofounder and CEO of Kalshi. He began his career as a quantitative trader at Goldman Sachs and a global macro trader at Citadel, then cofounded Kalshi in 2018.

Mansour argues that prediction markets can turn crowd knowledge into useful forecasts because traders have money at stake. He says Kalshi’s exchange model does not depend on customer losses, while describing safeguards for users and rules against insider trading. He draws a line between markets tied to events with wider relevance and bets such as predicting a Gatorade color, and points to hurricane and sports-bonus hedging as practical uses. Mansour says Kalshi spent four years getting regulated before launching and sees room to grow through institutional use, international expansion and new market categories. Scott Galloway and Ed Elson question where prediction markets cross into gambling and call for clearer boundaries and protections.

### Minute by minute

- [4:28](https://realalpha.app/v/J31lDCBRZgg/?t=268) **Growth is compounding into the mainstream.** Galloway says Kalshi’s revenue grew about 1,000%, its platform volume rose from $280 million to $2.3 billion, and it raised $1 billion at an $11 billion valuation. Mansour attributes the surge to compounding growth and demand for an alternative to distrusted news sources, arguing that traders’ financial stakes can improve crowd forecasts.
- [7:47](https://realalpha.app/v/J31lDCBRZgg/?t=467) **Scrutiny follows mainstream adoption.** Mansour says consumer companies often face a new wave of scrutiny when they reach the mainstream, and calls public debate about emerging technology healthy. He identifies concerns about gambling, addiction and insider trading as central questions for prediction markets.
- [9:56](https://realalpha.app/v/J31lDCBRZgg/?t=596) **Kalshi emphasizes market structure and safeguards.** Mansour says most trading volume comes from users aged 25 to 45, with another group aged 60-plus, and describes power users who build models around topics they follow. He argues that Kalshi charges a fee rather than profiting from customer losses, and cites education, self-exclusion, limits, pauses, age gates and warnings as safeguards.
- [15:57](https://realalpha.app/v/J31lDCBRZgg/?t=957) **Active trading can support forecast quality.** Galloway argues that transaction fees still reward trading activity, even if Kalshi does not profit when customers lose. Mansour says informed traders, including people modeling weather from satellite data, help improve forecasts; he argues the market needs forecasters, speculators and hedgers, but not excessive behavior.
- [18:44](https://realalpha.app/v/J31lDCBRZgg/?t=1124) **Marketplaces differ from house betting.** Galloway cites a report that almost 90% of prediction-market volume is sports-related and asks whether markets such as Gatorade color bets count as gambling. Mansour confirms sports has grown sharply but says Kalshi does not offer that market. He argues that markets should focus on events with wider relevance and distinguishes an open exchange, where participants trade with each other, from a house setting the odds against customers.
- [25:37](https://realalpha.app/v/J31lDCBRZgg/?t=1537) **Markets can produce useful public signals.** Mansour says prediction markets can price questions about the future and help people make better decisions. He cites a Fed paper that he says found Kalshi more accurate than Fed funds for forecasting Fed decisions and more accurate than Bloomberg economist surveys for CPI forecasts. He also describes a market on whether the outcome outlined in a Citrini AI paper will happen.
- [28:18](https://realalpha.app/v/J31lDCBRZgg/?t=1698) **Insider rules protect market trust.** Galloway doubts that markets vulnerable to insider trading will remain viable on their own. Mansour says unchecked insider trading undermines trust, and that Kalshi bars trading on information a person has a legal duty not to disclose. He says the rules resemble stock-market rules, acknowledges they are not perfect, and argues that information people can legally obtain through research is fair to trade on.
- [35:43](https://realalpha.app/v/J31lDCBRZgg/?t=2143) **Prediction markets can hedge real risks.** Mansour says residents of the Florida Keys have asked about contracts to hedge against hurricanes hitting their cities, especially as insurance companies and reinsurers have withdrawn. He says an open exchange can create competitive pricing. He also describes teams hedging performance bonuses and puts the sports insurance market at $9 to $10 billion.
- [38:10](https://realalpha.app/v/J31lDCBRZgg/?t=2290) **Growth may broaden beyond retail.** Mansour says Kalshi’s fiscal-year growth from 2024 to 2025 was closer to 35 or 40X, with annualized growth perhaps 60, and says roughly half that pace could be possible in 2026. He points to institutional traction, international expansion and more types of markets, and says 45 percent of men up to age 45 are active prediction-market users, including people who consume markets as an information feed.
- [41:44](https://realalpha.app/v/J31lDCBRZgg/?t=2504) **Kalshi chose regulation before launch.** Galloway asks how Kalshi will embrace regulation despite its costs. Mansour says the company spent four years getting regulated before launching a product and that he does not see how to build a financial-services company without proper oversight. He says regulators should monitor money flows and transactions, and that the industry needs to work with policymakers on unresolved questions.
- [45:11](https://realalpha.app/v/J31lDCBRZgg/?t=2711) **Hosts want clearer boundaries.** Galloway says he remains conflicted about speculation but sees potential in hurricane-risk hedging and crowdsourced forecasts. He and Elson credit Mansour for choosing regulation. Elson calls for clearer lines between speculation, investing and gambling, and says markets such as betting on a Gatorade color should be regulated and disclosed as gambling.

## Transcript

Prof G Markets, hosted by Scott Galloway and Ed Elson, with Tarek Mansour.

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[0:14](https://realalpha.app/v/J31lDCBRZgg/?t=14) bigger than what you have here is a structural change in the world distribution Cash is trash. Stocks look pretty attractive. Something's going to break. Forget about it. How are you, Ed? How are you? I'm doing very well. I'm here in London, and I had drinks with you last night, which was awesome. You know me. I like to get to know my staff. I like to spend quality time with them. We did spend some quality time. We did. We got kicked out after about an hour. The other thing is we went to a bar that we were very excited about, and I show up because scott scott showed up a little late and i shower but it turns out that it's comedy night comedy night and there's some scotsmen on stage speaking a dead language and only twins speak to each other and and they closed the bar down so i'm like oh this fucking sucks so we had to spend the first 20 minutes listening to this guy i gotta tell you he was absolutely bombing as well it was not comfortable to sit through yeah but then we had a lovely drink i got to know your girlfriend i just sat there and thought, what is she seeing in him? I don't get it. I don't get it. I don't get it. Ed, I don't think young people should get married, but my advice to you is three things.

[1:22](https://realalpha.app/v/J31lDCBRZgg/?t=82) First, lock. Second, it. Third, down. Lock it down. It is, I think the world of you, you are so out of your way class, my brother. You are so out of your way class. Anyways, It's good to see you. That's very nice. It was great to see you. She had a great time. I had a great time. It's good to be in London. It's nice, right? Yeah, it is very nice. It's too dark and it's a little late, but it's nice. Well, we have a big, important interview here with the CEO of Kalshi. Shall we start to move on to that? Let's do it. Okay. Actually, before we do that, apologies. Let's not. I forgot to also say that Prof G Markets is returning to the Vox Media podcast stage at South by Southwest. We will be there on Saturday, March 14th. So if you want to see that, come join Scott and me at 10 a.m. on the 14th of March at the Hilton Austin for a live taping of Prof G Markets. Live show. It's going to be epic. Scott and I, very excited. Or at least I am. I think scott's excited you had me till you said hilton austin i don't that's not what i aspire to but you know what's going to happen here it's the same thing we come in we skirt the line and a few people take a picture with me and they're like like oh they're like

[2:48](https://realalpha.app/v/J31lDCBRZgg/?t=168) Oh, and by the way, I have a daughter. She's at UT. Is Ed single? Is Ed single? Everyone is asking about your romantic status when we go to these things. That's not what happened last night where we're standing together and then someone comes up and goes, oh my gosh, Scott Galloway. And he looks at me and he's like, I know you too, but Scott Galloway, it's great to see you. The tall, handsome guy? That's right. He is a tall drink of lemonade, like a nice, young, handsome man. Yeah, yes, I enjoyed that. I enjoyed meeting him. Yeah, it was good. It was very good. Yeah, but South by Southwest, and you can learn more and get a special discount.

[3:23](https://realalpha.app/v/J31lDCBRZgg/?t=203) I love how they're already discounting us. That makes me feel good. On your South by Innovation badge at voxmedia.com slash SXSW. That's voxmedia.com slash SXSW. We'll see you there. I'm actually really excited. How many people from Prov G are we bringing to Austin, Ed? We've got a huge crew. I think it's like 12 people, maybe. I heard 16. I wonder how much money that's going to cost me. Oh my gosh. I'm excited. Anyways, everybody, Ed and Scott are going to be at South by Southwest. Please say hi. We enjoy, we really do enjoy meeting our fans. And Ed, not so much. Ed's sort of standoffish and a little bit arrogant, thinks he's better than everybody else. But not me. Not me. Not me.

[4:13](https://realalpha.app/v/J31lDCBRZgg/?t=253) Say hi. Hola. Hola, el perro y el absorbo de self, young person, young man. See you at South by Southwest. No comment. Here's our conversation with Tarek Mansour, co-founder and CEO of Kalshi. Tarek, good to see you. Welcome back to the show. Thanks for having me, Scott and Ed. I'm excited. so it's been a little over a year since i first interviewed you on first-time founders a lot has happened since then just looking at calci as a company your revenue has grown by about 1000 percent uh your volume on this platform has gone from 280 million dollars to 2.3 billion dollars you also uh recently raised a billion dollars at an 11 billion dollar valuation basically we knew calci was going to explode but it's exploded in a way that is kind of uh larger than life and getting a lot of attention.

[5:20](https://realalpha.app/v/J31lDCBRZgg/?t=320) I'll just start with this. Why is Kalshi so popular right now? And why are prediction markets so popular? You know, one, it's just the exponential. You know, when, you know, the numbers are small, the exponential, you don't really feel it quite as much. And then as you compound and compound, all of a sudden, you know, everything basically happens all at once. And you tend to see that with sort of, with a lot of consumer businesses that really hit the mainstream. and they're growing at a, I mean, at an exponential or exponential looking pace. And I think that's definitely happening in prediction markets, or at least in the case of Kalshi.

[5:54](https://realalpha.app/v/J31lDCBRZgg/?t=354) The second thing where I think we're benefiting quite, you know, I think that prediction markets are benefiting from an overall societal wave, which is sort of this general distrust in traditional news sources or information sources. And I think people are looking for an alternative. And, you know, I think they found it a lot, you know, a lot of people have found in podcasts, I don't think a lot of people have fun in social media. I think people have, I mean, social media had this kind of idea of, you know, crowdsourced wisdom or crowdsourced truth, but social media incentivized clickbaits in a way that, you know, people over time are not feeling like, you know, news feeds are basically like split into two.

[6:32](https://realalpha.app/v/J31lDCBRZgg/?t=392) the world is basically completely dispersed. Everything is polarized. And prediction markets are in some ways some sort of antidote where you get the crowd wisdom. You have a lot of people participating in prediction markets, but you have skin in the game. People are putting money where their mouth is, and that leads to some of the answers that get out of prediction markets to be more accurate. And that's been definitely a big catalyst of the growth. There are two things I'd want to kind of separate in this conversation. One is prediction markets as a content platform, which i totally agree with you on it's been massively helpful for us i think a lot of people find it interesting because it just tells you a little bit more about the future if you're trying to understand an issue you will go to the prediction markets and you'll find the question and then you'll get to see like this is what the consensus view is this is a probability of this event occurring or not occurring that's content it's also a trading platform some would say a gambling platform, which is a different kind of thing. And it brings with it a lot of different issues. And I think as this platform has gotten so popular over the past year, it has also drawn

[7:43](https://realalpha.app/v/J31lDCBRZgg/?t=463) a lot of criticism. And I think a lot of that criticism is reasonable. valid worth talking about so i guess i'd love for us to dive into those criticisms um as as the founder of this company as the ceo what would you what would you say is the the overall um let's say the the three or four biggest criticisms of the company right now uh based on what you're seeing based on how it's things are being reported what would you say are the issues that people are worried about when it comes to prediction markets and Kalshi? Any consumer company, and this is one of the things that we've learned and I'm learning in real time right now, most consumer companies that hit the mainstream, they go from like really exciting new technology.

[8:30](https://realalpha.app/v/J31lDCBRZgg/?t=510) And when they hit the mainstream, there's a sort of flip where all of a sudden, you know, there is this sort of like, let's just kind of air out all the risks, the dangers, all the ways that this could go wrong. You know, I think we've seen it play out with Uber. Airbnb had its fair share of it. We're seeing it play out with AI on many dimensions, many levels. And we're seeing it play out in prediction markets. And to some extent, I think that's a healthy thing. Like I think society having a debate about new technologies and how to kind of deal with them is a good thing, right? If we all agreed on everything, you know, we probably are headed in the wrong direction.

[9:05](https://realalpha.app/v/J31lDCBRZgg/?t=545) Look, my understanding is like, there's one, you know, this question of like, you know, is this gambling? is this different? You know, are there kind of concerns about addiction and socialist isolation? I know you guys, Scott, you talk about this a lot. I think number two is there's the concerns of insider trading. And to me, I bucket it into kind of, is the market fair? How do we police it? What is being done about that? But to me, I don't think it's totally, totally abnormal given, you know, the rate of growth and how fast this basically has gone mainstream. Well, just to double click on that so there's a real fear that a lot of big tech or a lot of technology companies as they scale tap into a less mature prefrontal cortex of men looking for dopa hits and that essentially prediction markets are sort of the high iq or graduate education version of gaming apps and that it preys on a dopa hungry male and that there's enormous incentive for uh well first let me start there who who is your typical what's the demographic profile of your average customer and what is what is different from uh Speculation or prediction markets from just flat-out gambling sites.

[10:22](https://realalpha.app/v/J31lDCBRZgg/?t=622) You know, the vast majority of volume is really in the bucket of 25 to 45 years old. And then we have a bucket and, you know, 60 plus. So retired has sort of disposable income time on their hand. And I think that, like, you know, when I think about the typical customer, there's been recent reporting, which I think was pretty interesting about this. You might have, I don't know if you've seen the New York Times article about the rise of the prediction market trader. and they kind of gone through a number of, you know, and the most active traders, the people that basically, you know, drive a lot of the activity on the platform, you know, people that you'd kind of considered like a super user or power user.

[10:59](https://realalpha.app/v/J31lDCBRZgg/?t=659) Those are the people that like are spending quite a bit of time modeling. Like, you know, I'm passionate about the economy. I read the news a lot. And like, you know, I'm going to basically be forecasting inflation on a daily basis. Or I like mentioned markets. You know, Joel, there was a whole profile on him on this New York Times piece. And the guy has built pretty sophisticated models of what words are going to be said and what appearances. And those are people that have had an interest in something and then they figure out an outlet to basically make money off of it or engage with a community that has kind of that shared similar interest.

[11:36](https://realalpha.app/v/J31lDCBRZgg/?t=696) Like these are the most engaged in our Discord or we have this Kalshi Idea platform, which is basically Twitter, but you can only speak if you have a position. So it's kind of a Twitter that's filtered for people that are position takers. But to me, it's like, you know, I think the concern that you sort of outlined is a real concern, right? Like I think, in my view, any financial markets, and I think this concern applies to any financial market. I think it applies to, you know, day trading of options or this kind of idea of zero DT options that settle on any given day. Retail trading, I think it applies to crypto, also the meme coins.

[12:11](https://realalpha.app/v/J31lDCBRZgg/?t=731) And obviously it applies to traditional gambling and sports betting. And that risk exists in prediction markets. And I think the way that I think of it and as I build a company and as this company scales, there are certain things that are intrinsic to the model and then there's guardrails, like things that you add to the model around your business model to basically protect consumers from this sort of thing. So let's talk about the intrinsic piece. So I think prediction markets is a much healthier mechanism to engage with something than a lot of these other mechanisms. Like, I think a lot of the problems that we've seen with dopamine hits and addiction A lot of the issues that we, you know, people generally pertain to as gambling have come from the gambling industry.

[12:53](https://realalpha.app/v/J31lDCBRZgg/?t=773) And I think, and you ask why, well, you've got to look at the incentives in that industry.

[12:58](https://realalpha.app/v/J31lDCBRZgg/?t=778) **Tarek Mansour:** Like when you go to a casino or you go to, you know, a traditional sports book, the revenue of that company is equal to the customer's losses.

[13:05](https://realalpha.app/v/J31lDCBRZgg/?t=785) The way that that whole system, the business model is like, well, if ad comes to me, the business model is figuring out how much money can I take from ad. That's how it works. So if that's your business model, what are you going to do? Well, what you're going to figure out is like, okay, I have Ed and Scott as customers. If Scott is the winner, I'm going to block Scott from participating because anything that Scott wins, it's going to take from me as a business. And if Ed is a loser, I'm going to figure out how to create a habit, how to get Ed hooked in the platform and get them to come back pretty consistently.

[13:37](https://realalpha.app/v/J31lDCBRZgg/?t=817) And that to me is a lot of where, like kind of a lot of where, it's a perverse incentive. And, you know, show me the incentive. I can show you the outcome. Well, what the outcome is going to be is basically you're going to get people hooked and dopamine hits are going to basically be, you know, increasingly a bigger part of the platform and so on and so forth. Prediction markets just don't have the inherent incentives. You know, I take a small fee and Ad is not trading against me. Ad is trading against Scott. It's inherently just more social. It's inherently more, like I think the model doesn't have this sort of embedded perverse incentive.

[14:04](https://realalpha.app/v/J31lDCBRZgg/?t=844) And that enables me as a business model to just have much more versatility around solving that problem, around creating really good guardrails around that problem. Like, you know, when Ed comes, he's not basically facing an algorithm that's just sort of optimized to get Ed hooked. Ed is facing Scott, is facing you and is figuring out whether Ed can be smarter than you, whether he can do research, how can he beat you? Intrinsically more social, intrinsically more competitive, intrinsically more interesting. In terms of the guardrail, we focus on this a lot. And I think that like a lot of the guardrails are really what you want to prevent is excessive behaviors.

[14:36](https://realalpha.app/v/J31lDCBRZgg/?t=876) I think anything taken to the extreme is bad. And, you know, I talked about some of the trading, like retail trading, some of these examples, but, you know, you see it in other places. You see it with drinking. You see it with online shopping. Like you probably have a, I mean, I'm the type of person, like I have a bunch of shit in my house, like because I have these Instagram ads that keep feeding me all these like random trinkets that I keep sort of like clicking on and buying. And I think that's a form of excess. Like I somehow like find my, you know, I do the thing and then five minutes later, I'm like, why did I just buy that?

[15:05](https://realalpha.app/v/J31lDCBRZgg/?t=905) Like, why, you know? And I do this on Amazon. I do this on Instagram a lot. And all of these things take into the excess tend to be bad. And so how do you, you know, you have to create measures on like, okay, how do you prevent excessive behaviors? You have to do a lot of customer education. We have to. tools around self-exclusions, limits, pauses. And then we also have surveillance where like when we do find someone, especially on the younger side, you know, we do have age gating. So you cannot participate as a minor, obviously. But someone on the younger side, you know, repeatedly losing, repeatedly kind of taking aggressive actions, doing too much of their portfolio, we start showing warning signs.

[15:35](https://realalpha.app/v/J31lDCBRZgg/?t=935) Like, hey, you should not put more than X percent of your portfolio in one thing. Because, you know, again, like long-term, if you want to build a healthy ecosystem, you don't want these sort of behaviors to go off the rails. But then also our incentive is not misaligned with those guardrails. In some ways, it is aligned. We want people to be long-term participants in this model. We want them to be engaged socially. We don't win a lot if they come and lose a lot of their money very fast. That's actually a bad outcome for us. The pushback to that point, though, you make the point, which I agree with, show me the incentive, I'll show you the outcome.

[16:07](https://realalpha.app/v/J31lDCBRZgg/?t=967) The pushback for a lot of people to that would be actually the incentive might not be that consumers need to lose, or that traders need to lose money, but they need to trade. And if you can get them addicted, if you can get them to keep trading and get hooked, ultimately, that actually is a boon for your business. So the guardrails you're describing, they are inherently counter to the incentives that are built into your business, which is, we need people to trade as much as possible, because that is our business model. We're taking a transaction fee on all the trades that happen. We don't want you to lose money, but we want you to put some money up.

[16:47](https://realalpha.app/v/J31lDCBRZgg/?t=1007) What would you say to that? I think there's a presumption in your question that's just assuming that all the trading is basically dopamine-type behavior, right? Which is not the case, right? Actually, again, a majority of power users, the people that are really controlling the most volume, are the people that are making these, are actually necessary. Their trading is necessary to this, because they're making the forecast more accurate, right? Like the stock market doesn't get efficient if nobody trades. You need the trading and you need the informed trading. You need the well-researched trading.

[17:16](https://realalpha.app/v/J31lDCBRZgg/?t=1036) And actually the trading that grows the most over time is the winners, is the people that like are essentially very well-researched. They predict the weather because they're scraping satellite data. These are people that are building models. They're in the spreadsheets. They're doing math. They're building systems. These are people that are actually rejected from traditional, for example, like sports betting because they're making too much money. They get blocked and limited there, but they can come to prediction markets. It's a good home for that. So, like, yes, you want the trading, but, you know, the dopamine level trading is not necessarily the thing that makes the forecast the most.

[17:48](https://realalpha.app/v/J31lDCBRZgg/?t=1068) accurate, right? Like it's, it's not, you know, it's, you know, it's part, you need that vibrant ecosystem. You need speculators, you need, you know, uh, forecasters, you need hedgers, which we can, which we can talk about, but, um, and then, but you don't necessarily need the excessive behaviors and the excessive behaviors are the things that you can cap over time to build a well-balanced ecosystem. We'll be right back after the break. And if you're enjoying the show so far, send it to a friend and please follow us if you haven't already. We're back with Profty Markets. I just want to go back to some of the criticisms. And by the way, the reason I'm interested in this is because this is what everyone is interested in when it comes to prediction markets right now. And I was just on a PBS panel where, you know, this was the entire conversation. There was a focus on young men and young men's issues, this prevalence of addiction and this trend towards gambling.

[18:44](https://realalpha.app/v/J31lDCBRZgg/?t=1124) And this question of do prediction markets sort of fit that description? And so what are we supposed to do about it? How are we supposed to feel about them? So one thing that I found interesting, and I want to get your reaction to, I read somewhere that almost 90% of the volume that is happening on these prediction markets, and I think on Kalshi, is related to sports. so it's prediction markets trading but if it's trading based on like what color is the gatorade going to be at the super bowl halftime show that to me fits the bill of gambling it's to me is a kind of a different thing from the looking at satellite data and figuring out how will this affect weather patterns so i guess my question is one is that right are you seeing that amount of sports prediction markets trading?

[19:37](https://realalpha.app/v/J31lDCBRZgg/?t=1177) And two, does that not fit your definition of gambling? So we're seeing a lot of sports. Sports has grown astronomically last year. We don't have the Gatorade market. Again, there's unregulated regulated. But we don't have the war, terrorism, assassination markets either. You know, the insider trading is also not, you know, the Maduro trade And, you know, the capture that's not regulated prediction markets or Calsi. But look, I think there is sort of definitional, like, okay, maybe like, let me just kind of, let me just, let's just align on some definitions so we can have like a precise conversation, right?

[20:16](https://realalpha.app/v/J31lDCBRZgg/?t=1216) When someone is buying an option that expires end of day, retail participants buying it against Citadel and the open market on, you know, traditional, you know, the most boring names like NASDAQ or Chicago Board of whatever. do you consider that to be gambling or a form of gambling? I think it's something different from investing. And so I would consider it, I would call it gambling, yes. And that is why I'm very interested in the regulatory rules around options trading, which are stricter than buying a stock, for example. So long answer, short answer, yes. So let's just establish a definition and then we can basically have a principal conversation here.

[20:59](https://realalpha.app/v/J31lDCBRZgg/?t=1259) So there's a few definitions we can basically take on, right? It's like one definition could be there's a threshold of research or understanding in a certain market that needs to happen for this to be a trade or not gambling. And obviously, you'd see kind of the problems with that definition from a delineation perspective, because how do you know who does research and you get into anti-state questions and like now you have access, you know, open access problems, etc. One other one that I believe to be too broad is one that a lot of states in their state rule books hold, which is like you're staking some money in the hope of making more money on something you don't control.

[21:43](https://realalpha.app/v/J31lDCBRZgg/?t=1303) that's one you know now you could see where that lands right you know if you and i just leave this call and open schwab and buy stock even if we're investing that stock that's gambling right like we just gambled so so what is the line like i mean how do we define that line and and you know uh i'll tell you how we do it but i but it's actually kind of grounded with how historically the lanes and the regular like the regulations have basically landed on this piece which is one is there a natural underlying instrument that you know where it's it's helpful to price or forecast the thing because some people in society care about it whether socially or economically or other and you know number two is the mechanics and i think that's the most important thing when we talk about addiction all the issues the mechanics is this you know to me gambling is the negative incentives right it's the incentive where i'm walking into a casino know and that business is essentially like structured against me like it's rigged against me it's basically going to incentivize all bad behaviors that we're talking about because that's how they make money whereas an open and open marketplace like a marketplace where I'm a

[22:57](https://realalpha.app/v/J31lDCBRZgg/?t=1377) marketplace I'm a neutral fair exchange where I provide the rules I provide the guardrails I provide the technology I provide the structure but then people are engaging with each other and they're figuring out the pricing, you could be a price taker ad or you could be a price maker and then you're figuring out how to beat others. That has historically fell under a definition of an exchange, a marketplace, whether a stock market, a commodity market, et cetera. And that same principle was drawn in 1905 by the Supreme Court for grain futures. And then they delineated like there's the bucket shop.

[23:27](https://realalpha.app/v/J31lDCBRZgg/?t=1407) So if you go and trade directly or bet directly against like a company on grain futures, that's like bucket shop laws. It's going to go state by state. And if you do it in an open, fair marketplace and the Chicago Board of Trade and now CME, that's considered like a federally regulated financial market. market. And then the same thing happened with the election market for Kalshi. And then, you know, what we're seeing kind of play out in sports. Also exists, by the way, insurance. You know, you have state-regulated insurance, which is like one insurance company is the one that gives you the price and you just take it how it is, versus hedging, which is on CME. If you go and want to offload some risk in an open and fair marketplace where anyone can compete on the price, that's also like open and fair game. So that's kind of like where, you know, we, I think, draw the line. And to me, all prediction markets very squarely fit under kind of number one and number two. I mentioned the Gatorade at the halftime show. What color is the Gatorade going to be? Which is something that you can bet on on gambling apps. You say that's not something that we provide on Kalshi, which I didn't know that. I assumed that that was kind of fair game.

[24:33](https://realalpha.app/v/J31lDCBRZgg/?t=1473) that raises an interesting question of where does that fall on the line why does betting on the color of the gatorade not work for you guys well i think it's kind of the pillar number one is like is this like a natural like thing a risk or an occurrence that like okay trading on brexit like if you're have a market on whether brexit is going to happen or not that has extrinsic consequences to a lot of people, government, businesses, people. Pricing that thing is relevant. People care, right? Like pricing, whether this is a 20% chance or it's a 60% chance, that's a very important thing. That can be basically traced back to asset prices.

[25:17](https://realalpha.app/v/J31lDCBRZgg/?t=1517) That can be traced back to how we price the S&P, to how we price the FTSE. That's a very important thing to have. That has extrinsic consequences outside of the speculative activity that is going to happen on people trading on whether Brexit is going to happen or not, right? The Gatorade is a harder kind of argument because the odds are, I think it's, I would assume it's 50-50, right? Or coin toss is the same, like a similar sort of setup. So this is where like, when you go back and if you all take a step back, you know, on kind of like this sort of, what is the purpose? And maybe we didn't talk enough about this so far, like about prediction markets.

[25:46](https://realalpha.app/v/J31lDCBRZgg/?t=1546) Like, why is it so important? Well, I, you know, I'll say like, what they do is they apply a market-based mechanism to questions, to these key, to a lot of questions about the future. Some of which may be existential to humanity, some of which less existential. And you have to build a marketplace of diverse range of participants and diverse range of sort of opinions and all of that. But I think to me, it's like what this does. And I don't know if you have seen there's a Fed paper last week that has kind of in some ways confirmed a lot of stuff. I was saying over the last few years, and the Fed paper was saying basically, cash fills a lot of holes.

[26:18](https://realalpha.app/v/J31lDCBRZgg/?t=1578) **Tarek Mansour:** One, it's more accurate than Fed funds for forecasting Fed decisions. It's more accurate than any other like survey,

[26:24](https://realalpha.app/v/J31lDCBRZgg/?t=1584) like the Bloomberg Economist survey for forecasting CPI or inflation prints. But it also gives us a full distribution of outcomes and it does it in real time. It gives us like a much better understanding of basically the economy or a better understanding of the economy. And what excites me about what we're building is like over time, if you get a very liquid marketplace about all these kind of different questions, you will basically just have a better light about our future, which enables better decisions, better resource allocation, and then better also like better asset pricing for all the kind of assets that we're currently pricing.

[26:58](https://realalpha.app/v/J31lDCBRZgg/?t=1618) So there's a paper from Kevin Hassett about this idea of as society gets increasingly more complex and you used to be agriculture-based economy. So as long as you understand the agriculture, you understand where we're heading. Then we added, you know, industrials, then we got into a service-based economy and now information economy, all these different, now AI is happening. As you add more and more complexity to society, it argues that we need infinite number of markets. You in some ways need prediction markets to price all these different aspects and facets of society so that you can actually price like the core asset prices like homes and S&P and the rates and the big sort of ticket items that we currently price.

[27:41](https://realalpha.app/v/J31lDCBRZgg/?t=1661) And maybe to make that like example very concrete, like, you know, you might, did you read the AI paper that some people are calling it a Doomerism AI paper from, what was it called? Citrini. Citrini, yes. And what we're doing is we're launching a market this afternoon on like whether the Citrini outcome is going to happen. Because in the Citrini paper, like someone put out an opinion and it actually tanked a bunch of stocks. The market actually reacted to this. And, you know, I want to release that market to price that specific outcome, like price these, like the outcomes that people are talking about when it comes to AI and get a better understanding of AI.

[28:16](https://realalpha.app/v/J31lDCBRZgg/?t=1696) Because if you have these markets getting us better prices about these things, those will end up basically helping us price the bigger things, like the S&P and the stocks. And those are things that basically excite me about what we're building. When I think about potential for insider trading, which has gotten a lot of reporting, I think eventually that'll be starched out when people realize that you never want to bet against someone who has more information. so i see that probably going away organically why would you say that this already happens i mean insider trading is rampant across many markets including the stock market the way we prevent it is through regulating it and making it stop it doesn't organically stop itself if i'm betting on the speed of a baseball pitch and i realize i i don't know but someone in the audience may be giving hand signals to somebody or it comes out that this is highly susceptible to insider trading i think fewer and fewer people are going to bet on those things that don't have access. My friend Todd Benson once said to one of my classes at CERN, never bet on anything where there's, if you can, where you believe there's people who may have much greater information than you. I think a lot of the

[29:29](https://realalpha.app/v/J31lDCBRZgg/?t=1769) most ripe for insider trading markets are just going to, quite frankly, die a slow death because people are going to realize they're maybe betting against people who... I don't understand why anyone would bet on, I forget what you call them, markets, where someone's saying something on a TV show that's already been pre-recorded, unless you are engaging in insider trading. Because it's fun. Well, then it's consumption. It's not gambling. And you better make sure you're having a lot of fun, because it means someone with a lot more information is betting against you. You're on the wrong side of that trade. Anyways, Tarek, what would you say?

[30:05](https://realalpha.app/v/J31lDCBRZgg/?t=1805) I mean, look, there's a lot of consumption, and I like that frame, too. It's like the consumption bucket to think about a lot of these different things. And I think there's consumption on prediction markets, a lot of traditional like financial markets. And that's not necessarily a bad thing. But so I agree with Scott. And I think the way I always think about this is let's think about why is insider trading banned in the first place? You know, some would argue, well, if you let insider trading happen in stock markets, shouldn't that make it even more accurate? But the reason it's banned, and actually in some ways we've tried this, is that what

[30:36](https://realalpha.app/v/J31lDCBRZgg/?t=1836) **Tarek Mansour:** happens is exactly what Scott mentioned is that like if you let insider trading kind of go loose people stop trusting the market and if people stop trusting

[30:46](https://realalpha.app/v/J31lDCBRZgg/?t=1846) the market did they stop trading like no one wants to participate or very few people want to participate in a game or a structure or a mechanism that is rigged like that is there is just like you know unfair so but but and so but but that's why we actually you know that first we are regulated there are rules against seller trading. So, you know, and these rules are very similar to the stock market rules and the mechanism of how we police it are very similar. And, you know, this has been a big topic of discussion and it goes... Back a little bit to the regulated versus unregulated situation. There are unregulated players, you know, and they are, you know, offshore. And there is, or at least allegedly, there is a lot of insider trading going on, like the Maduro trade that a lot of people have talked about. And, you know, that has brought kind of these issues into light. But at least on the cash side, like, we have a very strong position, which is we ban insider trading. Insider trading is not a good thing. It makes the marketplace unhealthy long term, and it creates an unfair field.

[31:41](https://realalpha.app/v/J31lDCBRZgg/?t=1901) Can I ask how you do that? Because I think in the stock market, insider trading laws are very, very strict. And anyone who's worked on Wall Street will know and will tell you just how intense everyone is about making sure. The problem is the executive who told the cousin who told the cousin, right? And that stuff does happen in the stock market. But we have such airtight definitions in the stock market and such airtight regulations, or you're shaking your head, as airtight as we could make them. Yes, sure. But the definitions are airtight here, too, and the regulations are airtight here, too. So please explain that.

[32:22](https://realalpha.app/v/J31lDCBRZgg/?t=1942) And I think it's an education thing. So it's a thing that over time we need to get there as an industry. And look, are they perfect? I don't think they're perfect. And I think there's work to do with regulators and policymakers, and that's something we're very committed to. But the, so how is it defined in the stock market, right? And, you know, let's just sort of attack that problem first. I think at a high level, it's defined as like, you cannot trade on material, non-public information, which is basically, let's make that even simpler. It's like, Ed, if you have a legal obligation not to disclose information that you have, that you have received, you cannot trade because trading is a form of disclosure, right?

[32:56](https://realalpha.app/v/J31lDCBRZgg/?t=1976) Disclosing information, you can, you know, one way to disclose information is you can call Scott and tell him. One way is go on CNBC and tell them, or you can trade it. And that's one way of disclosing it, right? That same standard applies to prediction markets. And our rules ban it the same way, right? So if you have information that you receive that you legally cannot disclose, you're not supposed to tell anyone, like you work at the BLS and the Fed, you're not allowed to release the report beforehand, you cannot go into the marketplace and trade it. And this applies to any of the other markets that we have.

[33:29](https://realalpha.app/v/J31lDCBRZgg/?t=2009) Isn't the reason that it's that it's there is a legal requirement not to disclose it because of the insider trading laws in the first place, which says you can't disclose this. And just to explain this for people, this came up in your interview with. NBC, where Andrew Ross Sorkin was providing to you the hypothetical, like, what if there's a dancer at the halftime show who knows what's going to happen in the halftime show? And there's no law requiring him or her to not tell someone about it. But then he or she does. And that seems to me to be insider trading. The stock market is not the only market that exists out there, right? We have markets on commodities you have market on rates we have markets on i mean we have all sorts of markets it's not like we add the stock market and then also in prediction markets happen but those markets also have rules around market manipulation insider trading and so on and so forth right so so yes there's some reflexivity i agree with you like that maybe the com like the companies in some ways the underlying got more strict about some of these things because of the existence of the market and this could happen in our market too it's possible right but like the the the way i

[34:40](https://realalpha.app/v/J31lDCBRZgg/?t=2080) describe it is like and by the way i do also want to address how we actually police it like how do we actually find so let's just finish a talk so let's finish the definition and let's move on to that but on the definition piece like if there isn't a problem with disclosing the information to people then there isn't a problem with disclosing the information to people you can trade it like you know and and and you know you could tell a friend who could tell a cousin and then that's completely fair game and that is not considered insider trading there's no issue with that and if people feel like hey maybe too many people may be around the stadium and can look at it they don't and they you know that's like an unfair market they would stop trade like they would just like you know if you over time feel like the the subset of information is too important or too prevalent like too deterministic for the marketplace and they would start trading like scott scott basically was saying um but but i think that the the line like you know you don't want to be in a position where you like block information because it is actually totally fair game to go and sit around next to a stadium and figure out what the next song is going to be

[35:39](https://realalpha.app/v/J31lDCBRZgg/?t=2139) and listen to rehearsal. That's like doing research outside of Walmart. It seems to me, my mind starts spinning around the different types of synthetic applications of this or different things you could use prediction markets for, whether it's hedging, existing positions. Can you give us some examples of different applications of prediction markets that people have not hit the mainstream yet? One example, you know, and every time around hurricane season, we get a lot of calls from people that live in the Keys and they want to basically buy our hurricane.

[36:14](https://realalpha.app/v/J31lDCBRZgg/?t=2174) **Tarek Mansour:** contract. They're buying a hedge against hurricanes hitting their city. And it's super interesting because historically what they do this is they go to state-regulated insurance, right? They go to

[36:23](https://realalpha.app/v/J31lDCBRZgg/?t=2183) the insurance company and the insurance company insures their home against a hurricane. But there's sort of like two issues with that. One, it's an inefficient marketplace. And it's a little bit goes back to how when I started the company, when we were like structuring these trades around Trump or Brexit, like there's one pricer, which is the insurance company. And you usually don't get a very good price and oftentimes they don't pay out the policy whereas having it in an open marketplace enables competitive bidding right so if ed wants to buy this hedge you know scott or other people can basically be you know competing for that market so you can get price improvement the number two issues for this specific like use cases like insurance companies have pulled out of the keys because they've had a lot of trouble and a lot of difficulty pricing hurricane risk it's been like a very difficult thing for them to put in their balance sheet. Usually they reinsure it with reinsurers, but reinsurers have pulled out of the market. And so this is a very good alternative that people basically go to. And we see this in a bunch of other places, like, you know, the Fed interest rates, inflation, geopolitical events, bills passing, where kind of regulation

[37:32](https://realalpha.app/v/J31lDCBRZgg/?t=2252) could negatively impact an industry or other. And we even see a lot in sports. I mean, sports, the reinsurance or insurance industry for sports is around $10 billion today, $9 to $10 billion today. And same sort of thing applies. So for example, there's a lot of teams that have big bonuses that are due at the end of the season if they achieve certain milestones. And a lot of teams like to insure against those performance bonuses. And they do it oftentimes with reinsurers, but the prices are really bad. And so now that they can basically offload it on an exchange, they get better pricing and they get more efficient pricing. They actually know what the fair price should be for this thing. And that's generally a good thing because it increases liquidity in the ecosystem for all these types of use cases.

[38:12](https://realalpha.app/v/J31lDCBRZgg/?t=2292) We'll be right back. And for even more markets content, sign up for our newsletter at profgmarkets.com slash subscribe. fam we're back with property markets my understanding is that uh your revenue 10x'd in 25 relative to 24. Are you assuming that same level or ballpark of growth in 26? 24 to 25, just to kind of talk about the number, I think we grew, it was closer to like 35, 40X, 24 to 25. And this is like on an FY basis, on an annualized basis, much more. It was maybe like 60. I think we could do, I don't know if 10X, but maybe half of that is I think within the realm of possibility for this year.

[38:59](https://realalpha.app/v/J31lDCBRZgg/?t=2339) it is pretty mainstream now right like it is very very mainstream i think like the so obviously as you get more in the stream the growth you know at some point i mean you know 45 percent of of people to up to the age of 45 of men up to the age of 45 are like basically active users of prediction markets now like like some part of them are trading pretty actively and the other part is like consuming consuming it as an information feed as a news feed to the use next to x and other places like that's a pretty large number right you're starting to kind of like flirt with i wouldn't say you're flirting with the boundaries but you're starting you know you start decelerating as you kind of get closer to the boundaries of the time um but yeah i think it's possible i mean I think, you know, we're growing it. The institutional business is starting to pick up traction. I think going international is exciting. Diversifying into more marketplace, markets, types of markets, and there's a lot of categories that are growing. So, you know, I think there's a lot to be excited about for 2026.

[39:54](https://realalpha.app/v/J31lDCBRZgg/?t=2394) Tarek, I've grilled you a good amount in this episode. I think, as we just close here, I would separate two things, as I said at the beginning. On the content, Calci and prediction markets as a content machine, as an information machine, I don't think it can be disputed. Everyone is looking at this stuff. Everyone is interested in this stuff. This is, by the way, one of the great things about markets in general. This is kind of why I love markets. It has this really awesome thing, which is that it tells you a lot about the world. You can look at a chart and you can understand things. It tells you about the future.

[40:31](https://realalpha.app/v/J31lDCBRZgg/?t=2431) This is the great thing. It's even a great thing about options trading as well. Options trading also is an interesting and helpful information machine, content machine. At the same time, I am personally someone who thinks that the act of trading options is not a good or wise investment decision most of the time. I would grant you that there are a lot of people who make a lot of money who ultimately are doing well. But ultimately, something I wouldn't recommend, I don't think it's great. Now, the law generally agrees, for the most part, which I think is why we have these stringent laws on things like gambling, on things like options trading, where we say, you're only allowed to do it if you prove this, this, and this.

[41:20](https://realalpha.app/v/J31lDCBRZgg/?t=2480) You're only allowed to do it if there's sufficient education. That's not true for gambling. Or for gambling, it would be, we need to express to you, and I mean, if you're advertising as a gambler, you need to say, you need to gamble responsibly. We kind of recognize that that is built in. You need regulation. Which brings me to, I view Calci as kind of the only platform in prediction markets that actually is embracing regulation. I think prediction markets are here to stay. I think the genie's out of the bottle. This is happening. So the thing that I think is really important for you, and I guess I'd want to hear more about, is how will you embrace the regulation that so many tech companies throughout history have tried to shirk on?

[42:08](https://realalpha.app/v/J31lDCBRZgg/?t=2528) because it eats into margins, it eats into your bottom line. It can be an annoying problem. How do you deal with that? I don't think of it that way. Look, I think, let me just address it in two folds. First, the model. You may or may not, you know, people may or may not agree whether trading on option is a good or bad thing. I strongly believe that trading on prediction markets is a good thing. And we've seen the results. People are being more engaged in the political process. They research different things. and you if you talk to our traders you see like it you know it brings them community like you know i i you know the going back to the joel example like i think one of his best men is someone who he's met in a prediction market in calci in our discord and i think there's a lot of like beauty that's coming out of these markets where like you're seeing this sort of like subjective debate that usually happens uh people insulting each other on twitter and you know this you know polarized on Instagram, happening more quantitatively, more objectively, in a more engaged way, more intellectually on prediction markets.

[43:10](https://realalpha.app/v/J31lDCBRZgg/?t=2590) And I think that's a good thing. I think we're not talking about like, when you have a position on something, you get more self calibrated. Like, you know, when social media is incentivizing clickbait, prediction markets are incentivizing truth, calibration, objectivity, the pursuit of truth. All of these things are good things. And I think over time, you know, when I think about people, like even, you know, when we think about like, you know, our generation, like we want people to value things like being accurate, being precise, thinking critically about the world. And I think prediction markets brings a lot of that.

[43:37](https://realalpha.app/v/J31lDCBRZgg/?t=2617) Our regulatory position.

[43:38](https://realalpha.app/v/J31lDCBRZgg/?t=2618) **Tarek Mansour:** So we spent four years getting regulated before we launched a single product.

[43:41](https://realalpha.app/v/J31lDCBRZgg/?t=2621) So the reason why you heard about Polymark and a lot of other, you know, Polymark is really primarily in other places, they just launched without a license, without anything else. We were committed to like, we'll get the license up front, no matter what. And let me tell you, like when I was 22, the idea of spending my 22 to 26 year olds just doing regulation and law and legal stuff without a product, I mean, it was horrendous. It was really difficult, but I'm very proud of that decision because it led to the outcomes that we're seeing now or we're leading in the market, but I want to build an enduring company. And I just don't see a way to build a financial services company. I can't talk about social media and other places, but a financial services company without proper regulation. I think it's not right. I think you need a regulator overseeing every step, where the money is going, reporting on transactions, everything needs to be public um uh but then you know i also think that like there are questions like the ones that we're discussing that you know over time we need to get better at solving and at Something as a company I can do alone.

[44:39](https://realalpha.app/v/J31lDCBRZgg/?t=2679) We need the regulars to work with us. Tarek Mansour is the co-founder and chief executive officer of Kalshi. Tarek began his career as a quantitative trader at Goldman Sachs. And as a global macro trader at Citadel, he went on to co-found Kalshi in 2018. Tarek, thank you very much. Appreciate your time. Thanks, Tarek. Thanks for having me. what'd you think again what did you think can i throw it back to you uh well you know me i don't i'm pretty quiet i don't like to share my viewpoint um just sort of reserved um i think they're trying to be the clean well-lit corner of this environment on. I mean, I struggle with the concept as a whole and the tension between you can't infantilize young people. Paul Tudor Jones, one of the great investors, will say that 80% of the stock market is speculation. That if you look at there's $3 trillion in transactions, it's like $300 billion of secondaries and equity offerings, true financing. So technically 90% of it is not investing. It's me betting against you that the stock's going to go up or down and you're taking the other side of that trade. So this isn't much different. But at the same time, it does feel like it has more of a gambling feel to it. So I don't have moral clarity around that. What I am absolutely

[46:09](https://realalpha.app/v/J31lDCBRZgg/?t=2769) fascinated by is the opportunity for... So I am a resident of Florida. Basically, Floridians are struggling with they can't get insurance. And it's not only you have to go naked in terms of risk, If you have a mortgage, a lot of, because the mortgage industry is in bed with the insurance industry, in order to get a mortgage, you have to show proof of insurance. And now homeowners in Florida can't get insurance. So is there some sort of synthetic where they basically, every time, you know, Hurricane Claudia pops up, they basically agree to buy or bet for you that this will hit. And if it hits, you get a bunch of money to cover your, you know, damage.

[46:52](https://realalpha.app/v/J31lDCBRZgg/?t=2812) I just think there's so many opportunities here. As you know, we are constantly using this information because as it ends up, the wisdom of crowds really is wise that this might put pollsters and investment banking. analysts out of business because the guy covering Apple for J.P. Morgan, J.P. Morgan wants Apple's next debt offering and is always going to exaggerate the upside or have a bias towards the upside. There's nothing to get to how you really feel about something when you ask people to put their money behind it. I hope that he does appear to be sincere about not embracing regulation, but at least being relative to his peers, he gets credit for embracing regulation as opposed to trying to skirt around it. So I think he gets some credit there. It'd be interesting to see if he, I thought it was 10X, he said 40 to 60X. Obviously, 26 is going to be a pivotal year for him. Anyways, my thoughts. What are your thoughts? I think you have to give him credit for wanting to comply with regulation. I think there are so many of these companies that the idea is Let's just skirt around as many rules as possible to make as much money as we can.

[48:04](https://realalpha.app/v/J31lDCBRZgg/?t=2884) That's not the route that he is taking. I do think he needs to get more clear on what are the lines that you're drawing here. What are the lines between speculation versus investing? What are the lines between speculation and gambling? These are hard lines to draw. It's not very clear. As you say, options trading, you can make the argument that the entire stock market, or at least 90% of the stock market, if you're not directly participating in the fundraising and investing in an actual company, if you're just trading the stocks around, maybe that's speculation, maybe that's gambling. I think it's a harder argument to make.

[48:42](https://realalpha.app/v/J31lDCBRZgg/?t=2922) But the point being, there needs to be a lot of clarity on what are the definitions between these different things. Because what I can tell you is that betting on, say, the color of the Gatorade is flat-out gambling and there is no real benefit to society other than it's fun and it's a form of consumption. And if that is the case, and if that is happening on the platform, he says they didn't do that, do the Gatorade on the platform, but maybe there are some others. If that is the case, you got to regulate it like it's gambling. You got to have disclosures. If you're going to advertise, you need to say, gamble responsibly, trade responsibly.

[49:22](https://realalpha.app/v/J31lDCBRZgg/?t=2962) The same way that we have real robust regulations around any other addictive product, around cigarettes, around drinking. I mean, the rules are there in place because bad things can happen. And so, what I would love... for Tarek, and I think he's doing this better than anyone else in this industry, which is happening. Sorry, it's happening, whether you like it or not. He is embracing that more than the others are. And I think that is going to be crucial to minimizing the very real potential for downside risk here when it comes to speculation, addiction, and gambling. Because unfortunately, that is happening on these platforms so now it's on regulators to figure out how to make sure this Prof G Markets from Prof G Media. If you liked what you heard, give us a follow and join us for