huge polymarket scandal

Today I talked to two journalists who ran two massive investigations you'll hear about almost nowhere else.The Wall Street Journal, Politico, both talking about how Polly Market has been running deceptive ads.They're hyping up the odds of your success, many times not disclosing that they are paid to do so, and even worse, a lot of the trades are completely fake.Not only that, these investigations heavily imply that Polly Market knew and and facilitated a lot of this deception, even going so far as to create a fake website for these people to put their fake bets on.And I really was like, well, why aren't more people talking about it?And then I realized, oh yeah, because so many people are on the take from the prediction market industry.

They aren't exactly unbiased sources.They're making money from this industry.They have a vested interest in making it look as good as possible.You have huge celebrities like Rick Rubin, like Timothy Chalamet.You're going to hear about it from the news.Oh, sorry.

Well, CNN actually has a prediction market partnership with Kalshi.You're going to hear about it from Fox News.Oh no, actually they have a prediction market partnership with Kalshi once again.to hear about it from the Wall Street Journal.Well, actually, yes, but the Dow Jones is actually partnered also with Polymarket.This is a fun fact that was brought up to me by one of the journalists who wrote the story as a line of disclosure they had to make.

You run this incredible piece of hard -hitting journalism only to find out your parent company has a partnership with that company.Now, credit to them for reporting it.You know, it's a huge bombshell.Obviously, Polymarket is probably not happy with it at all.And basically, the central finding is all around not justfake bets, but all these videos that were going out showing people making a ton of money.

It turns out it was happening a lot of the times on a fake website that Polly Market set up.So I'm gonna have you watch a few of these videos and notice the URL.

Bro, what?Will Trump say April Fool's this week?4 %?Bro, what?

Yeah!Say McDonald's in January.

Now there's a lot more videos just like those.The general format is they make a long shot bet, get paid out a ton of money.Isn't that so wonderful?And if you look at the URL, it very clearly says Polly Market, or at least Well, that's what I think that says.I'm zooming in.It looks like Polly Market, but the Wall Street Journal says it's a different website entirely.

We have spoken to people who have told us that Polly Market created this website.This website, Polly Market, was made by Polly Market.

I didn't just have an aneurysm.I just heard Polly Market.

This is at least what we have called it.PolyMarket has created this program where they have told college -age creators to film content promoting the website, and as part of that, they should film themselves making trades.Now, to film these trades, PolyMarket, our reporting shows, created a fake website called PoiMarket, or at least that's what we are calling it, but it's P -O -I -Y Market.And when the I is capitalized, it looks exactly like the real thing in terms of the But when you look at the actual website where the trades are being placed, there's a bunch of discrepancies that we found which led us to realize that a lot of these bets that are being placed weren't actuallyon PolyMarket's websites.They're on this fake website that PolyMarket gave creators access to to go and make what looked like real bets.

Guys, to state the obvious, I don't know who thought of this.One, diabolical.Two, I mean, dude, I cannot tell.I spelled, by the way, one with an I, one with an L, but I forgot which one I spelled with an L. And I literally, looking at it right now, I just wrote this.I can't tell the difference between the two.Those are not the same URL.

And that was the cheat code they were basically using, was giving the creators the one where it looks like, you know, when you're taking the cell phone cam of your browser, it's gonna show the actual browser.And so it looks like, oh, Polymarket, you're actually at their secret poymarket .com, where they were running a simulated version of the website to do fake trades for fake bets so it looks like they could get rich.Uh, you know, wait, which is fraud, by the way.I mean, you know, that's my personal opinion.I mean, I don't think you can just deceive people into thinking, oh, that's a real product video when it's a complete fake.

Oh, it's so easy to get rich.Like all these guys trading, look at all these college aged people like you get in our app early, right?While you're young, while we can get you hooked into our platform.And actually the truth of the financial impact of these trades is much different than what they tell you.

Yeah, there was 118 bets that appeared like the person won in the video, and more than half of those would have lost in real life.And if you look at the amount that people were supposed to win, one that was paid out, if you replicated all of those trades, you would have lost $166 ,000.

So, it turns out if you actually did all these get -rich -quick bets that are looking like many times they're actually paying out on these social media videos, you'd actually be in over $100 ,000 of debt, which is more than a lot of colleges get you into.which is, which is crazy because college is the big, big debt trap.And it turns out that these people who are trying to present this old college side hustle are presenting you with an even worse debt trap.It's also, Hey, why not spin up a gambling addiction while you're at it?And of course, the reason to spin up that gambling addiction, the possibility of great riches was a farce.It was a smokescreen of advertising.

Now, maybe you're thinking, look, Hey, Steven, get real.This is what casinos do.And that's exactly the point.For a long time, for years now, the playbook of this industry, prediction markets, has been they're not casinos.They are event contracts.They're not gambling.

They're hedging economic exposure.It's not a parlay.It's a combo, right?They have all these euphemisms for everything, but it turns out when you actually look under the hood, like they're doing all the same things, including by the way, the marketing playbook, which yes, has been fake bet slips, fake influencer winnings, influencers pretending, you know, they're making all this money.And then on the most dastardly side, even the platforms themselves getting involved with the deception, which appears to be what the wall street journal is alleging here.Polly market setting up this poi market itself.

Now maybe you're wondering, well, did they really know?You know, they actually made a statement saying, quote, the company says it plans to conduct a comprehensive audit of active promotional content.Guys, they're going to investigate themselves.But now's where we turn to the Politico story.This was once again about a lot of undisclosed promotions this time instead of college students It was a lot of like progressive and conservative commentators that they caught on the take many times undisclosed promotionsBut what's worse about this one is who's doing the paying.

It turns out it's the company's chief marketing officer, Matthew Madaber, who used a personal PayPal account to send money to content creators.Now Why does it matter that the CMO is getting involved with particularly paying people?Well, again, they claim like, oh, you know, we're trying to improve trust.We're going to do a comprehensive audit.Well, that all has to imply that they didn't know about this fake website, right?At the highest level, oh, this is just some rogue intern somewhere.

So what does it look like when the CMO is involved?

We found that he was using a personal PayPal account to send money to all kinds of influencers and we were able to verify the identities of about two dozen influencers who all combined were receiving hundreds of thousands of dollars of payments from this PayPal.

Not disclosed.Like many of these people's their audiences had no idea that there were these posts and they didn't know they were basically paid to promote either the Trustworthiness of polymarket to promote certain mayoral bets to promote, you know, different event contracts, whatever you want to call them.But you know, it's kind of funny.The thing that I've been thinking about is these are companies that purport to be about truth, right?They say they are better engines for truth.And yet, this is deception right at the heart of getting in the front door.

Yeah, the FTC has rules around advertising disclosure for precisely this reason.They want people who are seeing paid promotions to know that these are paid promotions.And our data team did an analysis of the posts from all of the influencers that we identified.And during a 14 -month span, we found that they posted at least 490 times on X without disclosures about polyorchid.

So yeah, the CMO didn'tnotice that.The CMO didn't notice all these people he's paying from his personal PayPal are not disclosing it's paid at.And so Polymarket knew, hey, it's better engagement if these people don't say they're paid by us.It looks better as some organic thing, right?So that's what you see over and over again.

Once again, the casino playbook, but forever they've been denying the allegations of, we see it time and time again.and these two investigations brought it all together.You have the fake betting website and then you have the CMO directly involved with a lot of these partnerships that are not disclosing these advertisements.Now, of course, I don't want to leave you with the impression that Polymarket is the only one who might have done activity like this.They're just the most credibly accused right now.To be clear, this industry is extremely competitive.

Everyone's trying to jump in, trying to use growth at all costs to start it.You know, the king of steal your idea, Mark Zuckerberg, has recently directed Meta to create a prediction markets app.And you know, Mark Zuckerberg knows a good platform idea for exploiting teens when he sees one.I mean, wow, he must be lighted out with this idea.Right now, the New York Times claims users would not wager money and the apps would probably rely on video game points, although the company has not ruled out the eventual use of real money betting.Let's be honest, we know where this is headed.

Even the president himself, you know, truth social, I think they're starting a truth predict or they're trying to.You've got the president's son, I believe he's some type of advisor for Kalshi, which The CEO, of course, she was actually asked about, like, why would you actually bring on this guy?What experience does he bring?And the answer there is pretty priceless.

Why did you guys make Donald Trump Jr. a strategic advisor?

We have a lot of advisors, and they span across the board, across different functions.But really, this is all about growing this industry, the prediction market industry that a lot of people really believe in.

What kind of advice does he give you?

So it really is, again, about growing prediction markets.

Does he come to meetings?How much do you pay him?What's his role?I mean, this is the son of the president.

I mean, we have a lot of advisors.

He's not just any advisor.He has a direct line to the White House.

We have a lot of advisors.

Yeah.The reality is people are going to do anything to grab as much of this market, uh, as they can, which is essentially like casinos, but legal in all 50 States and on your phone.I mean, that's, that's basically the pitch.There's obviously going to be a lot of money and people are willing to kind of do whatever it takes, but of course that begs the question.Well, if that's the case, then we need to rely on regulators in order to stop the excesses of people trying to grab as much money as possible.And, you know, there are rules in place, as Maya, the reporter, actually talked about.

There's the FTC guidelines.You are not supposed to promote something and not disclose it.Of course, that's what a lot of people have done.So I wanted to know, like, do these reporters believe that something's actually going to happen here?

We did ask the FTC about what we found.We presented a summary of our reporting and we asked, is this something that would fall under their rules?And they didn't respond to any of my follow up emails.So my Indication is I really don't have that much insight into what they're thinking about this, if at all.Generally, these agencies, if they do have investigations, they're not confirming those to reporters while they're open.The silence, I think, was pretty deafening when we reached out to them.

Honestly, no idea.It's really weird being a journalist these days, and really at any point in history, because you never quite know what the public reaction will be.We haven't heard anything specific from the CFTC, but also generally government agencies don't comment on if they were going to do investigations into much of anything.If they want to investigate, that is their right.but we haven't heard anything.

Well, at least they're honest.We don't truly know what's going to happen.Although personally, I'll just give my opinion.I don't think they're going to be investigated for this poly market.I don't think, you know, any of these prediction markets are really going to get meaningfully regulated.And I think that's a bad thing for everyone else.

And specifically, I hope this video has shown if somebody is telling you otherwise, I would ask the question, are you paid?Because even if they didn't disclose it, does it mean they aren't still on the payroll?Big thanks to the two reporters who spoke to me from the Wall Street Journal and Politico today.I'll leave their article below as well as their co -authors and thank you so much for watching.