Prediction Markets: Last Week Tonight with John Oliver (HBO)

Our main story tonight concerns prediction markets, the fast-growing platforms where you can bet on basically anything, as this TikToker explains.

I've been making a ton of money on this app that lets you bet on anything in the world. I bet that GTA 6 won't be released on time. I bet that Trump would pardon Young Thug this year. I'm predicting Delta Airlines will be the first airline to sell Zin on their flights. I made money off Trump being elected president and because Kamala Harris didn't go on Joe Rogan's podcast. When I was in New York, I bet that it would rain

and it did, so I won money. I bet that Justin Bieber will go to the Diddy trial. When I was in Chicago, I bet on the temperature and won.

Okay, shout out to thatan, but the back half is 100 percent suburban mom. Potential reign, the temperature, grizzly celebrity trials. Cade, you can wager on anything from, will traffic in the Strait of Hormuz return to normal by the end of April, to will the U.S. confirm that aliens exist before 2027?

These markets have seen exponential growth in recent months, logging billions of dollars in bets every week. You may have heard about them on the news, or seen ads, or stumbled across influences like this guy, who is constantly updating his followers on how his various wages about the Trump administration

are going. And I'll warn you, it's a real roller coaster.

China question.

Cheese!

High-end video chips to China.

But The Wall Street Journal reported yes.

Ooh! My hero!

The president has made his position on this very clear, both to the Chinese, that's not something we're interested in selling to China. Yes!

Yes! Yes! Barack Hussein Obama.

Yes!

Barack Hussein Obama!

Getting rich off Jeffrey Epstein.

All the files dropped?

Yes! Is Donald Trump named in the files? They're all redacted?

Yeah.

A lot more screaming than you thought there, huh? And it's kind of amazing to witness someone absolutely furious that Trump's name was redacted?! Yeah. A lot more screaming than you thought there, huh? And it's kind of amazing to witness someone absolutely furious that Trump's name was redacted from the Epstein files for a completely different reason than the rest of us. The point is, a lot of people are getting into prediction markets,

thanks in part to an aggressive marketing push by the two big players in this space, Kaoshi and PolyMarket. Kaoshi recently locked in a 22-billion-dollar valuation from investors, doubling its valuation from just a few months earlier,

and PolyMarket's currently trying to do the same. Meanwhile, dozens of new entrants, like Coinbase, Robinhood, and even Truth Social, are also trying to get in on the action. It is shocking the extent to which prediction markets have proliferated, and sometimes it's been a little unnerving,

given the things that you can now bet on.

Ali Khamenei out as Supreme Leader of Iran.

horrible things like that, like... That's really dark to me.

And how on earth is any of this legal? of prediction markets on news events is nothing new.

many leading polls.

on future events, hoping it could help predict events in the Middle East.

and voiced their disgust. This betting parlor on the internet

will include wagers, for example, as the...

would include, will Mr. Arafat be assassinated?

Will there be missile attacks from North Korea?

just as an example?

I think this is unbelievably stupid.

It's not only... It is...

that is so devoid of value.

in my judgment.

betting on geopolitical events

As we all know, the only groups that society's decided

and move certain operations offshore. And it wasn't, hey, you're banned from trading in the US. It's like, until you're licensed.

I mean, it was breaking the law.

I mean, people say breaking the law, it's like, which law? So if anything, it's incompatible.

It's incompatible with the law.

Yeah, with the regulatory matrix that existed.

Look, incompatible with the law is clearly ridiculous, but please don't overlook the line, people say breaking the law, and it's like, which law, you know?

I'm sorry, what?

I'm pretty confident there is a specific law you broke, given, you know, you paid a 1.4 million dollar penalty. Regulators weren't just like, shit, he just asked which law. Oh, uh, the Chinese Exclusion Act of 1882. From the start, PolyMarkmarket took an extremely libertarian approach, allowing users to use crypto to bet anonymously

on things like war. And while it's currently rolling out a new app to U.S. users that does have government approval, it is way more limited and mostly offers trading on sports. The vast majority of its business is still done on Polymarket's international version,

which is based offshore in Panama,

invented by someone who wanted to make children suffer. to write that letter makes you want to fucking do. But regardless of how these companies got to this point, about a year and a half ago after this happened. And while it is not the most important thing,

I have ever seen in my life.

Indiana got that dog in them! Will egg prices go up this month?

I think we'll hit $20.

How many hurricanes do you think we'll have this year?

Ah!

Kelshi!

Kelshi!

Kelshi!

Kelshi lets you legally trade on anything, anywhere in the US.

OKC!

Indy! OKC! Kelshi! OKC! OKC!

Okay, that visual cacophony is an AI slop atrocity. It contained two alligators, four shirtless or nearly shirtless old guys, one egg freak, three different people being pursued by the police, one woman I'm kind of rooting for,

one USDA inspector's fucking nightmare, and one alien seemingly rooting for Duke,

fuck empathy, get money, Cali.

And at this point, you might be thinking, wait, isn't that an ad for a gambling site? They argue that gambling involves playing against the house, with the companies typically just charging a fee on trades.

or that the U.S. government will shut down. Here is how Khaushi's CEO frames it.

are gonna be forgiven or not this year. And so a lot of people were hedging using that market. that they could use to basically pay the student loan.

sober risk management feels absurd.

and if you had a moron like Kamala, or a moron like Sleepy Joe. Yeah! Let's go.

Bang!

There we go.

Bang!

Number one, Sleepy Joe.

That's a hit.

We're looking good so far.

Easy, bro. OK, all right, all right, all right.

We made about $200.

OK, all right. Alright, alright. We made about 200 bucks. Okay, alright. 200 bucks. Men playing in women's sports.

Wait, wait, wait.

Transgender.

Hey! Hey!

We are off to a great start.

Yeah, we hit on that shit immediately.

Sleepy Joe, transgender.

We got Sleepy Joe as transgender in like the first five minutes, bro.

Bro, we're up like 500 bucks.

We gotta make a thousand. Yeah, we gotta make a thousand. All right, all right.

Nature has lost its course.

and it is pretty telling. That while political mentions markets like that of trading volume on Cauchy is on sports.

But you can see why these companies are so insistent

have some form of legalized sports betting.

like California and Texas on the table. offering not bets, but event contracts,

in states where it is.

on the future. And that is so dumb, it is almost charming. It's like seeing a sign outside a strip club that says, girls, girls, girls. And then seeing the manager come out and say, we meant girls, girls, girls who code. We support women in STEM.

Sure you do, buddy. Nice try. But these companies' insistence that they are not gambling platforms That's a very nice try. But these companies' insistence that they are not gambling platforms is actually one of the two most irritating claims

that they tend to make. The other is that they're actually incredibly important to society, because they can help us more accurately predict the future. The head of PolyMark has even called it the most accurate thing we have as mankind right now, and has bragged that the predictions it generates

can save lives.

When I get hit up by people in the Middle East who are saying that, hey, you know, we're looking at polymer to decide whether we sleep near the bomb shelter. Like, we look at it every day and I'm like, oh, it's really that popular? Like, are you kidding me? Like, do you not even know what's going on?

Like, everyone's relying on this. Um... That's very powerful. That's like a... you know, an undeniable value proposition that did not exist before.

Hey, quick question. What exact stage of capitalism are we in when the child CEO of an offshore gambling platform refers to betting odds on bombings as an undeniable value proposition? Because it feels like we're in palliative care

at this point. But I guess that is the point you reach when you're a 27-year-old billionaire surrounded by yes-men who will never tell you the truth, something I know for sure, because no one in his life told him never to ever wear that jacket. Which, when he is sitting like that,

unmistakably says, -"Peed Rider." -$PID. Though, for all the talk of these sites' unparalleled accuracy, you should know that's a bit of an oversell. They have shown promise in some areas. A recent paper found Cauchy's predictions were roughly consistent with those of professional forecasters

when it came to the economy and Federal Reserve policy. But, they've also had some big misses. For instance, both favored the Chiefs to win last year's Super Bowl, and also whiffed the recent Texas Republican Senate primary, with Polly Market even posting a breaking alert that morning, announcing Ken Paxton was projected to win,

with their odds giving him an 83% chance, and you know, he didn't do that. And look, all of that would be fine. These are just odds, and real life can defy odds. Were it not for the fact that these companies are actively selling themselves as basically oracles.

And they've even tried to bolster that reputation by entering paid partnership deals with news organizations. Dow Jones, parent company of the Wall Street Journal, announced a partnership with Polymarket earlier this year, while CNN, CNBC, and Fox News all signed deals with Cali, which even sponsors segments on CNN

that feature Cali's odds on various future events scrolling across the bottom of the screen. And I do not want the CNN ticker to have betting odds on news events. I don't really want anything on there, except maybe the odd, distractingly weird headline that takes my mind off things for a second.

You know, something like, -"Giraffe Escapes From Zoo, Please Say It Has A Gun." You know, something fun to Google later. But having their logo like that on CNN is a big win for Kelshi. Just as it's a big win for them to have influencers

like that guy from earlier saying how easy it is to win money. Though, you should know, after we asked, Kelshi told us that they paid him for that post. And it feels like deals like those should really be more transparent. It makes me a little annoyed, and to be honest,

even more hungry. And you know, when I need something nutritious yet in a can, I know where to turn. Bush's baked beans. But full disclosure, I was paid $40 to say that. Thing is, it's worth knowing that in reality, as with sports books, researchers have found that most users of Kaoshi and PolyMarket lose money.

As we've discussed before, casual gamblers are always going to be easy prey for more sophisticated operators with advanced systems to give them an edge, which is probably why. While Polymarket has more than two million users, one analysis found more than two-thirds of all money won on it

was held by just 740 accounts. And if you're thinking, how exactly are these companies getting away with all this? Well, a lot has to do with who is in the White House right now. Both companies have fostered strong connections with the Trump family. In fact, Don Jr. is both

an investor in and an unpaid advisor to Polymarket, and a paid advisor to Kaohsiung. Look, I am not saying that Don Jr. isn't providing important or valuable insights, although... in a much truer sense, I very much am saying that. I'm just saying, it's notable just how hard it was

for Kaushi's CEO to answer a series of basic questions about Don Jr.'s role.

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

We have a lot of advisors. Mm-hmm. Um, and they span across the board, across different functions. Um, 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. You know, he believes in prediction markets, we believe in prediction markets, a lot of people believe in prediction markets, and it's really about go-to-market and expansion plans. Does he come to meetings?

How much do you pay him? What's his role?

I mean, this is the son of the president.

We, again, I mean, we have a lot of advisors, and whether it's our investors, whether it's people that we really trust and respect,

whether people... He's not just any advisor.

He has a direct line to the White House. We have a lot of advisors. Yeah. Turns out, it's pretty hard to justify

hiring a nepo baby, or in Don Jr.'s case, a nepo-divorced dad. But the thing is, if hiring Don Jr. helped get these companies on Trump's good side, it's a bet that's paid off massively for them. Because while the Biden administration

had at least tried to rein in some of what these markets were doing, the Trump administration has gone hard in the other direction. And to understand the degree to which that's the case, take a look at the CFTC, or Commodity Futures Trading Commission.

It regulates these platforms. And it was actually empowered under the Dodd-Frank Act in 2010 to block event contracts about terrorism, assassination, war, and gaming. You know, a bunch of what you've seen so far tonight.

like he promised, C-League posted this video. To those who seek to challenge our authority in this space, let me be clear.

We will see you in court.

What a fucking weasel.

to manipulate the outcomes.

the CEO of Coinbase said this.

on their next earnings call, and I just wanna...

Bitcoin, Ethereum, Blockchain, Staking,

before the end of the call.

And it really feels like manipulating betting outcomes

should be more difficult than that.

in the English language.

that there was betting happening around this show.

in front of a studio audience, all of whom

before we let them out of the taping. We try to erase only the last couple of hours, but sometimes we do wipe clean a milestone birthday. That's on us, and we're constantly calibrating the technology. You've been warned, you won't remember,

but you've been warned. And there are markets where it is way too easy for anyone to manipulate outcomes. Just last summer, you might remember a bunch of assholes started throwing dildos on the court during WNBA games to promote a crypto meme coin. And if that wasn't already a cursed enough sentence, I'll let this South African man fill you in on what happened next.

Did you know you can actually bet on whether a dildo will be thrown at the WNBA game on August 9th, August 11th, that's today, and August 12th, right here on Polly Market. I had no idea. Actually, I had no idea what the WNBA was either

until, you know... You could place a bet on whether a dildo would be thrown at it.

Yeah, none of that is great. And it is pretty depressing that the way he learned about the existence of the WNBA was finding out you could bet on whether a dildo would be thrown at one of its games. It'd be like finding out about the existence

of Robert De Niro by Googling the cast of Dirty Grandpa. Oh, no. No, not like this. Don't learn about him like this. But it is true. People started betting whether dildos would be thrown again,

and Polymarket even put up this tweet promoting the bets. And sure enough, more dildos got thrown. And that could well have been because Polymarket had just created a situation where you could easily make money by betting someone would throw a dildo and then going to a game with a dildo and throwing it. There have also been multiple instances of people seeming to use inside information

to game these markets. Last year, a trader made over a million dollars with a series of accurate bets about Google's rankings of its most searched people of 2025. That same person, by the way, had also earned over $150,000

by correctly predicting the exact release date about Google's rankings of its most searched people of 2025. That same person, by the way,

had also earned over $150,000 by correctly predicting the exact release date of Google's Gemini 3 model. Which really makes you think that person either worked for Google,

or knew someone who did,

or maybe managed to hack Google from the outside,

that much stronger.

Yeah. So, it goes back to this idea of information markets, right? Like you think about when will Gemini 3 launch? Nobody is under the impression that nobody knows the answer, right? Like of course there's people who are working on it who know when it's gonna come.

And I think what's cool about PolyMarket is that it creates this financial incentive for people to go and divulge the information to the market, and the market to change, and all of a sudden, it's trading at 95 cents, and people are like,

-"Oh, I mean..." -"You mean, when you say divulge, you mean the people who actually know?"

Yeah, or if someone tells someone, and then the market responds.

Yeah, he basically just answered the question, against insider trading there with no. And he did it... with a fashion choice somehow even worse than his biker jacket, because what in the NYU army fatigues is that shit? That sweater looks like it was made from illegally poached grimace. But also, I don't care how many statement sweaters you wear, or how many Ben Platt and Dear Evan Hansen haircuts you have,

you're not describing some edgy, chill way to divulge information to the market. You're describing insider trading. And it gets genuinely chilling when you realize that people seem to be using insider info to bet on life or death events.

In January, after the U.S. seized Nicolas Maduro, an anonymous trader pocketed more than $400,000 off bets that that would happen, with the bulk of those bets made mere hours before the raid was announced. In February, two Israelis were charged

with using classified military information to place bets on polymarkets, and in March, this happened.

Deadly American strikes, and some people may have made money from them. More than a dozen anonymous accounts placed bets predicting that the United States would strike Iran by Saturday, the 28th of February. Most of those wages were placed in the hours before the first bombs fell. And many of the accounts had been created only days earlier. One of the biggest winners used the account name MagaMyMan. The trader

placed $87,000 on a war with Iran exactly 71 minutes before the first strike, winning a jackpot worth $515,000.

Yeah, that sure feels like someone with inside information was betting on PolyMarket. And I'd say that it wasn't a great idea to make their username Magabuyman, except it doesn't seem to matter anymore, does it? His username might as well have been Magabuyman,

just kidding, my name is Dylan Barthwell and I work at the Department of Defense. He's not really risking much. Now, I should say, Kaushy just announced it took action in two insider trading cases and has taken out billboards bragging that it bans insider trading

and also that it doesn't offer death markets, which is a little weird. It'd be like McDonald's putting up ads that its nuggets don't contain baby meat.

-♪ ♪ -♪

Okay, Mama, but now I have way more questions.

-♪ ♪ -♪

For its part, Polymarket recently updated its rules to clarify that users can't act on stolen confidential information, wager using illegal tips, or bet if they're in a position to influence the outcome of an event. Although, it is not a great sign that just recently, there was a suspicious spike in trading right before the ceasefire with Iran was announced,

as a group of new accounts on PolyMarket made highly specific, well-timed bets about it, earning hundreds of thousands of dollars. So it sure seems like right now, we've effectively got gambling sites operating even in states where gambling is illegal,

and offering bets on things that there have been laws against for over a decade now. So, what can we do? Well, at the bare minimum, the CFTC should be doing more. And while it says it's writing new rules, I wouldn't expect much, especially for as long as this fucking guy is in charge.

-♪ ♪ -♪ ♪ for as long as this fucking guy is in charge. As I said earlier, there are a bunch of cases making their way through the courts right now, but it's not clear how they'll resolve, and it's probably going to be in front of the Supreme Court. Meanwhile, Congress is considering a number of proposals tackling aspects of this issue, although, given that the President of the United States

has a kid currently advising both major companies, I wouldn't hold your breath. So, meaningful policy shifts in the near term do seem unlikely, but at some point, we do need to put in place some basic guardrails here. And until then, if we can't change how these sites operate, we should at least try and change

how we individually see them. One thing that would frankly help is if news organizations stopped laundering these companies' reputations for them by putting their odds on screen like they are actual news. Because is it a bad idea for them to be doing that? If I may quote the single loudest man in the world...

Yeah! Yes, exactly. I couldn't have screamed it better myself. And look, on a personal level, if you're considering using these markets to gamble,

to lose money.

And while I am not against gambling per se, Because sure, money can be won on them,

I will never do anything because someone online placed to move a market. That is why I'm gonna make you a promise tonight. I will never do anything because...

And once you have that trust, you can feel secure in the knowledge that if a dildo ever lands on this desk,

And if more than one dildo lands, it's only because a fundamental rule of comedy is more dildos is more funny. And if it turns out there are too many dildos flying through the air, I promise it will only be because we didn't know how many to buy because we didn't know how many to buy

and now we're sort of screwed