No Mercy / No Malice: The Next Opioid Crisis

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0:01:31 Support for this show comes from the Audible original, The Downloaded 2, Ghosts and the Machine.
0:01:34 The Earth only has a few days left.
0:01:39 Roscoe Cadulian and the rest of the Phoenix Colony have to re-upload their minds into the
0:01:39 quantum computer.
0:01:45 But a new threat has arisen that could destroy their stored consciousness forever.
0:01:51 Listen to Oscar winner Brendan Fraser reprise his role as Roscoe Cadulian in this follow-up
0:01:54 to the Audible original blockbuster, The Downloaded.
0:02:00 It’s a thought-provoking sci-fi journey where identity, memory, and morality collide.
0:02:05 Robert J. Sawyer does it again with this much-anticipated sequel that leaves you asking,
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0:02:25 I’m Scott Galloway, and this is No Mercy, No Malice.
0:02:30 Prediction markets are booming as users trade on the outcome of future events.
0:02:36 With these marketplaces moving toward the mainstream, the risks are rising.
0:02:40 Gambling has a new name, as read by George Hahn.
0:02:53 Today, you can trade on the outcome of thousands of future events, from the Fed decision next
0:02:56 month to the Grammy Awards in February.
0:03:02 Without leaving the house, you can wager on Taylor Swift’s wedding or Time Magazine’s
0:03:03 Person of the Year.
0:03:11 One of Kalshi’s MIT-trained founders says their platform is like the stock market, but
0:03:16 instead of buying and selling companies, you’re buying yes or no on whether something is going
0:03:17 to happen.
0:03:25 The Gen Z billionaire at the helm of Polymarket touts his exchange as a global truth machine.
0:03:30 These platforms do harness the wisdom of the crowds.
0:03:40 America was built on risk and speculation.
0:03:47 The country could fairly be described as a casino economy, however, and prediction markets,
0:03:52 alongside crypto, options trading, and sports betting, are taking it to new levels.
0:04:01 Weekly volumes for Kalshi and Polymarket breached the $2 billion mark for the first time in October,
0:04:05 surpassing the peak reached during the last presidential election.
0:04:08 Then came the New York City mayoral election.
0:04:13 As residents headed to the polls, they saw billboards flashing the odds.
0:04:16 Mamdani 94%, Cuomo 6%.
0:04:24 With the race over, we can now bet on the likelihood of city buses becoming free before 2027 or rents
0:04:24 being frozen.
0:04:33 Leveraging its popularity, Polymarket is in talks to raise money at a valuation of $15 billion.
0:04:39 Kalshi is attracting offers from VC investors, valuing it at $10 billion.
0:04:45 Amid the mania, these platforms are moving deeper into the mainstream.
0:04:52 Robinhood, the stock trading app, is expanding in prediction markets with Kalshi as a partner,
0:04:56 declaring it’s the fastest-growing business it has ever seen.
0:05:02 Google struck a deal to integrate odds from Kalshi and Polymarket into its search results
0:05:06 so you can ask questions about future market trends.
0:05:11 The owner of the New York Stock Exchange agreed to invest up to $2 billion in Polymarket,
0:05:15 which is preparing to return to the U.S. after being kicked offshore.
0:05:23 Andual is joining with derivatives exchange CME to launch a new platform,
0:05:27 allowing it to bypass restrictions in states where gambling is illegal.
0:05:31 Sports leagues are also getting in on the action.
0:05:37 In October, the National Hockey League signed agreements in the U.S. with Polymarket and Kalshi,
0:05:39 naming both official partners.
0:05:45 Kalshi’s CEO said it’s a clear sign prediction markets are here to stay.
0:05:50 Many people seem to have forgotten about Alex Kearns.
0:05:52 I haven’t.
0:05:54 I remember staring at his photo,
0:05:59 a 20-year-old with a big smile and a fascination with the markets,
0:06:01 and seeing my oldest son.
0:06:11 In 2020, after receiving incorrect messages saying he owed the online trading platform Robinhood $730,000,
0:06:13 he owed nothing,
0:06:16 the University of Nebraska students spent much of the night
0:06:18 desperately trying to get in touch with the company.
0:06:20 The next morning,
0:06:24 he left a note for his family saying he didn’t want to burden them with this debt.
0:06:26 Then he took his own life.
0:06:30 That should have been a wake-up call.
0:06:31 Instead,
0:06:33 America has doubled down.
0:06:38 The operators have drawn legal challenges from state authorities.
0:06:42 The Massachusetts Attorney General sued Kalshi,
0:06:48 arguing that the company disguises sports betting as event contracts,
0:06:52 which are regulated by the Federal Commodity Futures Trading Commission.
0:06:57 In states where sports betting is off-limits,
0:07:02 customers are turning to prediction markets to invest in sports.
0:07:07 Sports books mostly restrict access to people under 21.
0:07:12 Prediction markets are available to anyone 18 and up.
0:07:17 Don’t count on the Trump administration to intervene.
0:07:20 A week before Trump returned to the White House,
0:07:23 Kalshi named the president’s eldest son,
0:07:24 Donald Trump Jr.,
0:07:26 as a strategic advisor.
0:07:28 Days later,
0:07:30 the company publicized its entry into sports betting.
0:07:35 Now Trump’s social media company is launching TruthPredict,
0:07:41 allowing users to bet on events ranging from elections to inflation rate changes.
0:07:46 America’s pastime isn’t baseball, but gambling.
0:07:54 We spend 10 times more on gambling than music, Netflix, and cinema combined.
0:08:01 20 million Americans struggle with or are at high risk of developing an online gambling problem.
0:08:04 Young men are especially vulnerable.
0:08:07 Men are more susceptible to gambling than women,
0:08:10 just as they’re more likely to engage in illicit drug use,
0:08:14 drink excessively, or die of opioid-related overdoses.
0:08:19 Gambling has the highest suicide rate of all addictions.
0:08:21 When you have a meth addiction,
0:08:22 people notice.
0:08:24 The sores, tooth loss.
0:08:27 When you’re gambling and you’re in deep,
0:08:31 you lose your kid’s college fund or mortgage the house,
0:08:33 but your struggles remain hidden.
0:08:37 The Supreme Court’s decision in 2018
0:08:40 to overturn a federal ban on sports betting
0:08:42 has fueled the nation’s compulsion.
0:08:44 Before the ruling,
0:08:49 Americans legally wagered less than $5 billion on sports annually.
0:08:51 Last year,
0:08:56 with sports gambling legal in more than three dozen states and D.C.,
0:09:00 those bets ballooned to $160 billion.
0:09:05 The mediums shapeshift to distract,
0:09:06 but they are gambling.
0:09:08 Some of the costumes?
0:09:12 Fantasy sports are gambling in drag.
0:09:15 Robin Hood is gambling dressed as investing.
0:09:16 Crypto?
0:09:18 Gambling with a marketing department.
0:09:23 We know what happens when you give states the green light.
0:09:27 Bankruptcies soar 30%.
0:09:31 Americans grasp the scale of the crisis.
0:09:35 More than 40% of adults see legalized sports betting
0:09:37 as a bad thing for society.
0:09:41 Still, the dopamine cocktail is too much to resist.
0:09:46 Sports leagues aren’t going to lose their zeal for gambling,
0:09:50 despite back-to-back betting scandals in the NBA and MLB
0:09:53 that raised concerns about the integrity of the games.
0:09:55 Spoiler alert,
0:09:59 the leagues will distance themselves from the alleged conspirators,
0:10:02 but not from the gambling industry.
0:10:07 Direct sponsorship deals between legal sports books and top leagues
0:10:11 may be worth more than $1 billion annually.
0:10:15 A number of teams have agreed to put physical betting shops
0:10:17 inside their stadiums and arenas.
0:10:22 For a moment, it appeared the NFL was concerned.
0:10:25 In June, the league announced a partnership
0:10:27 with the International Center for Responsible Gaming
0:10:32 to support research into gambling among college athletes and students.
0:10:38 But this is a league that aligned with Caesars, FanDuel, and DraftKings
0:10:41 and hosted its first Super Bowl in Vegas last year.
0:10:45 Just as we’ve made a conscious decision to transfer wealth
0:10:48 from young to old and poor to rich,
0:10:53 we’ve accepted a system in which money flows from fans to leagues.
0:10:58 There are solutions, if we have the courage to implement them.
0:11:02 We could do more to educate consumers about the dangers
0:11:06 and impose tougher regulations, including age restrictions.
0:11:10 Limiting annual losses, restricting advertising,
0:11:15 and setting up firewalls between research into gambling’s impact
0:11:17 and the industry itself are all on the table.
0:11:22 Paul Tonko and Richard Blumenthal, Democratic lawmakers,
0:11:25 have proposed measures that would be a good start.
0:11:28 However, it’s an uphill battle.
0:11:32 The most profitable firms in history are squatting
0:11:37 in a building, our economy, that has no scaffolding on its instincts.
0:11:42 Any sort of DOPA regulation trails institutional production.
0:11:49 Prediction marketplaces say they aren’t on the other side of the trade.
0:11:52 Users are trading with their peers, not against the house.
0:12:01 As traders buy and sell, prices fluctuate to reflect the collective sentiment and knowledge of market participants.
0:12:09 But whether you’re putting money on the Mets or Mamdani,
0:12:12 users can develop an addiction.
0:12:14 I am not immune.
0:12:28 In the U.S. we’ve monetized health care.
0:12:47 In the U.S. we’ve monetized health care, the White House, and the pardon process.
0:12:58 However, these are dwarfed by the opportunity to monetize the less developed prefrontal cortex of a young man.
0:13:05 Once polymarket starts expanding in the U.S., more Americans will be swept up by the wave.
0:13:10 Not because everyone will be in Vegas, but because Vegas will be in everyone.
0:13:17 If policymakers aren’t motivated by the threat to Americans’ finances and mental health,
0:13:25 they should worry about the risk of foreign governments using the platforms to influence elections and public perception.
0:13:30 The most profitable companies all do the same thing.
0:13:34 They tap into our flaws and monetize them,
0:13:37 then pretend it’s innovation rather than exploitation.
0:13:43 We need to have a wider debate about the society we want.
0:13:48 Rather than celebrating gambling, we should embrace a different kind of risk.
0:13:52 Asking someone out, approaching a stranger,
0:13:55 investing in relationships with friends and potential mates.
0:13:58 This is what I ask myself when I mentor young men.
0:14:03 How can I increase their risk appetite for the real world?
0:14:07 How do we create a societal movement
0:14:11 to convince people to bet on each other, not platforms?
0:14:15 Will there be thoughtful regulation?
0:14:17 I don’t know.
0:14:21 But I’m certain we’ll be able to bet on it.
0:14:26 Life is so rich.
0:14:37 Life is so rich.