Sports: India, TSLA, Kalshi

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Bloomberg Audio Studios.

Podcasts, radio, news.

Tell me about your dream.

Okay, so I dreamed that I had a friend who was hosting a like TV show about sports, and I agreed to be a guest for like an hour.

You love sports.

Okay, so first of all, it's like a standard stress dream where like the thing that's happening in the dream is that I have like two minutes to get there and I'm like wandering through ESPN's cavernous offices to try to like imaginary dream ESPN to try to find the studio and I can't find it and I'm asking people and I'm late and I'm really nervous.

But also secondly, I'm like, I don't know anything about sports.

So I'm like wandering around like looking at my phone being like googling sports and trying to figure out what I'm going to talk about.

Yeah.

I think it was probably about this podcast.

Ah, God.

I have those stress dreams about TV constantly.

Yeah, sure.

When you actually go on TV, like missing your hit time, like not being able to get your mic on right, things like that.

I was missing my sports hit.

Yeah.

God, I wonder what sport.

I wish the dream had continued.

I was like, I know the Mets exist.

What is I can be like, I like the Mets.

How about the Nicks?

Yeah.

Sports.

Yeah.

Oh, I do want to say one more thing.

Okay, go on.

I was in an event this week.

And someone was like, do you have any bird updates?

It took me a minute to realize what I was talking about.

But then I was like, wait, we have have a great bird update, but I got to save it for the pod.

Yeah.

The great bird update?

Do you want to tell me?

Wait, I forget.

It's not really a bird update.

It's a money stuffed podcast commenter.

Oh, wait.

I also forget.

Okay.

You sent me a commenter, left a comment saying that if you're taking name suggestions for your so far anonymous bird, a good name for a bird would be Friend of the Pod Bill Ackman.

I love it.

I love it.

I think the full comment was like, if you put it up to a Twitter poll, may I suggest, I think it was Friend of the Show, Bill Ackman.

Friend of the show, Bill Ackman.

I don't think my parents would get it if I named our bird.

Right.

But like, instead of being like, do you have any bird updates?

I could be like, Katie, do you have any updates on Friend of the Show Bill Ackman?

And it would be so confusing.

He's perching really well.

He's learned to fly.

Yeah, I realize the problem is that he perches really well.

Sorry, this is a real update.

Really quick.

He's perching really well, except he doesn't want to perch on anything but humans, I realize, is the problem.

So we need to work on that.

I don't know what to do.

Friend of the show will be laughing.

You got to stop perching on humans.

Yeah, come on.

We're going to end up abbreviating that.

Fat spa.

Sweet Fatspa.

Sweet Fatspa.

Hello and welcome to the Money Stuff Podcast, your weekly podcast where we talk about stuff related to money.

I'm Matt Levine, and I write the Money Stuff column for Bloomberg Opinion.

And I'm Katie Greyfeld, a Bloomberg News reporter.

Wait, what am I?

How do I say that?

And I'm Katie Greife, a reporter with Bloomberg News and an anchor at Bloomberg Television.

Yeah, forget Chris.

I remember it at COD last week.

Why do I forget that?

Also, like, those are simple factual statements, but do you do?

James Street, big in India, perhaps too big?

Too big.

We can't both make the joke.

Sorry, I was Stephanie.

It was.

You telegraphed it somehow.

I don't know.

Somehow I knew.

My eyes were going to be a little bit more.

That's where that was going.

Yeah.

So, man, can I call him Sevi?

Sevi, sure.

Sevi.

Securities and Exchange Board of India.

Yeah.

Yeah.

Sevi is real upset with a specific eight-minute window on a specific day in January in 2024.

Okay, so the backstory here is that last year, Jane Street

sued Millennium because some traders left Chane Street for Millennium and they took with them, allegedly, some sort of secret trading strategy.

Chain Street didn't want to say even what country it was in because doing so would reveal proprietary secrets.

And then they had a hearing.

The Millennium lawyers were like, well, this options trade in India.

Oops, I'm sorry.

I didn't mean to say that.

And then just couldn't stop saying India.

India, India.

So that tipped us off that it was options trading in India.

It also tipped off SEBI, the Securities and Exchange Board of India, who, when you just think about it, if you're a securities regulator and someone is like, I'm making so much money with a secret strategy in beep,

and then the beep gets unbeeped and you learn that it's in your market, you're like, well, wait a minute, like that doesn't sound good.

Nobody should be making that much money with secret strategies.

Like, probably that means your secret strategy is bad.

And so SEBI looked into it.

And the essential background here is that India has a stock market.

It has an options market.

And intuitively, an options market, you know, the stock options market is a derivative on stocks.

And, you know, it will be like most people will buy stocks.

And options will be like a small, you know, sideshow to the stock market.

In India, the options market is vastly bigger than the stock market.

Like on options experi days, which are once a week, the options will trade several hundred times the volume of the underlying stocks.

And that sort of tells you what the problem is, which is that if you buy a little stock, the price of the stock will go up because the stock doesn't trade that much.

And the options just reference the stock.

They settle against the stock.

So if you buy a little stock, that'll push out the stock, which will push out the options.

So you can buy a lot of options for cheap because they trade really liquidly.

You can buy a little bit of stock and push out the price.

And then you can sell your options at a big price.

Anytime the underlying market is less liquid than the derivative market, you can manipulate the derivative market by buying a little bit of the underlying and pushing out the price in the much bigger derivative market.

Right.

And that's what they're accused of.

Yeah.

And it's a strange case in that SEBI accuses them of doing these manipulations on a lot of different options expiry days.

Basically, the idea is like they would buy stock and sell options simultaneously in the morning.

So they're pushing out the price of the options and selling the options at higher and higher prices.

And then in the afternoon, the options would expire or they'd buy back their options and they would sell back the stock.

Selling back the stock would push the stock down, push down the value of the options.

So they sold options high in the morning, bought options back low in the afternoon, and did the reverse trade in the stock.

So they lost money on the stock trade, but they made much, much, much more money on the much bigger options trade.

Right.

It's a strange case because like Sebi spends a lot of time on these eight minutes on one particular day in January 2024.

And if you look at those eight minutes, the thing Jane Street, it looks like what they were doing was just an arbitrage trade.

The options were trading really expensive because basically retail investors buy options and the retail investors were enthusiastic about the index that day, so they were buying a lot of index options.

The underlying stocks were trading relatively cheap.

And so Jan Steer was like, oh yeah, there's like a 1.5% gap here.

We're going to buy the cheap stock and sell the expensive options and profit when the gap closes.

And it does look in those eight minutes like that's what they were doing.

Right.

Which I wrote because I think it's interesting that like the thing that Sebi highlights is what looks like it it might be a legitimate trade.

A lot of people push back on that because like if you look at like the totality of like the you know 15 days they talk about and even the totality of that day, it is less innocent looking perhaps.

But I think the broader point is like it is sometimes hard to tell the difference between legitimately arbitraging two different prices or like doing a trade and hedging it to tell the difference between that and manipulation.

Yeah.

I think that like one possible explanation of what's happening here is like Chain Street is trading Indian options.

They're not a market maker exactly.

They have like a market maker flavor where they're like, you know, retail flow wants to buy options.

And so Jane Street's like, okay, we're going to sell options to retail because

it's generally profitable to be on the other side of retail.

And if you're doing that, you might hedge part of what you're selling, but not all of what you're selling, because you might think, well, we want to hedge, but

these retail people are probably wrong, so we're not going to hedge all of it.

And so, you know, we'll sell 100 options and buy back 10 shares of stock or 20 shares of stock.

But

another way to look at that is that that looks manipulative, right?

Because you're buying the stock to push up the options.

So I'm not really sure what went on here.

And like one possibility is that like...

you sort of get into it for legitimate reasons and then like you sort of look up and you're like, wait a minute, are we moving these stock prices?

Are we moving these stories?

Are we the baddies?

Are we the baddies?

So I don't know.

I really don't know what was in their hearts about it.

Yeah, within the halls and walls of jane street yeah when it comes to those specific eight minutes so i mean jane street contends that it was arbitrage that they were doing it seems like you were sympathetic to that thing well if you just look at those eight minutes that's what it looks like yeah well with one exception which they sold a lot of options and they bought back much less stock like you know seven times as much options as stock which is a weird way to do the arbitrage there's like there's reasons to do it that way right one reason is it's just hard to buy the stock so they're selling more options than they're buying stock another reason is you know you have some model of what the correct price is, and you think the retail traders buying options are

way farther away from the correct price than like the institutional stock price, right?

That's a plausible thing.

So you're like buying less stock because you're pushing the price to a lower level.

But then a third possibility is like you understand that your stock trading causes price impact and you're trying to do it in the way that advantages you the most.

And that one looks bad.

Yeah, for sure.

And I mean, Sebi would contend that this is market manipulation.

Oh, Well, if you push

seized their money, banned them from trading.

Not happy.

A temporary banned.

If you did point out to them that the option prices went down in that eight-minute window,

I mean, would their pushback be that, theoretically, that Jane Street was just bad at market manipulating?

Oh, no, no, no.

I think the pushback would be one, while Jane Street was buying stock and allegedly pushing up the options prices, one, the options price did go down, but like the argument would be that it would have gone down more had Jane Street Street not been buying the stock.

And then the other argument is that you can't just look at those eight minutes.

You have to look at the course of the day and

kind of the year.

And a lot of the time,

it did seem like they had the effect of pushing up prices.

So is this the trade that Jane Street was willing to kill to protect for?

I don't think there was a trade.

I think there was

a broad

set of signals and set of things that they were doing in the Indian options market.

And

you know, they wouldn't characterize it as the trade was we were manipulating the Indian options market.

They would characterize it as like, oh, we had lots of good ideas, and they took all of our ideas.

Trevor Burrus, like there were a lot of arbitrage opportunities when it comes to Indiana.

And

they knew specific ones.

But you're right.

The cynical take is that all of those ideas were a subset of one big idea.

Yeah.

I mean, you highlighted LIBOR as an example of...

something that's somewhat similar where you know you have this underlying that's the trading there is much smaller yeah there's not a ton of things like this because usually derivatives markets are derivative.

They're like

a small tail on the dog of like the main market, but like every so often they're not.

And the LIBOR is the biggest example where LIBOR was originally some loans were set, some floating rate loans were fixed to the price that banks were borrowing from each other at in the Euro dollar market decades ago when banks were borrowing a lot in the Euro dollar market.

And when you first do a loan like that, you're like, oh, that's a great idea.

You've got like this little loan.

It'll price price it to the big liquid euro dollar market.

But over time, trillions of dollars of loans and derivatives were fixed to LIBOR.

And meanwhile, like the Euro dollar market kind of withered.

And so by the end,

you know, banks would just make up numbers for LIBOR because they just didn't borrow in the tenors that LIBOR was asking for, and like trillions of dollars of derivatives fixed to that.

And so you could really easily manipulate that.

And many banks did.

You bring up tails and dogs and the concept of wagging.

Sure.

And this, because

this reminded me of something in ETF land.

Oh, no.

Oh, no, that I wrote about actually in late April.

And the headline of my newsletter that week, the ETFIQ newsletter, was, Can the tail truly wag the dog?

We might soon find out.

Is it about MicroStrategy?

No.

Okay, because MicroStrategy is a place where people think that the ETF tail is wagging based on the dog.

I have a more extreme potential example.

It hasn't happened yet, but we saw in late April this ETF launch, the Trader Two Times Long QBTS daily ETF launched, which seeks to track 200% of the daily performance of D-Wave Quantum, which is this small quantum computing company.

And

I think it has a market cap, or at the time its market cap was only $2 billion.

So, I mean, it wasn't

$200, but a lot of these single-stock leverage ETFs, it's not outside of the realm of possibility that if this really took off, it could have a bigger asset base than the market cap of this really small stock that attracts.

There could be a situation.

Where like the ETF could have $3 billion.

Yeah.

Or even $1.5 billion because that means

$3 billion of expenses.

It could have enough where it was comparable to the actual market cap of the stock.

I feel like

I would stop that if I ran the ETF, but maybe they wouldn't.

Maybe you'd be thinking, let's see where this goes.

Yeah, you might.

And I mean, just the concept of this launching on such a small stock.

I mean, you have all of these

Frankensteins of leveraged single-stock products that track microstrategy, but microstrategy is enormous and you have this concern.

I know.

I just, I think that every, every possible trade should be ETFized.

Yeah.

Like, me too.

The demand for like, I want margin exposure to qubits or whatever is

twice the size of qubits.

I would have been there with you, but then I don't know.

We've just really seen these things take off.

Did the thing get to $4 billion?

No, but it's at $50 million,

which for launching in late April, that's pretty impressive.

So also, it seems like the stocks that do best in terms of the leveraged single-stock wrapper are the very volatile ones.

And quantum computing stocks are very volatile.

So they definitely fit that bill.

So we'll see.

I wrote this week about inverse leverage of DTS.

I know.

Let's not get into it.

Let's not get into it, but I do want to, I want the listeners who think that we talk too much about ETFs to note that

you wrote two sections on ETFs this week, at least, and we're not getting into it.

And then you're like, let's not talk about ETFs today.

And then Jimmy's like, but wait, one ETF.

I don't know.

I think it's remarkable restraint on my part.

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Speaking of remarkable restraint, Elon Musk told Dan Ives to shut up on Twitter.

There's so much remarkable restraint that he's shown.

I was enjoying when Linda Yakarino, the

now former CEO of former Twitter, the ex-CEO of X, et cetera,

she announced on Twitter slash X that she was was stepping out as CEO and she had a nice like in our two years we've made a lot of blah blah blah blah yeah it was going Elon Musk replied thank you for your contributions Jesus really harsh that is that's tough she lasted two years which I think is a lot longer than many folks at the outset expected her to last because that boy what a difficult impossible job that she had

yes which was basically courting advertisers to come back to this platform, a platform that was also just, you know, the bullhorn of Elon Musk, who does not care about advertisers.

Aaron Ross Powell, I think it's so funny that she was like the chief marketing officer of X, but like for

some sort of optical reason, they decided to call her the chief executive officer of X.

And there was like this brief period where not only was she the CEO, but Elon would be in charge of engineering or something.

There was some like, he had some role that was like a non-CEO role.

And so, you know, there's been reporting that in her role as quasi-CEO, but also in her role as like the liaison with advertisers, she would talk to advertisers and they would say, it would be great if Elon would stop, you know, tweeting offensive stuff on X.

That would help us come back.

And so she would go to him and say, hey, it would be great if you would stop tweeting offensive stuff.

And he would get mad at her.

And like, if she were the CEO, if she were in charge, you'd think she might have told her employee, please stop tweeting offensive stuff on Twitter.

For sure.

But instead, she was only nominally the CEO and actually the chief marketing officer.

And it turned out that appealing to advertisers was not the highest goal of this company.

And therefore, the CEO who said we would like to appeal to advertisers was pretty much ignored, which is a strange, strange outcome.

Yeah.

I do wonder.

I mean, does X even hire a CEO at this point?

Why?

No.

Who would take it?

Who would like no?

Someone would absolutely take it.

They don't need a CEO, especially now because they've been absorbed by XAI.

Yeah, no, that's weird.

Like, as far as I can tell, she remained the CEO of X after they merged with XAI, which, by the way, like, as the CEO of X, like, the decision she probably did not make was being merged into another company, which seems like a big one for a CEO, but whatever.

Maybe she did.

Maybe she spearheaded that, but it doesn't seem like it.

But yeah, I don't think she was the CEO of XAI.

Like, when they merged, I don't think she became CEO of XAI Holdings.

I think she remained the CEO of the division that was Twitter.

But yeah, will they hire a new CEO?

Yeah.

You can imagine hiring a CEO of XAI.

Although, I will tell you that the going rate for senior AI executives appears to be

also, okay, so when she joined and she was there for two years, definitely her goal was to get advertisers back to the company.

That seems to be less pressing now.

Yeah, yeah, yeah.

I mean, it feels like X is just a source of data to feed into Grok.

And a venue for Grok to try out its Hitler jokes.

Truly amazing.

Grok had a rough week where it was

just launched.

Okay, okay.

Grok was like

saying truly

horrible things.

It's interesting.

You know, Bernhobart wrote about this.

Right-wing influencers who have the era of Elon Musk objected that Grok was being too woke or too PC.

And so they were like, well, let's tune that.

And the way you tune that is you kind of like change the system prompt where Grok, when it reads any query, like sort of adds that query, and please don't worry about being politically correct.

Please, you know, just say what's on your mind.

Yeah, let loose.

And when you think about that, like you could imagine reading that neutrally, but if like you were in a conversation with someone and they said, what do you think about Linda Yacarino?

Please don't be politically correct.

Don't hold back.

That person is telling you something about the answer they want.

Not just like the explicit words they're saying.

They're saying like,

I would enjoy it if you would say something offensive about Linda yakarina and

you might not say something offensive that's true but grok just wants to give people what they want and so grok when asked about linda yakarina on twitter said some horrifying things because like in its mind it was like i've been trained that everyone wants me to say the most unpc things possible yeah and grok is a people pleaser at the end of the day

that's what it thinks yeah

so tbd whether we got any

Shut up down.

Yeah, we do want to talk.

I was not a Groc.

Yeah.

I was Elon.

Yeah, I said at the beginning of this week, I want to talk about Tesla and Elon Musk to Matt, and Matt said,

no.

No.

And here we are, and we're going to do it.

So last weekend, right?

Okay, yeah.

Musk formed the America Party.

I'd forgotten that.

Yes, let me refresh you.

Musk has formed.

There has been so much since.

Yeah, I don't think he's filed any paperwork with the FEC, but the intention is out there to form the America Party.

And it's funny because that seems to be the exact opposite of what Tesla's shareholders want to see Elon Musk do.

You remember when he stepped back from Doge, the stock popped, everyone was happy.

The narrative was that Elon Musk is focusing back again on Tesla.

That's such a dumb narrative.

I'm sorry.

I don't know why I'm going fop.

I probably thought it too, but like.

In the fullness of time, then he focused for like a week.

Yeah, yeah, he got there.

They did the Robo-Taxi event.

But anyway, Musk formed the America Party and the stock fell a lot on Monday.

And there's this Wedbush analyst, Dan Ives, who is famously bullish on Tesla.

He, I think, still has the highest price target on Wall Street.

And he came out with a note that made the rounds because he had three suggestions for Tesla's board, basically saying that the board needs to rein in Elon Musk.

And he also tweeted that, and Elon Musk replied to him, and all he said was, shut up, Dan, which which is pretty amazing.

Like, this is one of the longest, most passionate, and most vocal Tesla bulls out there.

I also think it's funny that, like, the Dan Ives note also is like, okay, first things first, you have to give Elon Musk an enormous package of Tesla stock options, which is like, yeah, it's a funny dynamic where the way to rein him in is to give him $100 billion.

And like, that's probably not wrong, but it's like, you know, if you throw a big enough tantrum, you get what you want, right?

Like, if you are very

disengaged with tesla then like the way to re-engage you is to hand you a hundred billion dollars worth of stock maybe well to that point i don't think it would work

part of dan ives suggestions was that they should include requirements for the time commitment to tesla operations as part of the pay package but imagine doing that imagine like you have to clock in yeah we'll give you a hundred billion dollars of stock but you have to show up 30 hours a week and then what and then what you monitor that he doesn't show up and you're like okay we're taking away your stock.

The board's going to do that?

They're not going to do that.

Come on.

Maybe Elon Musk will buy one of those mouse jigglers that we talked about.

Something to just

move the cursor around.

What else did he say?

Oh, he said, while the board cannot control who Musk donates to politically, I've said that the board should have oversight to ensure that his political ambitions don't interfere with his role as CEO of Tesla.

So things along those lines.

Right, but like, that ship has sailed.

Yeah.

He's like, he's tasted too much power to be like oh i'm the ceo of a car company like he's not the ceo of a car company he's

yeah well it's interesting to see where this goes like if they were like okay you have to choose between being ceo of this car company and like everything else you do

he's not gonna be ceo of the car company oh

it's fine i believe wholeheartedly that if musk had been born in the united states he would be running for president right now out of cycle just running for president

he would be campaigning

yeah but tesla is like, he's got too many ambitions to be like

chained to his desk at Tesla, you know,

watching the clock.

Yeah.

Also, like, yeah, like

you could imagine some board trying that, but not this board.

Yeah, that's true.

I will say the narrative that Elon Musk is too distracted a CEO has been around forever.

Like it seems particularly enhanced right now with the political element, but he's always been in charge of multiple companies at once.

Yeah, because when you say distracted, there's kind of two things going on, which are like, one is like, is he not spending enough time?

And I think, you know, at this late stage, like, I think there's a pretty good case that he is effective at accomplishing a lot of what he wants to do without spending all of his time at a company, that he's able to like come in, address problems, delegate well, and then get out.

You know, like, I don't think like distraction in the, in the literal sense is the problem.

The problem is that like he chases shiny objects that like can hurt the company, right?

And that is harder to rein in.

I think probably Dan Ives would be happy with Elon Musk spending 20 hours a week at Tesla and

the rest of his time quietly playing video games.

But 20 hours a week at Tesla and 80 hours a week doing horrifying other stuff is more of a problem.

Yeah, for sure.

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Let's talk about Calci.

Let's talk about Calci.

So, sports gambling has become really big in America in the last, you know, I've noticed.

Yeah, like, really, really big.

Like, I remember a time when you could watch sports, and not only were they not like,

you know, pitching gambling companies in every commercial break, but also, like, you know, Pete Rose was banned for life from baseball for betting on sports.

Like, betting on sports was like a bad thing and now it's like you know betting on sports is what sports is back in your day yeah yeah i'm old yeah this is what i would have talked about on the sports tv show there you go back in my day you didn't bet on sports i mean people bet on sports it was like you know kind of like illegal-ish right

legal and only you know play the ponies yeah you could play the ponies but like

when you went to a baseball game it wasn't like everyone there was betting on it yeah um but so it's become hugely popular and like broadly legal but then separately there are people who have long loved the idea of prediction markets right prediction markets where you can bet on who's going to be president prediction markets are informative they create information they like create good externalities for the world they tell you what's going to happen right and so people have started you know a lot of it is crypto flavored but it's not always people love starting prediction markets And once you're in a prediction market, you're like, you know, you get a lot of attention when the presidential election rolls around.

And then it stops, right?

Like the presidential election happens.

No one cares about like, you know.

No one wants to bet on congressional races.

And even those are like every two years, right?

So like you have like a lot of downtime.

And you're like, you know what people really like to predict is the outcome of baseball games.

And so then you're like, how can I get into sports gambling?

Or no, no, no, sorry.

You're like, how can I get into the prediction of sports analysis?

Yeah, base.

Good thing you protect yourself.

And so a number of these prediction markets, it's just like a natural overlap.

And like, by the way, like in Europe, these things are also pretty convergent where like bookmakers will take bets on sports analysis.

And so several of these things, including Calci, which is after great difficulty, a CFTC

registered, like legal-regulated futures exchange that does prediction markets, Calci has prediction markets on the election.

And, you know, after the last election, like the regulatory environment is pretty friendly to prediction markets.

But it also has prediction markets on Wimbledon and baseball and soccer.

And

those prediction markets are technically CFTC regulated, self-certified futures contracts.

If Calci decides what it wants to list, it lists those things.

And if the CFTC doesn't call it up to object, those things just get listed and they trade.

And several states that regulate gambling have called Calci up and said, you are offering illegal sports betting in our states.

You can't do that.

And Calci said, nope, these are CFTC registered contracts.

CFTC regulation preempts state regulation, so we can just do it and you can't stop us.

And by the way, we don't even know what this has to do with gambling.

This is not gambling.

This is predicting.

And so far, that has worked really well.

Like they've won lawsuits against states.

Which is amazing.

It's incredible.

And I think the sort of basic theory here is like, this is CFTC jurisdiction.

And if the CFTC wants to stop it, they should stop it.

The CFTC has sort of like said

that these things are illegal, but that was before the current administration.

And it hasn't done anything to stop them.

And I think it's like quite favorable to Calci right now.

And so

it just gets to do it.

And it's wild.

And what I wrote about on Thursday is that there's a change in the tax law with the One Big Beautiful bill, where now only 90% of gambling losses are tax deductible against your gambling winnings.

And that's like really existential for a lot of sports gamblers because you're a sports gambler, you're making a lot of bets, you're winning a little bit more than you lose, right?

And like you're making, you know, a 5% profit margin on a huge outlay.

And if 10% of your losses are non-deductible, then like you flip from being slightly positive to slightly negative.

And so you just can't be a professional sports gambler anymore.

But if you're just predicting on a prediction market, it's fine.

No problem.

Well, that's the thing.

You have to imagine that the net effect of that would be just accelerating the move to these events contracts.

Like I learned about this because a reader emailed me.

It's like, I'm a semi-professional sports gambler and I am going to have to move to a prediction market.

That's wild.

It's wild.

So, Calchie is winning lawsuits, but I mean, at a certain stage, like,

isn't there an element of common sense that comes in

and says, Look at this duck.

It walks like a duck.

It quacks like a duck.

This is a duck.

And Kalshi says, no, this is.

Okay, I think their argument is like, you're coming at it from the wrong direction.

Sense?

Okay, like,

yes.

Okay.

These bets on sporting events look like sports gambling.

Yeah.

But they also look like bets on elections and interest rates and zero-day options on microstrategy and meme coins and all the other stuff you have that is like clearly financial markets stuff.

And why?

Speculation.

Why should sports be sacred?

Why should sports be sacred?

Like everything is like this.

So like, why can't sports be like this?

Yeah.

And I don't know.

That's kind of a good argument, but it like scares me.

Yeah.

It is.

It is a little bit scary.

It's like if it's all gambling, if like

what you're doing in the financial markets, by the way, sorry, I'm exaggerating.

It's not that everything everyone does in financial markets is gambling.

It's that like a lot of stuff.

Sometimes it's arbitrage.

It's gambling.

Sometimes it's arbitrage.

Sometimes it's manipulation.

Sometimes it's fundamental long-term investing.

Right.

But like there's a lot of stuff that like, you know,

is gambling both in the sense that like you're speculating on stuff without much edge and also in the sense that you're having fun doing like it's an entertainment product it's like clearly the case that like a lot of stuff that is being sold to retail investors is

a risky entertainment product and

they're just like well why not sports that's like a risky entertainment problem

yeah i will just say i did end up talking a lot about sports

you love sports

you famously you love sports i will say it does feel inevitable that we're going to see an events contract etf i'll just leave you with that thought.

I love CTCC.

They're CFTC regulated.

And that is the Money Stuff Podcast.

I'm Matt Livian.

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