Prediction Markets and the ‘Suckerifcation’ Crisis With Max Read

In this episode of Galaxy Brain, Charlie Warzel explores the burgeoning industry of prediction markets. These platforms let people wager on everything from elections and award shows to the most trivial internet ephemera, framing bets as tradable “shares” that rise and fall like stocks. With billions in weekly trading volume, massive new funding rounds, and even a CNN partnership with the prediction-betting platform, Kalshi, prediction markets are quickly moving from a niche curiosity to a mainstream-media fixture—openly touting ambitions to financialize everything. Warzel is joined by writer Max Read, who argues that prediction markets sit at the intersection of gambling, finance, and a broader “suckerification” economy aimed at young men. Together they unpack whether the markets actually reflect the “wisdom of crowds” or whether they’re little more than a meta-game of vibes, ideology, and misvalued dumb money. The pair explore the culture of these platforms and offer a diagnosis of the attention economy: When it’s hard to sell anything directly, it’s easier to sell derivatives of everything. Prediction markets may promise clarity, Warzel and Read suggest, but what they really offer is another way to feel excitement in a world that feels rigged. Get more from your favorite Atlantic voices when you subscribe. You’ll enjoy unlimited access to Pulitzer-winning journalism, from clear-eyed analysis and insight on breaking news to fascinating explorations of our world. Atlantic subscribers also get access to exclusive subscriber audio in Apple Podcasts. Subscribe today at TheAtlantic.com/Listener. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:19Speaker 01

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• 0:34Speaker 02

  When I say a Suckerifcation crisis, I don't simply mean like, oh, you know, they're getting they're getting bilked out of their money, though I think that's part of it. I think there's a whole kind of both commercial and political kind of apparatus that is working really hard to, you know, separate young guys from their money.

• 0:59Charlie Warzel?

  I'm Charlie Warzel, and this is Galaxy Brain. A few weeks ago on this podcast, the journalist Pablo Torre told me this.

• 1:07Speaker 04

  It feels like, you know, we're living at a time in which lots of young people were promised things. They were not delivered, perhaps because of the generations that continued to wield power in our government, economy, et cetera, the boomers. And the way to like chutes and ladders your way to the American dream is gambling on shit. And in that casino premise, I think you just see, again, a through line across all these sectors of American life now, sports being one that has so naturally taken to it because, my gosh, here's an unlimited menu. I mean, literally.

• 1:45Charlie Warzel?

  Today, we're going to explore another part of that unlimited menu of gambling and the casino-ification of the American economy: prediction markets. Chances are, you've been hearing a lot about prediction markets lately. At their core, prediction markets are online spaces where people can place wagers on the outcome of events. They share similarities with sports books, except unlike a traditional bet at a casino, your wager is a futures contract, the value of which fluctuates based on the market value of the outcome of any given event. Right now, people use the markets to bet on sports, events like the Oscars, whether Elon Musk will tweet a specific number of times in a given month, or about the outcome of an election. The

• 2:26Charlie Warzel?

  top platforms now for prediction markets collectively report several billion dollars worth of weekly trading volume. Kalshi, one of the biggest prediction markets in the space, announced this month that it raised a billion dollars from many of Silicon Valley's biggest venture capital firms. Recently, CNN announced it was partnering with Kalshi to integrate the company's prediction market data into news coverage. The company's CEO, Tarek Mansour, has big ambitions. At a conference in October, he said this about Kalshi's future.

• 2:57Speaker 05

  The long-term vision is to financialize everything and create a tradable asset out of any difference in opinion.

• 3:03Charlie Warzel?

  Financialize everything. That's essentially the quiet part out loud. That is the blueprint for the actual casino-ification of the world brought to you by one of the more ascendant companies that's moving everything towards gambling. So what's really going on here? How do prediction markets work? Is there some truth to what boosters allege, that people putting their money where their mouths are is actually a good way to tap into the wisdom of crowds? Or is this just a dystopian development, an example of companies preying on a society with a burgeoning gambling addiction? Today, I'm joined by Max Reed, author of the great Substack Reed Max. Reed covers culture and power on the internet and has

• 3:47Charlie Warzel?

  this really intuitive understanding of platforms and people. Recently, he wrote a great piece titled "Prediction Markets and the Suckerification Crisis." Max and I talk about where all this is going and why everyone is gambling and no one is happy. Now, my conversation with Max Reed. But first, a quick break.

• 4:09Speaker 00

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• 4:43Speaker 01

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• 5:21Charlie Warzel?

  Max Reed, welcome to Galaxy Brain.

• 5:24Speaker 02

  Thanks for having me, Charlie.

• 5:25Charlie Warzel?

  Yeah, so we're going to talk about prediction markets, hopefully come up with some grand theory as to why they are ascendant and why everything feels a little bit broken. But I wanted just first, like, what are they for the normies out there who aren't, you know, using them? Like, how would you describe them? How are they different from, you know, straight up gambling or like a sports book?

• 5:50Speaker 02

  Yeah, well, I described them, the first time I wrote about them, I described them as sports books that allowed you to place wagers on non-sports events. But I think the extra sort of bit that's important to understand about them, because in the end of the day, that is what they are, and it's the way a lot of people use them. And I should note, by the way, that when I say they're not, they're sports books that allow you to place bets on non-sporting events, many of them are actually also sports books. Calshi in particular allows you to place wagers on games. But what they do is really emphasize the wager as a security that you can purchase and sell the way you would a share on the stock market, say. If you believed, say, that there would be a democratic sweep across New Jersey, Virginia,

• 6:35Speaker 02

  and New York City back in November, you could have bought shares or you could have you could have bet on that outcome for, you know, what it like 30 like they'll do it as prices, right? You bet it you wager 30 cents for for the return of a dollar, right? So you could buy the shares at 30 cents. You buy 10 shares at 30 cents, you get $10 back if if that comes off. Now, I mentioned 30 cents, say, because, you know, a couple of weeks, I'm not sure if that's the exact price, but a couple of weeks before this election, it was kind of unclear what Democrats' chances were going to be in any of these elections. There was a lot of polls coming out saying that Mikey Sherrill in New Jersey was running dangerously sort of close to in the race against, I can't even remember the name of

• 7:17Speaker 02

  her opponent at this point, but, you know, it was it was a fairly low probability according to the betters on the app, right? But as the returns start to come in on Tuesday night, and it becomes clear that actually the chances that this is going to be a sweep across all these elections get higher, all of a sudden, the price of a given wager rises, or the price of a given share, so to speak. So, you know, a 30 cents, suddenly it's 40 cents, suddenly it's 60 cents. The way you would think about that, if you were just talking gambling odds, is all of a sudden, you're getting less return on your wager, basically, your odds are getting significantly easier. And you could have, say, if you had, let me give a different, a slightly different example of election. So recently, in Tennessee, this woman, Afton Bean, was running for a congressional seat,

• 8:01Speaker 02

  and she was absolutely not the favorite. It's like a, it's like a, you know, it was a Trump plus 30, you know, congressional district or whatever. And you could buy shares for her victory at like, you know, 20 cents, something like that, the week before the election. The night of the election, as returns start coming in, she is looking actually kind of good for it, like the early returns are quite good for her. And I watched as those shares, as the price of her shares climbed up, I'm not going to say whether or not I Had any horse in this race, any money on this. But I was watching it closely, let's just say. And there was a point where if you had bought shares at thirty, and again, who knows who I'm talking about here? But if you had bought shares at thirty, you could have sold them for a one hundred percent profit, sold them at sixty cents,

• 8:43Speaker 02

  only for those shares to come crashing down as the results continue coming over the night and it becomes clear it's not happening. So, sorry, this is a sort of complicated explanation, but I think it's useful to understand like how you use it, right? That when you go on these sites, what you're doing is you're doing this kind of thing that's kind of a hybrid, like stock market, day trading activity and a betting activity. And I do think it's worth saying, as much as they emphasize the sort of security, quality of these wagers, you can do this at a sportsbook too, right? That odds will change at a sportsbook depending on who's taking which side of the bet. And you can cash out, most sportsbooks will allow you to cash out various times, you know, after you've placed your wager. And if the odds of the wager have changed in between the period where you placed your wager and you're cashing out,

• 9:26Speaker 02

  you can get a, you could make a small profit just from cashing out, right? That if you, if you, if you wager that a team is going to win and then, you know, you could cash out with five minutes to go and they're up by twenty points, you're not going to get as much as you would if you saw the whole thing out, but you can cash out at a fairly high profit. So in that sense, it's just, it's sort of another way of looking at or another way of thinking about gambling that emphasizes the sort of up and down nature of odds. And I think that's how most people kind of approach it when they're on the site, you know, placing these wagers is they're thinking about it like betting. But I think it's also important to understand why they have become so ubiquitous in media is that they, and why they're, they are exciting to a lot of economists and libertarians especially,

• 10:12Speaker 02

  libertarian economists especially, is that they offer a kind of semi-accurate, accurate depending on the liquidity of the market, accurate depending on the size of the market, accurate picture of what you might think of as the conventional wisdom, right? That it's sort of like, because there's all these people collectively saying how much, like placing their own odds, so to speak, on a given outcome, wagering their own actual money. They have skin in the game, so nobody's doing this just as for propaganda purposes or whatever. You can say conventional wisdom has the chances of this event happening at, you know, 50%, 30%, whatever. Now, these markets are still fairly small and many of them are not very liquid at all.

• 10:54Speaker 02

  So there is not like there's millions of people betting a couple bucks at a time to make them, you know, as sort of accurate as possible. You'll have a couple whales who are placing large wagers, which makes them, you know, is sort of interesting in what they tell you because it's not saying necessarily the conventional wisdom. It's like the conventional wisdom according to the kind of person who places a bet on this kind of thing. That's the other side of it, the non like user side, the media side, the the sort of philosophical side of this is prediction markets allow us to start to look at the future in a in this in this way that that allows us to set probabilities about things.

• 11:28Charlie Warzel?

  I'm curious what you make of the wisdom of crowds bit because the thing, this is the part of me that like stops and feels a little insane sometimes with this because I think about like this is essentially a meta game, right? Where you have the this system that produces outcomes and incentives for certain outcomes that are that arise in it. And you wrap that system in an apparatus that is also conservative influencing those outcomes. It's this like second order thing, right? Like, like, you know, you have the like poker where, you know, good poker players can technically predict the outcome of hands, but, you know, that is also influencing the outcomes of the games. Like, it just feels to me like what you're doing is

• 12:12Charlie Warzel?

  prediction markets aren't what people think will happen. It's what people think other people think will happen, right? Like the so so it feels to me like it's, yeah, it's confusing.

• 12:22Speaker 02

  I do think there's a use for that, but you could you could come up with reasons. And, you know, from a financial sort of market perspective, one way of thinking about it is that these are effectively instruments for hedging, right? That you you you have a sense of you think something's going to happen, but you also want to place some wagers on the side in case it doesn't happen to limit your losses. And for that, you don't need it to be wholly accurate, right? You just need it to to sort of approximate a given outcome that allows you to to make money off of that. You know, I think there's there's sort of two ways to go with what you're saying. One is that In, until recently, prediction markets have largely been a sort of theoretical idea, right? I mean, we could talk about the stock market, or a sportsbook for that matter,

• 13:04Speaker 02

  as a prediction market, but this sort of all encompassing marketplace to make wagers on, I mean, recently, there were wagers on the Time Magazine cover of the year, like Person of the Year cover, you know, all the Oscars, all the award season stuff that you can wager on who's going to get nominated and who's going to win. We've talked about elections already. There's even often marketplaces for words getting mentioned by prominent figures in, what's the word I'm looking for? In speeches or in, you know,

• 13:32Charlie Warzel?

  Earnings calls.

• 13:33Speaker 02

  Yeah. And this is a kind of, you know, like, if you believe really strongly in the idea of the wisdom of crowds, that's very exciting. But, you know, the theoretical model of the prediction market is, as I was sort of emphasizing before, is one that everybody is participating in, the market is fully liquid, everybody has stake in it, everybody is placing wagers there. And these markets are fairly far from that, right? On election night, there tends to be enough money and enough people to sort of approximate what we've been talking about as the conventional wisdom about who's going to win and who's going to lose. But it's not always the case, and certainly not the case for stuff like these culture categories that I'm talking about.

• 14:11Charlie Warzel?

  I wanted to ask, without you having to divulge whether you are or not actively participating in these markets, what's the culture like on these? Like, what, you know, I think it mirrors some of the culture on X Twitter in the Musk era. But when you go either for, you know, to try to place some wagers or to, you know, for reporting purposes, what's the culture like?

• 14:43Speaker 02

  I could talk about the culture in the comment sections, which I wouldn't want to suggest is wholly reflective of the culture of these places in general. And I think there is a wide range. There is smart money. There are sharps out there who are running programs and bots to identify, you know, like, especially on an election night, you'll get guys who are pulling results, all doing this automated, like, basically like HFD, like high-frequency traders, pulling results from the New York Times or Decision Desk or whoever, and changing and like immediately placing orders on shares to take advantage of that with like a, you know, you don't have to do it in the milliseconds the way you do on Wall Street, but you can do it if you just do it in a couple, like, just a lag of a couple of seconds will still. You know, make it advantageous. And you have people who are quite good at like,

• 15:27Speaker 02

  for example, the Time Magazine cover leaked before it was announced and a bunch of people made a tidy little profit because it it took a while for the market to catch up. So I say that just to say that there are smart people, just as a, you know, a to be sure thing before I get into the comments, which are really stupid. I mean, there's a lot of stupid people there. And there's like, there's a funny mix of like, just really obviously stupid people, like Free Republic commenter type, like, you know, X, like bottom of the barrel, X, Trumpist X types. And then there's stupid that's just guys who have sort of wandered in like this. Every, every wager you will, if you scroll far enough, you will find a guy who took the stupid side of the wager because he didn't read the terms until after he'd put his $50

• 16:11Speaker 02

  down. He's like, oh, I didn't realize that I was actually betting, you know, against this. I thought I was betting for it. Oh, well, like now I'm out 50 bucks. I think the, the tone reminds me a lot of, the closest thing I can think of online are the two closest things are the, if you play fantasy football in Yahoo, every player has like their own little comment section and you can like pull it up as you're deciding who's to start and who to bench. And you, it's just filled with people just clinging to the like most desperate of threads, you know, like, like citing articles they read somewhere. Nobody's linking to anything. Everyone's like, oh, I heard he's gonna play. Oh, I heard he's injured. Oh, I heard he's, you know, like, he's not gonna be the, the first, he's like, he's, he's not gonna get

• 16:54Speaker 02

  any catch. He's not gonna get any throws this, this game, whatever it is. And, and the bets remind me of that, like the, the comments on the betting, on the, on the bets kind of remind me of this on all the markets. It's somebody being like, oh, you know, there's one market that's, um, which, which member of Trump's cabinet is gonna leave first. And everyone's like, well, okay, well, here's this thing I read about Hegseth and everybody else will be like, well, I read this about Pam Bondi and people like doing their theories. It's, it's like a message board. It's not the dumbest place I've ever read, but it's like of a basic kind of politics message board stupidity. It's just that there's all this money, you know, going on in the background. All of which is to say, like, when I say it's similar to the fantasy football chats is it's very male, obviously. It's very young, obviously. I mean, young and the tw- I think

• 17:36Speaker 02

  most of the guys are sort of in their twenties. It's sort of confident but ill-informed in the way you would expect a lot of, you know, guys who like to gamble in their twenties basically are.

• 17:47Charlie Warzel?

  There's also like, and I don't mean, I don't mean this in like a, like a pearl clutching way, right? But like, it's a little reactionary, right? It's a little, um, because part of what I see in the elevator pitch from some of the founders of this, right? Is a little like, it's trying to court people who have some skepticism about like, the way that institutions behave, right? Like, like, Kalshi's co-founder, Tarek Mansour, I think is how you say his name. He's really positioned this as like, the wisdom of crowds because regular institutions have failed us, right? Because there's this plethora of information out there, because reporters aren't actually very good at telling or getting the story the way it is. Come here,

• 18:33Charlie Warzel?

  this will actually, like, not only is this a helpful tool, but, but that seems to recruit just generally people who are like, a little bit more edgelord-y or whatever. Like, is that accurate to you?

• 18:45Speaker 02

  Yeah, I think so. I mean, I think, certainly, not to, not to sort of underline this point, but I do think it's worth thinking about the prediction markets in two phases. There's, especially the, the ones around politics. There's the long phase before the election, whatever election is being bet on happens, which I think there is a, I don't want to put a number on it, but I think that the markets tend to lean right. Like, they just tend to overestimate Republicans. They tend to, uh, not by a significant amount, not by an amount that you can make a ton of money off of, unless you're like gambling a lot. But generally, they tend to give Republicans better odds and Democrats worse odds. That's phase one. And then phase two is like closer to the actual election. And that's, in my

• 19:28Speaker 02

  experience at least, when the smart money starts to roll in and people come through just to pick up, like, basically, they, they, they take the transition from the markets tilting Republican to reality setting in, and they make a quick profit off of that. And then by the end of the night, we know who won, and the, you know, the markets are settled, they're mostly settled. So I think that, yes, the culture, you know, in that sense, tilts right. I think that there's also sort of two aspects to, to why that is. The first is, is exactly as you're saying, that there is- A deep and longstanding philosophical affinity between predictions markets, the wisdom of crowds, so to speak, the idea that markets in general can calculate things better than institutions

• 20:09Speaker 02

  or humans can that dates back to Hayek and Mises. And this is sort of foundational to, not just to, you know, you might say neoliberalism in some broad sense, but also to a lot of the way that Silicon Valley has thought about the world since the 90s, right? You know, there's this idea that we don't want top-down people in charge. We want to, this sort of collective anarchic mass of humanity working together, you know, in a market or a quasi-market format will pull these together. So I think that's like, there is this kind of highfalutin, let's say, philosophical background here that probably pushes the prediction markets, the people who use them, and certainly the people who build them to the right, to the

• 20:49Speaker 02

  kind of libertarian, hard libertarian market-worshipping right. But there also is a particular sort of base reactionary-ness to a lot of what goes on there that I think is more tied in with, like, to some extent takes its cues from the sort of intellectual draughts that I've just been talking about, but is more tied into, one, like, being young and male and like gambling, like, again, you know, young men like to gamble, young men tend to be more right-wing. So I think that's, that's just sort of a basic demographic and sociological fact of 2025. They're also pulling in a lot of people from X, which is just significantly more right-wing than it was five years ago. And as I was saying, they also are, you know, without, without wanting to be

• 21:33Speaker 02

  too smug about it, they're trying to pull in through their marketing campaigns, pull in a lot of dumb money to make it attractive for smart money to come in. And they do that by advertising to the biases of the reactionary sonics, basically. So, you know, I sort of first became, I decided to write about this because around the time of the November elections, when Zoran Mamdani was running high in New York City, but as is often the case, there's a lot of people in New York who hated him, who were sort of, well, I don't think he's gonna win. I, you know, I think people there, as you were saying, the mainstream media is like ignoring, all my neighbors that hate him, all my neighbors are gonna vote against him. And Calshi started running, and Polymarket 2 started running all of these, they own these.

• 22:19Speaker 02

  They run these sort of news wire accounts, right? That are depending on the, on the, both the official accounts, but also like they have their own news accounts that they don't link to the, the betting sites, really. They just do these like blanket, like one line, almost like a Bloomberg terminal news thing that tends to be very misleading, very right wing. You know, in one case, Kalshi tweeted, sometimes they'll tweet about the prediction markets and they'll be like, you know, Zohra Mamdani's like position is, is tumbling. And that kind of thing is obviously going to bring in, you know, you could do that with liberals. I don't want to pretend that, that liberals in America are so much better at picking out misinformation and scams and whatever else, but it's very clear who they want to appeal to on Twitter.

• 23:02Speaker 02

  And it's like low social trust gamblers, basically, who are right wing.

• 23:06Charlie Warzel?

  Yeah. And, and also just like even beyond the, the political part of it, like there's so much, some of these accounts that run by these, these prediction markets like Kalshi and Polly market are, are just like trolling, right? Like there's, there's this one image of 49ers running back Christian McCaffrey with the caption, loves receiving balls, right? Like, and it was just like this big sort of like, like a, like a trader, like, you know, like on the disabled list style graphic, but it's just like, and again, as you said, they don't link to it, but it's almost just kind of like, we're having fun on here too.

• 23:41Speaker 02

  Yeah.

• 23:41Charlie Warzel?

  Why don't you come have fun on our place and, and go, you know, take advantage of this. But you talk about this, this dumb money and you described it in, in this great Substack post that we'll, we'll link to as the part of the male Suckerifcation crisis. And can you, can you elaborate a little more on that? I think, you know, that's sort of your corollary to the, the male loneliness crisis there, therein. But yeah, what are you, what are you saying here?

• 24:09Speaker 02

  I feel like one of the big stories on the internet or, and in society at large over the last five years or so, has been the extent to which young men have fallen under the spell or the sway of a variety of different kinds of scammers, hucksters, fraudsters.

• 24:26Speaker 02

  When I say a Suckerifcation crisis, I don't simply mean like, oh, you know, they're getting they're getting bilked out of their money, though I think that's part of it. I think there's a whole kind of both commercial and, you know, political kind of apparatus that is working really hard to, you know, separate young guys from their money, you know, and I think that there's something about, I don't have like a grand, you know, I couldn't, this is more of a corkboard and red yarn theory than it is like a like an equation, right? But I there's, I see these connections, I see these sort of basic dynamics play out in straight old fashioned sports gambling, which has sort of taken over sports media that, you know, was legalized a few years ago and now kind of dominates

• 25:08Speaker 02

  the way we talk about sports in the country, at least, you know, in the in the media that is written about sports and filmed about sports. I see it in prediction markets as well, like talking about this sort of Calci and Polymarket Twitter feeds that we're talking about, you know, the sense that this is this is gambling kind of creeping into even more layers of life, layers of social life. I see it in the kind of manosphere influencer guys, these sort of perennial subjects, objects of of moral panic. But, you know, the the main sort of dynamic I see there is not necessarily even kind of ideological radicalization on the part of somebody like Andrew Tate, but this the way that they are selling a particular story and a particular product to a bunch of young men that cultivates them

• 25:52Speaker 02

  as suckers, that turns them into suckers. And I think that Trumpist politics, by which I mean both, you know, the Republican Party under Donald Trump, but also all kinds of the sort of right wing reactionary politics, emerge out of the same sort of soup, you know, this sort of the the this highly emotive, this insistence that, as as you sort of put it earlier, that institutions are failing you, but we've got the cure, we've got the ticket, you can participate in this movement, you can show everybody that you're smarter than everybody else, here's the secret to making money, here's the secret to, you know, winning in politics, here's the secret to getting girls, whatever it is. It's funny to me how much you can sort of see that same dynamic across what should theoretically be these quite different kinds of spheres, but seem to in fact

• 26:36Speaker 02

  Kind of be converging on this one sort of business model, more or less. You know, I think about this to just to provide some historical perspective. Rick Perlstein, the historian, has a really wonderful essay in The Baffler from maybe ten, ten or more years ago. That I think about all the time in terms of this called, I think it's called The Long Con. And it's about the origins of the conservative movement in the 1950s. And the extent to which the conservative movement has always been deeply tangled up with. Basically, snake oil mailing lists that a huge like part of what makes powers the conservative movement is access to mailing lists of. Low social trust reactionary voters who are willing to buy what you're selling if you speak the right language, more or less. And I think this feels like, I mean, as I was saying before, I think Twitter feels.

• 27:21Speaker 02

  Sort of like a really sophisticated version of that. And I think that this whole kind of complex of businesses are finding new ways to sort of exploit that particular dynamic. And to some extent, I think this is a sort of layered process, right? That you go on Twitter, the it's a social media site, it's, you know, highly volatile. You're constantly feeling like everybody else is getting more views than you. You're constantly sort of feeling you're in this, this, this strange space that you don't necessarily understand. You know, you're, you're surrounded by people who are expressing that same strange feeling. It feels a lot like being in the economy too, doesn't it? And isn't politics also this strange volatile space? Surely there's a way we can all make a little extra money off of it. We're constantly in competition. It's like, as I say, it's like not a, not a, not a hard and fast theory.

• 28:06Speaker 02

  It's like this set of affective triggers, right? These sort of this vibe that's out there that seems to be quite inescapable. In particular for, you know, recent college graduates, kids in college, even in high school.

• 28:19Charlie Warzel?

  Right, and there's this way that it's this, this reinforcing system, right? Like if, if you do fall into that mindset, you know, you enter into. A place that, that sort of embraces the chaos, embraces the, the precarity therein, right? Is and, and then feeling all that gives you.

• 28:38Charlie Warzel?

  The only possible way out, right? The only possible latch on to, you know, a kind of, you know, new version of the American dream, which is just like, I buy this meme coin low, I sell high, right? I get, I get in this place here and it's, it's, you know, but that usually doesn't work out well for, for most people, right? A lot of the dumb money. And then you get back in this cycle of precarity resentment. Okay, now we have the, the antidote to that. And, and the cycle just repeats over and over again.

• 29:06Speaker 02

  Yeah. I mean, one, one thing I would add that I didn't really write about in this piece, but that has been something on my mind for a long time, because I feel it too, is a sort of increasing sense in American society that everybody else is getting one over on you and/or the system. And that in fact, if you let everybody else get one over on you, you are weak and you have made a mistake. You have, you know, you are a sucker. When in fact, I think it's kind of in, in many ways, it's sort of the reverse, that it's like, if you're constantly trying, like if you're the one who's constantly trying to get one over, you probably are a sucker yourself. And I mean, the, the root cause here, I would say, is, is sort of society-wide breakdown of trust in, in institutions, you know, in the sense that like institutions are in it for themselves and they are, you know, corrupt and giving handouts to the people, to their people and not to you.

• 29:50Speaker 02

  And again, this is also, this is the sort of vibe that seeps out and, and, and powers a lot of the kind of activity around, around predictions markets, but also around a bunch of these other businesses and figures.

• 30:02Charlie Warzel?

  I, I want to test out a theory on, on all this that's maybe another side of it, or maybe it's just this in a, in a different skin. But it's just very broadly, this idea that like a mature attention economy is, it's exceedingly hard in a mature attention economy to sell something, right? It is much because of all the, the competition for attention. And it's much easier to sell a derivative of that thing. I read this, this post a couple of weeks ago that was talking about movie marketing and how it's kind of just gone haywire. And this idea that, you know, stars are doing things that aren't, they're, they're not like traditional junkity where they're like talking about the film with 100 different people, but they are going on 100 different podcasts or, you know, video shows or whatever, and, and basically doing viral skits, right?

• 30:47Charlie Warzel?

  You can kind of start at hot ones, but then you can trace this to like Jennifer Lawrence and, and.

• 30:54Charlie Warzel?

  And her co-star, Robert Pattinson, there is doing like lie detector tests, right? Like a lot of celebrities doing like, like lie detector tests for Vanity Fair or whatever. And it's good content. People watch it. People are interested in it. It's good for like the, you know, the timeline, but it historically is like not selling these movies, right? Because they're not talking about the film. They're talking about themselves in the hope that they're going to garner enough attention to sell a film, right? And, and I think of that, that idea of like a derivative of something, I think about it, you know, very obviously with sports gambling, right? Like leagues are interested sort of in, in having this because it does draw attention to the games, right?

• 31:34Charlie Warzel?

  Like Adam Silver, the NBA's commissioner, wrote this op-ed 10 years ago or so, you know, kind of advocating to legalize sports gambling. And there's this idea that, that, you know, it will draw interest and attention to this event, but it's, it's interest and attention essentially to, you know, a game within a game, right? People are interested in hitting the over. They're interested on, you know, how many free throws, you know, so-and-so gets or, or, you know, misses or whatever, right? And it's, it feels to me like I, I'm curious if you, you feel this too, that, that it's, you know, we see it with elections, right? It doesn't matter so much about, about the outcome as much as it is, you know, getting

• 32:17Charlie Warzel?

  the edge and this idea of financialization of everything, just creating derivatives of everything to the point where it's like, it's almost impossible to sell a thing like.

• 32:28Speaker 02

  Yeah. I mean, I think that this is, this is part of the attraction of the prediction market over the regular sports book too, is it's you like, it's not just, to me, I guess it's not just derivatives, it's securitization and that you have this, you create this, this object that you can sell and resell at whatever, you know, I don't want to like drive the metaphor off a cliff or whatever, but one of the interesting things about those viral videos of say, Pattinson and Jennifer Lawrence doing the lie detector test, as you say, probably not very useful for marketing the movie, but that video is now useful to Vanity Fair or whoever it was that. That filmed it and will be useful to them for 10 years because those are going to be famous people that people want to see for 10 years.

• 33:08Speaker 02

  Lord knows there's no time limit for anything on the internet. You now have this thing that just kind of exists in the world. And I think that there's a real difficulty to sort of like, uh, to find ways to, to, to, as you know, as you put it, to like, have those derivatives to, to maintain their relationship to like the bigger project that's supposed to be pushing forward. You know, the, the other thing I would say, the sports thing, that, you know, what you were saying about sports makes me think is, is that, you know, part of this is about media in general, right? That there's, it were increase, it's increasingly difficult to figure out how, to pay for the media that exists and that we think of presumably as sort of integral to democracy, to our liberal democratic system.

• 33:54Speaker 02

  And sports arguably runs a little bit ahead of political media, news media, you know, in terms of business models and whatever else. And one of the big reasons that Adam Silver has been an advocate for legalizing gambling. And one of the reasons why all of the media companies, ESPN, chief among them, have so enthusiastically embraced sports betting, is that the, we sort of have reached peak sports, like we're a little bit over the hill and peak sports basketball is a very good example because this is, you know, Mark Cuban was talking about this just last year. Nobody thinks the next few TV deals are going to be anywhere, where anywhere near as lucrative as the last few TV deals are. Where question is who is making money and how are they making money? And that's not just a question for the team owners who will always make money from the stadium, right? And from the actual games themselves.

• 34:39Speaker 02

  But how is ESPN going to make money? And the answer right now seems to be gambling, like we're going to take gambling sponsorships. We're going to talk about gambling all the time. So when we talk about like, what, where does Kalshi and Polymarket, like what's, you know, why are, why is CNN so enthusiastic about bringing them on? I mean, they already are in fact partnering with Kalshi to, I think, or maybe with Polymarket to produce odds for, you know, like odds for them on election night and presumably elsewhere during the, during the, the political season. And so I think there's like, the, the other part of it, in addition to the kind of structural, the way we think about, you know, marketing and attention is to break things off into these little pieces that can be bought and sold in the last 10 years, is that

• 35:20Speaker 02

  we are facing a crisis for like how we pay for these things and gambling is a traditionally fairly lucrative, uh, industry to be in. And, you know, that's a way that CNN could take itself.

• 35:33Charlie Warzel?

  You don't, you don't want Cousin Sal to moderate the press going forward? I feel like, I feel like that's, that's a great idea. Um, I, the, the partnership is between, uh, Calci and CNN. And I think that, I think that you're absolutely right about the, the paying for it part of it, which is obviously the most important part. I also think that it is too, like, there is this attentional quality that like injects a little bit of, I'm trying to think about this, you know, it feels so dystopian having, you know, uh, I think CNN's Harry Enton, the, the polling guy is going to be the one that, uh, who's going to be, you know, doing the big board and, and looking through the, the Calci odds is, is what they've said.

• 36:17Charlie Warzel?

  And it feels, it feels a little dystopian to have that partnership, but also it injects, I think for them, trying to rationalize it in some way, like some excitement into something that, you know, I, I feel like when you said we've reached peak sports, you know, a while back, like we've reached peak politics too, right? Like we are well beyond peak politics where everyone is just sort of like ground down by, you know, how this works, but also kind of, you know, strangely, like terminally addicted to it at the same time. Like you can't, you can't quit it, but you, there's nothing in it. And, and this is sort of whatever derivative, a securitization of like, you know, it's, it's some element that I think also injects, like it is, people joke about like horse

• 37:02Charlie Warzel?

  race coverage and it's like, no, no, no, we're actually, we're making a horse race now. Like, yeah, like we're actually giving you a horse race.

• 37:09Speaker 02

  No, no, no, we just didn't have the horse race. The problem with horse race coverage was that we didn't have the horse race yet.

• 37:14Charlie Warzel?

  Right. And I think, I feel like that is, that is exactly it. I mean, do you, uh, our, our mutual friend, uh, and fellow tech writer, John Herman, wrote a, wrote a thing for the Nieman Labs, uh, year end predictions here for 2026 that the, the media will be, will become addicted to gambling, follow the path of, of sports media. It's very smart. Do you, do you feel like this is just going to get worse? Like where, where do you see this all moving? Is it just increasingly lawless? Like we're just gonna fall victim to all this? Do you, do you think this, this is like a, kind of like, like a fad? Do you, do you think this is maybe something that actually is like? The injection of capital that like these places need like, how do you sort of project it going forward?

• 37:59Speaker 02

  I, I am not necessarily as pessimistic, I could be, I, you know, I think that the forces arrayed in favor of the prediction market becoming a sort of dominant, um, you know, means by which we interpret and understand the world around us. Like there's a lot of money behind that and there's a lot of powerful sort of philosophical and political ideas that want to see something like this, you know, take a larger role in society. And the truth is like, in addition to, I don't even mean to make it sound that sinister, like from a banker's point of view, a stock trader's point of view, like having all these extra hedging instruments is useful. From the point of view of CNN on election night, you know, setting aside as, you know, the sort of question of how much gambling is going to dominate

• 38:44Speaker 02

  CNN, like the prediction markets give us something to talk about that is not that different in terms of its relationship to reality from polls, say. So all these, all this stuff is like, you know, the money, the philosophy, the use, all like, all that stuff is lined up in a way that gives prediction markets, I think, a big sort of runway to, to find themselves to become more and more prominent and to intermediate more sort of areas of life. That being said, you know, we've seen since 2022 is when I think sports gambling was legalized in New York. We've seen how much sports gambling has taken over sports media, how much sports betting has sort of become this, this ubiquitous thing

• 39:27Speaker 02

  in coverage. But my impression, but you know, and I think this bears out in most of the polling that's been done recently. So people actually hate this. Even the young men who are supposed to be the customers don't really like it very much. And I think that same quality is going to be true of prediction markets. I think there's a very particular, this is just baseless theorization right here. This is like, you know, my own version of like, uh, like astrology, but there's like, I think there's a certain kind of person whose brain works in a particular way. In this particular, let's say, Bayesian way where they are constantly thinking about things in terms of odds,

• 40:06Speaker 02

  where they are calculating in their own heads, you know, arbitrage opportunities and what kinds of bets they're willing to, you know, they're doing Kelly criterion bets and whatever, like calculations in their heads. And I think for those people, these things are incredibly exciting. I think those people are also like really heavily concentrated in Silicon Valley. You know, Silicon Valley and Wall Street, basically, like that's, those are the places you go if that's the kind of brain you have. I think a lot of the rest of us find it, I mean, I could speak for myself alone, but I know I'm not alone. That kind of way of being in the world, way of thinking about the world exhausting. You're not really thinking about the game, you're thinking about the over, you're thinking about the props that you've put together. You're thinking about the parlay across the three different games.

• 40:47Speaker 02

  I think that prediction markets being inserted everywhere else has a very similar kind of quality to it. You know, I, I wonder if there's a happy medium. I think with sports betting, what many people, I think, sort of just now, these days believe is that it should not be, you should, there should not be apps for it. It shouldn't really be legal. There should be a guy that if you, if you have the like social wherewithal to find, you can place a bet with. But it's not the kind, it shouldn't be the kind of thing where there's, they just like roll out the red carpet and there's like, you know, a lubricated path to losing all of your money. And I, you know, I'm pretty sympathetic to that. I don't know if that makes me an old man.

• 41:25Charlie Warzel?

  I think what you're saying, friction is, is a good thing, right? Friction, friction is, is, is helpful here. And these, you know, a lot of these, these betting apps, I, I actually can't speak to Calci or Polymarket, but some of the, you know, like the, the DraftKings FanDuel, you know, like they're literally sending push notifications of like, this is about to happen, you know, like whatever it is, right? It's, it's not even, it's not even neutral in the sense that it's easily accessible. It's like the bookie is sitting on your couch, you know, like asking you if you'd like to get in on this, right?

• 41:57Speaker 02

  Yeah.

• 41:58Charlie Warzel?

  So you have, you have that element. You have the, the idea that like gambling itself in, in, in all things, whether it's on elections, whether it's on whatever, like gambling is not a, a static thing, right? Every different type, there's. So many different types of gambling of ways to bet that that can give you, you know, slightly better odds or that are, you know, based off of skill instead of blind luck and sort of the the idea that the closer you get to like the the slot machine, right? Just pull and, you know, a couple of things have to line up. That's the worst, right? That's the the worst part of gambling and that what we are moving towards with this tech-enabled stuff tends to resemble that more than it resembles, you know, say betting

• 42:40Charlie Warzel?

  on, you know, who's gonna win in a golf match with, you know, your friends or whatever.

• 42:46Charlie Warzel?

  And and then I think, you know, you have this, I think you're right about the exhausting of it all. And it reminds me just of the of the nature of of all of of all of these companies, right? Like this, this, this focus and need on scaling, like a lot of these companies like CalShe just raised a billion dollars in earlier in December, you know, from some of the major tech venture capitalists. There's this, they're obviously going to need to scale. Their CEO said now infamously, you know, the goal is to financialize every single difference of opinion in the world, which, as you put, is like, patently, the most exhausting thing

• 43:27Charlie Warzel?

  you could imagine, like, no disagreement goes unmonetized is like, like, just end it all now. I think unlike you, I do feel like it's a little sinister, like, listening to you talk about the relationship of the risk, the volatility, you know, the gambling, the, you know, the sort of reactionary poking and prodding and trolling on on X to get you in the funnel to put you into this precarious situation. All of that, to me, actually feels like it, like it, it is bad. And that feels dominant to me over the, like, this is a really great way to, like, you know, get a bird's eye view of a complicated situation.

• 44:04Speaker 02

  Yeah, I should, I probably am being too kind. Like, I do, it is sinister, like, and I think that it's bad in an absolute sense. But I am also, but like, I feel like it's good, it's good to be conscious of the uses that it has and like the kinds of forces that are like arrayed in its favor. And it's not just a sort of philosoph, it's not a cash grab and it's not a kind of necessarily like a pure philosophical dispute that there are like serious institutions for whom this represents a windfall or a new method of doing what they do.

• 44:36Speaker 02

  You know, I wonder a little bit. A depress, let me, let me preface this by saying this is a sort of depressing thought that I'm not necessarily endorsing. But you know, one reason I think that sports gambling took off so, has taken off so wildly. And one reason I think even stuff like fantasy football has, um, which is, which is in some ways quite similar to gambling, but obviously also very different in important ways is the extent to which, uh, sports as a pastime or as an entertainment, um, represent a kind of, uh, like I'll take baseball for an example. Say that like baseball is kind of a solved game, like you have a pretty good sense, you know, at the very beginning of the season.

• 45:17Speaker 02

  Like you can, you know, the, the project, you, people are very good at projecting who's going to win, how many wins they're going to be. What you're waiting for is injuries and then, you know, the playoffs is basically, it's not basic, it's not luck, but it's basically luck. I say that, you know, it's probably the greatest world series of my lifetime this past year. Yeah, it's pretty good. But one thing that I think that gambling allows us to do in a world where, or in a world, in like the NBA, when like, you know, whatever, a third of regular season games, most of the stars just flat out aren't playing, which I know that the NBA hates, but is, but is also exactly what you need to do because that's a solved, that's a problem that has now been solved by resting people. You know, what you find yourself wanting to get the sense of, uh, you know, uh, volatility, the sense of unexpected delight

• 46:02Speaker 02

  and whatever else gambling becomes the way you get out of sports that what you maybe, what feels harder and harder to get as more and more money gets applied to like figuring out the secrets to winning each one of these. I'm not sure what the exact, like the way to apply that as a metaphor to the rest of the world out there. But I think that part of what the attraction here too, is taking things that are, have been optimized, like they've, they've been optimized to hell. Like whatever it is, you know, the things that no longer give you the same kind of frisson of enjoyment, because you know what to expect from them at all times and the gambling, you know, the prediction market, the gambling, the wagers,

• 46:41Speaker 02

  they give you that little extra burst of, you know, dopamine, energy, enjoyment, excitement, because all of a sudden you're, you're attaching some money to something that isn't the necessarily even the main point of the game. And I think that's like, to me, that's depressing because it's like, I don't know. I like partly because I'm sympathetic to it, right? I'm like sympathetic to that desire to try and find the same kind of enjoyment. But also because that's the thing that I think hooks people more than the sort of sense that, oh, I can find the edge by doing my calculations in my head and every dispute is going to be financialized and we're going to figure that out. It's more like, I just want to take a little risk somewhere, like a fairly safe risk, just to give myself, just to feel something.

• 47:22Charlie Warzel?

  Just to feel something. The thing that that makes me think about with sports, especially like, you know, especially in baseball, where like, we're about to go into a year from now, these, you know, major like, like contract, like, like labor disputes, right? With the unions is this, like, this inequality, right? Like, like, there is this fundamental inequality in baseball between the haves and the have-nots and the, you know, the big market teams and the, you know, the, the Cincinnati Reds are like, you know, what have you? And in that, like, you do have that situation as often in a fan base, right? Of, of like, okay, well, you know, if we make the playoffs, we're going to get, you know, absolutely destroyed in the first round. And like, that's that, and that's a good year.

• 48:05Charlie Warzel?

  And that's like, that's, you know, enjoy the ride, right? But it's like getting something else there. And then when I try to think of like, does that apply broadly out, like, to politics? Like, of, maybe not exactly, right? It's not like a total inequality thing, but it is this sort of like, this feeling like the system isn't going to move, right? Like, there's like, it's sclerotic in this way. Like, you're not going to get a candidate that's just going to come out of, out of nowhere, unless you have, you know, these instances like, like Mom Donnie.

• 48:33Speaker 02

  But look at how much energy, I mean, look at how much energy. I mean, even Kamala Harris's emergence, you know, in 18 hours as the Democratic nominee after Biden, had that burst of energy because it was such an unexpected historical event, even if she was, you know, like, not the most exciting candidate to young people in the world or whatever, and if she was the sort of, what exactly who you would have expect, the unexpectedness about it gave that extra bit of energy, to your point, I think.

• 49:00Charlie Warzel?

  I think that that is such a good way to frame all of this is this like in a world that's feeling like a little bit locked, right? Where everything seems a little locked, like this is injecting a kind of chaos that allows people to feel.

• 49:19Speaker 02

  Yeah, I mean, I think I really think that's real. Well, the other thing, I mean, and I would say two things on top of that. One is like, I think that's also part of, just to reconnect to some of the stuff we were talking about before, I think that's part of, it's relatively similar to some of the appeal of social networks, which have a volatility to them. And I think that one of the reasons that, you know, Twitter is less and Facebook too are less and less and Instagram even become less and less interesting to people is probably because they become sort of solved games. And there is like, you know what does well on the algorithm, you know what does well on things. It's much harder to have that pop of like, you know, the thing that you get really early on in a social network is always like, I've never seen something like this before. This is so weird,

• 50:01Speaker 02

  this kind of person. You could still sort of find it there, but that volatility, it's there in a certain limited way, but not in the same way. The other thing I would say is that this feeling we're talking about, like part of what's at stake, part of I think what's at stake is a sense that there's very little to surprise us anymore. And this is, again, a sort of a vibe more than it is a fact, but there is this vibe of like, everything's optimized to hell. Everybody is, for the most part, acts really cautious in their, in the given settings, the domains in which they're playing. It's hard to find surprise. Gambling at least gives us some level of, you know, allows us to feel something, as we put it. But what prediction market effectively do, like over the long term, is even eliminate that from gambling. Because what you're doing, like, once the market

• 50:46Speaker 02

  is big enough, once enough people are betting, all of a sudden, all the surprises are kind of gone, except for like, weather events, right? It's like the last thing that you could bet on where there's possibly there won't be rain, despite the 90% chance forecast the next day. And I think that's the sort of, like, it's self-defeating, I suppose. I don't like, that's a science fiction story more than it is something that we really have to worry about at this point. But it is funny that there's like, I think that the predict, like, ultimately, the point of the prediction market is to, like, reassert the primacy of like locked in predictions, even if, even if the current sort of, what makes it interesting right now is, is the enjoyment of risk and novelty and surprise.

• 51:26Charlie Warzel?

  I love the idea that eventually that the prediction market eats its own young at the end of it. I think that's a great place to leave it. Max Reed, thank you so much for coming on Galaxy Brain.

• 51:38Speaker 02

  Yeah, it was absolutely my pleasure. Thanks for this great conversation, Charlie.

• 51:46Speaker 00

  If you're trying to get news today, you'll find a lot of biased algorithms, rage bait and AI noise. Thanks, social media. That's where Inpress comes in. It's a social platform on top of factual journalism, not the other way around. Track your reading and earn points. It's like Strava for your brain. Plus, you can connect with other users in your city who share your genuine curiosity. Ditch the echo chamber for reality with Inpress. Download it today for iOS or Android at inpress.app. That's I, N as in news nerd, press.

• 52:19Speaker 01

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• 52:51Charlie Warzel?

  That's it for us here. Thank you again to my guest, Max Reed. If you liked what you saw here, new episodes of Galaxy Brain drop every Friday. You can subscribe to The Atlantic's YouTube channel, or on Apple, or Spotify, or wherever you get your podcasts. And if you enjoyed this, remember, you can support our work and the work of all the journalists at The Atlantic by subscribing to the publication at theatlantic.com/listener. That's theatlantic.com/listener. Thanks so much. I'll see you on the internet.

• 53:32Charlie Warzel?

  This episode of Galaxy Brain was produced by Nathaniel Frum and edited by Claudina Bade. It was engineered by Dave Grine. Our theme music is by Rob Smersiak. Claudina Bade is the executive producer of Atlantic Audio, and Andrea Valdez is our managing editor.

• 53:48Speaker 00

  If you're trying to get news today, you'll find a lot of biased algorithms, rage bait and AI noise. Thanks, social media. That's where InPress comes in. It's a social platform on top of factual journalism, not the other way around. Track your reading and earn points. It's like Strava for your brain. Plus, you can connect with other users in your city who share your genuine curiosity. Ditch the echo chamber for reality with InPress. Download it today for iOS or Android at inpress.app. That's I, N as in news nerd, Press.