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And I'm Kara Swischer.
We're off for the holiday today, but we have something good for You, an episode of Access with Alex Heath and Ellis Hamburger. In this episode, Alex and Ellis talk about the rise of storytelling in tech, and why X is now openly pleading for its haters to come back. As if. Then they sit down with Tarek Monsoor, co founder and CEO of Kalchi, to discuss insider trading, his rivalry with Polymarket, regulatory chaos, war spreading, and why prediction markets are having a real moment. Enjoy, and we'll be back in your feeds later this week.
You recently made a comment that went viral. I think you got a lot of heat for it. You said you want to financialize everything. Do you really mean that?
Why did you scare my grandma with that comment?
If you believe that markets work, what they do is they discover prices. But what if we applied it to some of the most important pressing questions about our future?
Should you be able to bet on anything? Kalchi is one of the fastest-growing companies on Earth, and it lets you do exactly that. They fought the government and won, raised billions of dollars, and are in the middle of a fierce rivalry with Polymarket to win the prediction market race.
Okay, power shift is brewing in the sports betting world.
What does this mean for sports betting and the gaming stocks? This week on the show, we have Calshi CEO, Tarek Monsur. We talk about insider trading, why Kalshi employees aren't allowed to use Calshe, what he thinks of Polymarket, and his controversial comment about wanting to financialize everything. But first, Ellis and I talk about the rise of storytelling in tech and why X is pleading for its haters to return to the platform. This is Access. Ellis, how's it going, my friend?
I'm well. How about you?
I'm good. We've got a lot to talk about today. We've got Tarek Monseur on the show, CEO of Calshe. But first, Ellis, I've been noticing that everyone seems to have FOMO about what you do, about being a quote unquote storyteller. That storytelling is the hot new thing.
According to the Wall Street Journal, at least, they had a big story. Was it yesterday? Talking about the rise of the storyteller and frankly, the decline of reporters. How did that feel? Going from earned media to Maybe we call it, Invented Media, Co-created Media, Masturbatory Corporate Media. One of the above. Take your pick.
This was one of those stories that got viral, screenshotted on X by a bunch of people we both follow in the tech world. Everyone glamping on about their savvy media strategy that they have. I just think it's interesting that this is becoming a hot topic. I think it signals where everyone's head is at, that in an age of infinite AI, everything, and products that all do the same thing, maybe the thing that matters is how you talk about your company. I don't know. You're the professional. You tell me.
Humanity has never been more important. What we need is storytelling. To me, it's nothing new. I feel like this is just the next evolution of content marketing and social. It's so crazy to me. I remember being back at The Verge 12 years ago and our friend Sam Scheffer was doing social, probably paid a pittance to do this, like every other social media person in the industry.
Shout out Hypedesk.
And that's all there is now is social. And fortunately, these folks are being paid a lot more now for the value of their work and their skill at packaging content to fit in algorithmic social feeds. To me, this whole storytelling revolution, I think, coincides with this whole idea of founders and creators It's being interesting. When you are telling whatever you have to say from the horse's mouth, it typically feels more authentic or more interesting than it's being translated by somebody else, whether it's a reporter or the social media desk or otherwise. So, yeah, to me, this is just the next step. I mean, selfishely, the way that I think about what I do is that it's more than just telling a story, but actually understanding all your audiences these days. As a tech founder, whether it's investors or candidates or internal teams or advertisers or in retail, even before your IPO. And so I do think there is a meaningful difference there. I guess when I reflect on this, I'm glad it's being appreciated. I'm glad people are seeing this convergence, I guess, of the way that we communicate with the world and just being real about it.
But yeah, I don't know. I mean, it definitely feels a little funny as the attention turns away from creators or even influencers and reporters in terms of how you get your narrative out to the world.
You can still get your narrative out to the world through sources. News. Thank you very much.
You bring immense context, I feel like to every story. If you're a company that has trouble translating their differentiation, but that is what a storyteller is in my mind.
Yeah, I don't know. I think founders should go direct more, but I think a lot of founders are wet blankets and have no personality and no ability to talk about what they do beyond the nuts and bolts of the actual thing. To really do this well, you have to be, I think someone like Tarek, who we have on later in the show, who can talk about it more at a high level. That takes a certain personality, it takes experience, it takes training. But yeah, I just think storytelling as a concept in the tech world becoming so popular right now with AI, I think, yeah, just to me, suggests that there's a lot of copycats and a lot of cookie cutter type things out there. I'm reminded of a quote that Ilya Seskaver gave the Darkash Patel podcast recently where he was like, Silicon Valley has more companies than ideas right now, and it does feel that way.
Yeah. When there's less differentiation or when everybody's building the same thing, the story becomes even more of a potential lever to hook people or just talk about yourself to the world more without pitching your product every day. That's really how I think about it. It's just a world now where everything is content. And that applies to us as well in the way that we package this podcast, what clips we choose, what platforms we post on. And in some ways, I think it's nice that it's a bit more of a meritocracy maybe than it once was where it It was all follow-driven and it took years and years and years to build followers, so you had any leverage. So I think that's the bright side of it. But yeah, when everybody's building AI rappers, it is awfully hard to stand out now, so we need to invent a new job for that.
Everything is content. Is that the first slide of your deck?
Kind of. I think the first slide of my deck, which is no longer as relevant as it once was, was like, If you build it, they will come, and it's just crossed out. And that was more of a hot take a couple of years ago. Now, that seems obvious. How's anybody going to use your app if they haven't heard of it?
I definitely feel this from my perspective of being an independent journalist now for just a few months, but the amount of outreach I've gotten from VC firms, startups, big companies that want to work with me on storytelling, and I'm like, No, thanks. You can just give me an interview. But it is a huge- Wait, you don't plug me in that conversation? I do if it's a- You had a perfect opportunity there and you didn't take it. No, I plug you a lot. I plug you a lot. But I'm not for the person to come in and brand the company. It's like, figure out how to reach so-and-so audience. I think of what you do at a little more high level. But yeah, I think there's a lot of people who think analytically and from an engineering mindset or a product manager mindset, but very few people who actually can step back and think about, how is this actually going to engage an audience? I struggle with that. It's something that I can rotate too much in one way or the other all the time in my work. You don't want to be overly, I don't know, programming, overly trying to game the algo.
We talk about this with the podcast and how we do the podcast, but you also want to be relevant. It seems like a very hard line to walk.
I think maybe in some ways you have had a bit less practice than others because you have scoops to lean on.
Yeah, scoops do help.
You don't need to sensationalize what a company is about when you are breaking news that has that inherent value. You know what I mean? Yeah. That is the core of the storytelling to me when I work with any client is in some ways just trying to find what's most newsworthy about them. And you are right. I don't know if I'd call them all wet blankets, but they all do think that what they're building is inherently interesting because that's why they're building it for 24 hours a day. I do think, as that Wall Street Journal article points out, the reporter's instinct to know what is going to break through, that's all you do every day. Three, four, five times a day. A bit different for you. You're probably spending a lot more time over the long term building these relationships. Sometimes the source will tell you something in a year that they may not tell you today. But back when I was doing it, it was like, especially a business insider when I was writing fucking five articles a day. Oh, I was there, too. Getting immediate feedback from the algorithm and also the clicks on the front page of what headlines are working.
Charpy. You get pretty good at understanding what type of language people need. But yeah, I guess one other nice thing about former reporters is that we also have some pride and dignity in trying not to completely give in to the tricks, if you will. I don't feel comfortable doing that. I think a lot of people probably do.
That's why we're all broke as reporters.
Yeah. I do think we embody a better balance than many others. Support for this show comes from Odoo.
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Right now in the world of AI, two things are happening simultaneously. One, the technology is getting better fast.
People are finding new uses for it.
It's more popular than ever.
And two, every company that makes AI is absolutely hemorrhaging cash.
On the VergeCast this week, we're talking about what OpenAI and other companies are doing to try to finally figure out how to make some money off of this technology.
Spoiler alert, it's mostly ads.
And we're talking about whether any it's actually going to work. All that, plus some stories about the Chinese company that appears to be beating Tesla on The VergeCast, wherever you get podcasts.
This week on Networth and Chill, I'm breaking down the essential money tips for every stage of your relationship, from the first date to forever.
Who actually pays on the first date?
How do you split rent when you move in together if one of you makes way more than the other person?
And yes, we need to talk about prenups. Plus, I'm sharing why believe in equity over equality when it comes to splitting costs. Whether you're single and swiping, moving in with your partner, or planning your wedding, this episode will help you navigate the uncomfortable money conversations that can make or break your relationship. Listen, wherever you get your podcasts or watch on youtube. Com/yourrichbff. Well, speaking of scoops, you want to talk about this interview I did recently?
Yeah, I wanted to talk about the interview you did. I mean, this was a good one, man. I mean, this is some stuff I've been wanting to hear for a while. So, yeah, Alex, you sat down with Nikita Bier, who is the head of product now for X, formerly Twitter. And nice to hear someone actually talk about what they're doing with a fine-tooth comb, an actual product builder. I mean, what do you feel like when you look back on this, you took away the most?
Nice to hear that there's someone there keeping the lights on and thinking about the product direction. Yeah, for sure. I've known Nikita for a long time. I would say he's become a personality in the tech world. He's this viral master of social apps who sold one to Meta back in the day, TBH, and then another called Gas to Discord. I think Nikita is hilarious. Like I said, he's in LA, too. We've known each other for years. But when he reached out and was like, Look, do you want to do an interview about bringing journalists back to X? I was like, Yes, of course. It was his first interview since he took the job about seven months ago. He reports to Elon directly Yeah, I thought this was interesting that this was the first thing that a senior leader at X is coming out and saying, which is we really want media and even capital J journalists to come back. I think I know why, which is that I've been covering Twitter before Elon bought it. For many years, I extensively covered when Elon bought it. Twitter has always had this problem where a very small percentage of the user base posts most of the content.
That's true for, I don't know, I guess Snap was a little different because that was messaging, right? But these one-to-many platforms, that's usually the case. But even by industry industry standards, Twitter was always pretty top-sided that way. They would call them like, I think they were V-I-T. A next tweet is going to-Very important tweeters? Yeah, something like that. Very important tweeters or something. They would track this obsessively because this factor would basically determine whether Twitter was working or not. What you saw with Elon, is obviously a bunch of people in the media left, including many of my peers and close friends in the media who, to be honest, made me feel like shit for staying on X. It became like-Same here? It became like a... It is a political thing. You had Blue Sky happen, you had threads happen, and this diaspora now where everyone's spread out, and like I wrote in this interview, and now I check three apps a day instead of one to find out what's going on in the world. That hasn't changed. Three years, it's It's crazy to think. It's been basically three years since Elon bought Twitter, which is wild.
Nikita basically just outlined with me that they're making changes in the products that he thinks will hopefully incentivize people to come back. That's a new link viewer that is driving more traffic to web pages. I can attest to that personally in my traffic sources.
Are they still completely shadow banning Substack links as they want?
So he says that's not happening. There's no shadow banning of certain link domains.
That was not a shadow ban. That was a public ban.
No, that was a direct Elon ban. And the interesting backstory to that at the time when that happened, that was again around the acquisition, was Elon was trying to buy Substack. He was actually trying to pitch Chris Best, the CEO, on being the CEO of a de facto CEO. I mean, Elon is obviously the real CEO, but the de facto CEO of Twitter. So there was, I think, some more stuff going on in the background there. But yeah, they doing that. Elon was banning journalists for reporting about the whereabouts of his private jet based on publicly accessible information. I think really stretching the definition of doxing to target journalists who were doing some pretty critical reporting of his acquisition at the time. Again, there's no fault or I have no qualms, I guess, with my friends in the media who have said, We're never coming back as long as Elon's running it. But But it's interesting to see Nikita say, Look, you'll get traffic. I mean, he posted, This is the biggest arbitrage opportunity of your career for your journalist to come back because we have the audience. I think it's like half a billion plus people a month coming to the platform.
Who knows how many of those are bots? But time spent is at a record high. I don't think that's true, though. You don't think it's true?
No. They have vacated so much of the newsiness, I feel of this platform. What I see most of the time, I'm very interested in news. Yeah, most of the posts I see are still from the last couple of days, but it has really become for better or worse, like TikTok for text or memes or what have you. I don't know if it feels like that for you, but I don't know. I feel like engagement is down when I post about anything newsy. It is very much just visual, opinion-driven stuff similar to the other platforms. It's just incidentally, who's still there? I feel like that's working. In a lot of ways, because the subject matter is a lot more personalized now as opposed to your follow graph, I think it's actually even harder to stand out.
That's interesting. I mean, that also speaks to what Nikita said about the algorithm.
Or maybe I just suck at posting.
No, I think what they've done is they've replaced the traditional algorithm, which had a bunch of classifiers and labels that someone like Elon could go down rank so and so, down rank this category of content or these accounts to this purely grock-based, which is for better or worse. Whatever that means. Grock-based, personalized, LLM-based algorithm that is entirely training on your preferences and your interactions. So maybe that's what you're telling X, you want, Alice.
Well, I am. But how many people are saying... I mean, I'm obsessed with the news more than most people. And it's good these days. I start engaging more like I started playing some old Mega Man games and I'm really enjoying them. And now I'm seeing really good Mega Man accounts doing niche memes and old artwork from the old games. That's great. All I'm saying is that they don't appear to be focusing, especially if they're not tipping the scales on news.
Well, I don't think they have a lot of news on the platform. That's the problem. That's why he was doing the interview, is they need the posters to come back, and journalists were the posters. Some of us have stayed. The reason I never left is because I think it's my job to be close to my sources. I named sources for a reason. The AI community in particular has never left X. To say that you're trying to cover this industry and understand what's going on and you're not on X and you're not interacting, to me, you're not doing your job well. Sure, you can still break news and you may not need it, but it still has been tremendously advantageous to me. I me from that perspective, and that's the main reason I've stayed on. But yeah, I think that's why he did the interview. It's like there's not a lot of news. It's all over the place. I feel like you go to... Do you check Blue Sky or threads much?
Not really. I think I see threads via the crazy cross promotion module inside of my Instagram home feed. I get Blue Sky links from a friend or two, but that's it. By the way, Great headline. I love X Wants its Hater's Back. Did that just come to you?
That just came to me. No LLM involved, actually. Yeah, thank you. I wanted a little bit of rage bait. This was like a classic Blue Sky rage bait story. I would say the vast majority of my peers in tech media are very active on Blue Sky and not at all on X, maybe some on threads. I think threads is actually trending in the direction of Reddit. If you look at what they're doing with the community stuff, the sports stuff that they're leaning into. Connor Hayes, the head of threads, is also going to be in sources this week, but he just did a podcast with a bunch of NBA people. I think they're going more in that direction. For X, they really need to convince people to leave Blue Sky, which I don't know. Blue Sky is its own echo chamber, man. You jump on there and it's like, you can imagine immediately in your head, this is what it takes to work on Blue Sky and to to be successful. It's a very particular POV on things. It's like you're very skeptical or you just downright hate AI, you hate Elon, you love Mondami. It's just like there's this Venn diagram of all these things that makes you on Blue Sky.
I wish we were all together again, I guess. Elon, he says he wants to make the town square, and he has utterly failed at that in the last few years. It's the opposite. I think everyone is right to be very skeptical of that not happening, I guess.
Well, to close things out before we get to the interview, did he divulge any juicy little funny Elon stories or habits?
No, he did not. We're going to have to save that for a future conversation.
You didn't ask?
I asked a little bit. He said he meets with Elon multiple times a week and that Elon is spending most of his time on X and XAI.
Is it still going to be the Everything app?
They're launching X Money, the payments thing that he said he was going to do when he bought the company. I think they're launching it this month for New Year's. So you're going to be able to pay the bots in crypto or whatever. I think it'll be fiat, but that's launching very soon.
Yeah, it is interesting to watch. I mean, these platforms, the features, as is long become obvious, are no longer really the differentiators, whether it's the feed or the DMs or the size of images or videos. It seems like it really has become who's on here. And that may, I think, be fine for companies of a certain scale, depending on their ambitions. But I'm hopeful that these different platforms can emerge for different communities, though I really do miss that moment of monoculture where everybody on Twitter was live-tweeting the Oscars or the Apple event or whatever it was. There is no place for that these days. And that was a special moment. I wonder, though, I guess that was the idea Twitter that didn't allow them to grow to the size that their investors wanted is that not enough people wanted that.
I think Twitter didn't grow for a lot of other more practical just bad execution reasons, but that's a whole other conversation. All right. Should we kick it to Tarek?
Yeah, let's do it.
Tarek, we were joking while we were waiting for you that we should have started a market about what time you were going to join.
That's nice.
I don't know how specific the markets are getting these days. Do people make them for such specific things?
No, nothing like that. But There are certain things that people have interest in that could be about... Well, nothing about someone who works at the company or anything like that. Also the people at Coush can't trade because We run a regular exchange, so you cannot actually trade.
Oh, really? You have a no trading rule.
It's also like the regs, the regulatory framework doesn't enable us to trade on one exchange. It's an interesting thing because it's hard to build a product when you can actually really use it. It makes it a little bit harder. So there's that interesting dynamic.
Have you talked about that before? How do you do that? How do you build a product you can't use yourself?
I just have to be very close to the customers. Really be very... I mean, it's cliché. All I know a lot of companies obviously talk a lot about staying close to the customer. But I think this is especially true here where you just have to really be, at all times, as close as possible to the customer to basically figure out what you need to build and how to make it better and what are the points of friction. But there are some industries where the technologist or the product builder cannot fully experience their own product. It could be in a hard tech or if you're in a machine You're not sitting in the office and operating some heavy machinery. You also have to really embed yourself with the customer. But I think it's feasible, but it is a challenge.
Do we believe that Tim Cook is actually using the Vision Pro in his office or not is the real question. I mean, that does strike me as pretty remarkably tough, especially when things are moving so quickly. I do believe that having worked at Snap in the browser company, that founder does have a unique to make changes in the product when things don't feel right, whether it's with the way a screen flows or a notification or otherwise. I've definitely come to believe over the years that dogfooding is a pretty critical lever. I wonder if there's any way to say, Hey, my friend, you're about to take a sabbatical for a little while. You're going to gather some feedback, use the app for a while, come back. But I guess that would still be biased, wouldn't it?
Yeah, but also it would work. You have to have a six-month post-calchee period. If you leave, you have to wait for six months before you could trade. But there are ways to… You could still use the app without trading. That could get you a lot of the… I mean, that could a lot of the flows, except for giving me the core trading flow. Then we have an internal demo, no real money, free money version of the product. But that's also different. That also has different dynamics. We get close, but It's not quite there yet.
Same product, no dopamine.
The whole point is having skin in the game changes the behavior of people. That's the whole point. It goes back to the whole question about polls versus prediction markets or experts versus prediction markets. The whole difference is there's some skin in the game here. If you take out the monetary incentive or this idea of what your money or your mouth is, then we default back to a regular your pull. People can just say anything. The whole truth-seeking aspect erodes. You can bring back the bias, bring back subjectivity. The money component is a critical component to take you from the subjective to the objective rational plane. So it's a difference, a big difference.
I think if your employees were using it, they'd also be spending a lot more time in the bathroom as well.
As they were, maybe, yeah. They'd be distracted.
I was reading recently about how companies are deciding whether or not to ban prediction market trading for their employees as well. So it's interesting to hear that Kalchi bans it. I actually was reading, too, that Google built its own internal prediction market. And that this is becoming more common. What's your advice to companies weighing whether they should allow their employees to use your product?
I guess it's okay. Look, the same rules apply. The rules that apply to the stock market, generally, mostly, basically the same rules apply to prediction market, or at least regular prediction markets, which is the case for Calchi. It's an important distinction to be drawn. From the early days, from the day one, we're in financial services and we're offering a financial product. I think in that industry, I would say regulation is a very critical component or pillar of how you build things. We define a principle which is regulatory first. We're going to do everything regulated upfront. What a regulatory means, the thing at a high level is, figure out customer protection, make sure that people understand what they're getting into and what they're doing. Number two is market integrity or this idea of fairness. Create rules that are fair for the different participants. It's right if you're getting into a game that is not fair, you don't want to participate in that, or whether it's anything in life. You have to create it like the stock market, a set of rules that make it fair. Like the stock market, the way that we've regulated this, we worked for four years before we launched a single product, so working with the CFC, which is the federal regulator, to regulate this like a financial market.
You have the same set of prohibitions. Market manipulation is not allowed. Things like wash trading, spoofing, and then this notion of insider trading and what it means, what is insider trading and how do you define it. That is regular, like the stock market. We have the same We have a set of protections. We have systems that flag for these things. Then if you flag somebody who had committed it, it could go from a fine to... If you committed inside trading on a stock, it could be a financial crime. It could be a criminal prosecution. It's an interesting question. When it comes to companies, it's very similar to... If you are an employee of a tech company and you know something about the quarterly earnings, you cannot buy options based on that knowledge. The way to draw the line is essentially like, you cannot use material, nonpublic information to trade. What does that mean? It's basically you cannot use information that is not supposed to be public. That is like, you are not supposed to make that information public by trading, because actually trading with that information is in some way one way of making it public.
You can go make information public by saying it to the press or saying it to friends. But another way is actually trade on it. Because if you trade on it, you're moving the price in a certain direction. That's another way to make it public. The same rules apply to calchi. That applies to people, other companies, government, members of, for example, Congress, if they have an impact or knowledge on a specific bill or something that they are themselves doing. It's a case-by-case. It also applies to sports.
I was just going to ask, has anyone ever been fined or sent to the slammer then for something on Calshi?
A few things. Because we've... Okay, why do we take this whole regulator approach? We take this whole regulator approach because we believe this market could be very large, and we believe that the only way to go mainstream, really, is to build it regulated, regulated rails so that institutions, big partners, can adopt it over time. But then the second thing is that you want to build something with the right set of safeguards so that you mitigate and avoid the risks to happen. Any new technology, especially financial technology, comes with a certain set of risks. That's always true. Self driving cars, Uber, Airbnb, all of it comes with risk. Regulation, what it does is it is a forcing function because you have a regulator that has decades of experience that have seen how things go wrong, whether it's in drugs or in financial markets or whatever, to basically pressure test your systems. We've done four years of pressure testing before we went live. Now, since start to finish, we started in 2019. Now, we're basically 2026. It's been seven years of pressure testing the system. The systems work really well. It's working as intended. You see, you probably have noticed, you don't really...
There haven't been cases of people doing bad things on cash because it was very regular. We asked you for your KYC, all the trades were reported to the government. It's a bad place to try to commit fraud. There are other alternatives offshore, unregulated, and it's an easier way to do it. If you want to do something weird with crypto, you probably won't go to Coinbase. You'll probably go to some offshore exchange that offer similar services because there's no KYC, they don't know who you are, they don't report things to the government. That's one. I think, in Calgary, those risks are very largely mitigated because of a regulated nature. Two, there's something else that's interesting, which is the rules for an exchange. We're an exchange which is an SRO, a self-regulated organization. You have to have a bifurcation between the commercial business aspects and the market surveillance regulatory functions. The market surveillance regulatory functions report to the CRO who reports directly to the board. A lot of the specific cases actually I'm not privy to. Yeah, it's interesting because you don't want to have a conflict of interest. For example, if it's a big customer that did something wrong, the business may want to be like, Oh, maybe you should.
But the rules say actually there's an information wall between those two so that the regulatory side can interface with the regulator and the audit committees, et cetera, independently of the commercial side, so they have full autonomy.
Wow. So not only do you not get to use the products, but you don't actually know when people misuse the product, it sounds like.
Well, the relevant team, including, exactly, the chief regulatory officer, no, but the commercial side doesn't know. And this, by the way, this is common, for example. You know how at Goldman, so at banks, you know how the trading side and the banking side cannot share information between each other. I guess the trading side can share with the banking, but the banking cannot share with the trading. It's the same thing, I guess commercial can share with the regulatory, but there's somehow Some set of information the regulatory cannot share with the business.
Are these regulatory bodies equipped to investigate potential insider trading on this scale as the number of things that you could bet on or trade just dramatically multiplies?
The answer is definitely, look, the CFTC, it's interesting. People talk about the scale of prediction markets. But look, this year, prediction markets have grown massive, to be clear. Right now, I think Socalci is doing something like $70, $80 billion of volume a year. The broader industry maybe is $150, $200, $200 billion with millions of customers participating. But then let's compare that to the commodities markets and the swaps markets that the CFTC regulates. Actually, let me ask you, how much volume, notion of volume do you think goes through the Chicago Mercantile Exchange a year?
I was more interested. I don't know the number, but I think maybe the more relevant number is volume per trader per se. It's still pretty small for Cal sheet.
It's tiny.
Right. And so that's what I'm saying. I realized it might be smaller, but I think the number of potential retail investors or just everyday people who are getting involved has just got to be on a very different scale, I would think.
I mean, that number that was going to mention is a quadrillion.
Haven't heard quadrillion on the podcast yet. We need an airhorn or something.
It's 1,000 trillion. So The CME does $3 trillion a volume a day. It's a massive market. There's very large diversity of participants in the US and outside of the US. Some of it is institutional, a lot of it is retail. Then you have the S&P futures, you have a bunch of different products. But it's a regulator that has overseen mass amounts of data, mass amounts of transactions on a daily basis across the board. Yes, you could have a composition. I think it's We still have a concentration of volume amongst the prosumer traders or institutions. These things are not uniform. It's not like you have 100 traders that do equal amount of volume. It's very tilted. It's also existing in the traditional markets. You have a long tail distribution or a skew distribution. But the important thing here is actually, and this is very interesting, when people look to commit fraud, they don't do it for like $10 or $20. They usually try to make money out of it. Otherwise, why are you violating the law? The fortunate thing about that is that the larger the size, the easier it is to flag, the more unusual the pattern is.
When someone, for example, goes out, when you hear about the SEC investigate some insider trading, it's because you see some trader at a bank bought an out-of-the-money option two days before earnings, but that option, they bought millions of it, or they bought a large size. That usually is actually pretty… It's a problem that's a much easier one to solve.
Not very sneaky, realistically.
It gets flagged. It gets flagged. When you look at it, it's like, Who are you? Who do you know? How did you get this information? And then you can escalate to investigations in the regulators.
So in this context, people are probably seeing headlines recently about there was this trader, I think the name was Alpha Raccoon or something, who net it over a million dollars by very accurately accurately predicting Google's 2025 year in search rankings to the extent that this person probably worked inside Google. But that happened on Polymarket, and you don't actually hear stories of this, or at least I haven't seen stories of something like this on Calshi. Maybe I just haven't seen it. But I imagine for you, you get lumped in with those headlines, and it's like, Oh, prediction markets allow insider trading, blah, blah, blah. Why did that happen on Polymarket and not Calshi?
It's the same as It's the regulated versus unregulated model. I always say this. It's like, you can take any financial market. You can take the stock market, which a lot of us perceive is regulated, and there's the right set of rules, et cetera. If somebody offshore opens up a stock market without KYC, without the same level of protections, yes, things are going to happen on that marketplace. The thing I always say is there are bad actors everywhere. The bad actors are like, they They'll always try to find outlets to do bad acts. That's what they do. There's this key distinction between regulated and unregulated. I think generally with nascent technologies, people merge the two and treat them as similar. You see, it's always with crypto. They were good actors in crypto that were doing things regulated. Sometimes they had challenges with the government. Coinbase had all sorts of challenges with the government, but that was a good actor. It was like trusted, KYC, you know where your money sits and you can trust us with it, and we report to the federal government and so on and so forth. Then they were offshore actors where you could put your money and you have no idea where it's going.
You have absolutely no guarantees that that money could be going to somebody's pocket, it could be going whatever. But for new technologies, people, if something goes wrong in the unregulated piece, they can lump the entire space in one. As you said, it's totally right, Alex. I totally agree with this. It's a matter of education. It's a matter to show that, look, there are actors that are going to do things the right way, and then there are actors that may have started to do things in maybe not so much the right way, and over time, they converge. But the most important thing, and maybe this is the thing that we're getting at in some ways, if you want to commit a bad act, you're not going to do it in a regulated exchange? We would know the name of that person. We would investigate that transaction. We would report to the government, and everybody could see a transparency. You would prefer doing it by paying somebody in some crypto and not traceable, like dark web thing. That actually reinforces the importance of a regulated transparent model for this, because then all the activity is out there for everybody to see, and we can work with regulators, and we could put the right set of checks and balances and enforce them.
Yeah. You all are really big, but Polymarket is, too. And it's actually amazing to me the amount of mind share Polymarket has in the tech community, especially, considering they're not officially launched yet in the US. I was just at the Deal Book Summit in New York where Russ Sorkin was talking about Polymarket from the stage. Constantly, the all-in guys talk about them. They're everywhere. Chain is everywhere. I really want to know how you feel about that. I have to imagine Polymarket being so prevalent in the mind of the tech community specifically bothers you. But how do you think about that and your rivalry with them right now?
I don't know if it bothers us as much. I would say a few things. The number one metric we track is not really mind share or I don't know, like visits or other. It's like actual number of users, volume, financial half of the company, and do you have a real business? I think from that perspective, we're much larger. There's a bunch of ways to measure that. You probably have seen the charts coming around and other. To us, that's the most important thing. Number of users, real volume, real revenue, financial metrics. It's interesting because last year, if you were to look at the mind share of Calgary versus Polymarket, we were probably 5% to 10% of the mind share. There's ways to measure. You can look at Google search, for example, how many people know about a company versus the other. It was a tough year because in 2024, in the early 2024, really that similar dynamic was happening. We, again, stood firm by a principle which is regulatory first. We are not going to do anything that is outside of the bounds of the law. That's a principle we're never going to deliver on.
You didn't want to be a shoot first, ask questions later, tech company?
Just financial services, I don't think is the right thing to do. I really think financial services, the long-term winners are like, measure twice, cut once, do it right.
It's one thing when it's burrito taxis, it's another when it's financial services.
It's very different. It's very, very different. Because in financial services, when things go wrong, they go wrong in a bad way. You really need a regulator and you need a regulatory oversight. It was hard. Last year was hard because they were getting the mind share because they launched the market. They just did it. There's There was a whole debate whether it was in the US or not. Obviously, a lot of people were in the US. But because they had the market and they had the offering, obviously, they scaled much ahead of us. They basically went ahead and before us. That was a difficult period for the company because That was, I would say, the most difficult period because we were hamstrung, being told no by the government. Then you had a competitor that's doing it. You've seen this, I think, Qwomis had their fair share of competitors that operated that way, and that happened over and over. It was tough because you go to the regular, you're blocking us, but you're not blocking them. How is this fair? That was, I think, the toughest part of the journey. But the beauty is when we won the lawsuit last year, so we sued the government over the election market, then we won that, and we were on the right side of the law.
The market share obviously changed, but the mind share now, when we were looking at the metrics for this last quarter, like the fall, were actually something like 55% of the Google searches in the US. We've actually overtaken even in mind share. For a while, we've been leading on the core business metrics and the product and the team, but now we're also actually at least equivalent in terms of the mind share. We've gained a lot of territory there. It's just a matter of time. I think at the end of the day, everything will converge towards a better product. I feel pretty good about our product.
Do you think Polymarket is doing things the right way?
I think that's on them to comment. I think that like...
Oh, come on.
I mean, look, our view is we approach it differently. I think we approach it regulated in the US, do it right as a US company. They did offshore and the VPN thing and all of that. That was the historical thing. I just mentioned, that was a source of difficulty for us because it's like, we are carrying all the burden of legal mobilizing the space, which was so tough. We spent four years, and it was really a very, very difficult journey to make this happen because you had the battles with the government, and they were pushing us, and they really wanted this model to exist without a lot of real basis. Then you had a bit of a dynamic where the opponent or the competition had no restriction whatsoever. It's a bit like you're in a boxing ring, and then your hands are tied behind your back, and then you have to You have to go box, right? Whereas your opponent doesn't have their hand tied behind. They may even have a knife, right? You're just in that ring. That was tough. There's no secret about it. We had a history, our history between the two Two companies, as you know.
Yeah, it's a very fierce rivalry, I would say.
It was a very fierce rivalry because of that dynamic, right? It's like you're sitting there and we're getting bloodied here and you go to... People weren't realizing it. It's like, Guys... It's It's not like customers or others give you props to try to do things the right way. That's the tough part about doing things the right way. It is hard. It's not the easy route. It's not like you do it and then people are like, Great job. Congrats. You did things the right way. Actually, no one really cares until it matters. No one cared For example, FTX was the golden child for a while up until it blew up, and then everybody cared overnight. That was the hard part. Look, we made some mistakes as a company. There were some incidents where we made some bad tweets about them, and they made some mistakes, they made some bad tweets about us. There was a lot of this back and forth where we would go to press, they would go to press, and so on and so forth. At the time, at least in the 2024, we just go up to the press. The area is Guys, do you not see this dynamic?
We are being blocked from doing anything, and then they are not. How is this fair? How is this happening? That was, I think, deeply frustrating. I think this year, well, one, we learned from our mistakes in the past, but now we're also a very different paradigm where we did actually win that lawsuit and legalize the space. We did open up the space in a legitimate way. There's a real way for the space to exist in a regulated, safe, responsible way now. It could become legitimate. I think that changes the dynamic because... Well, one that was very It was advantageous to us. It was a huge boost for us as a company, obviously, in the results. But it was also beneficial for them because now they have a path to come and do it the right way and do it regulated and legal. I think it seems like this is the path they were doing. They're trying to converge. They're pivoting towards our strategy. I think that's a good thing. I hope they stay committed to that because I think over time, both of us will push the space. As long as there's fair and reasonable competition between the two of us, I think this is going to be great for the both of us.
If you would have told yourself 10 years ago that you would be suing the government and be on South Park in 10 years, what do you think you would have said?
I mean, it's just an absurd problem. It's also how do you relate those two, right?
You're like, Is this a good outcome or the world's worst outcome?
I think it's a pretty good outcome. I think that the Well, I would just dissect that for a sec. I think the suing of the government in the south part, they're both interesting, and they talk to two different things. Suing the government is interesting because not many people do that, especially your own regulator. But the beauty about the US is you have that system. The government has checks and balances, and that's an amazing thing about our system. It's like none of the three powers that may be have full autonomy and full power. They self-check and check each other. We disagreed with the regulator's assessment. These markets, the law was clearly saying they were legal. I always say this, I think the law applies to the industry, to participants and people, but it also applies to the government. Sometimes this is missed. The government is not the law. That is the law, and the law is something that we all have to apply, including the government. We disagree with that decision, and I think we were bold enough. It was a very difficult decision. I think senior government comes with a lot of cost, and we were hurt pretty dramatically by that.
But we won, and we were right. I think that's number one. I think that's a beauty. I came from Lebanon. That is something that would never happen in Lebanon. The notion of, I disagree with the government, I'm going to go sue it. It's like, where do you even go? I don't even know. If you walk into the courthouse with a lawsuit in hand, I don't even know. I think they turn it into a cigarette, maybe. The Southwark thing, I think, is just a statement that we build something that has gone mainstream. I think that people care about it, and I think that's But I think it's been a wild ride to get there.
How do you think about Kalash'a as a part of everyday life? It seems like everywhere you turn, there are billboards, Instagram ads, even on the Apple Sports app, they've got betting lines. I know you guys do a lot of advertising. Certainly, I'm seeing a lot of the advertising about sports betting on NFL and this and that. How does it feel to have this a part of daily life? I think on the one hand, it is very fun. On the other, I think I have seen some ads that talk about creating a side hustle or passive income, whether it's from you guys or others. How does it feel to be a part of that reshaping of how people interact with financial markets?
The way I'll answer this question is I'll go back to the core of why we started the company. I spent time in financial markets, like at Goldman and at Citadel. At Goldman, the thing that struck me is the large institutions. I was there in There were two big events in 2016, Brexit and then the US election, so the first Trump election. All the big guys, what they were focused on is essentially, I want to get exposure to Brexit or hedge against it, and then I want to get exposure to Trump or hedge against that. Then we would create these financial bundles and all of that. There were three issues. One, we gave them the wrong products. The traditional financial markets don't get you the exact yes, no, is Trump going to win exposure that they were looking for? One of the big things We sold is the S&P if they wanted to go long Trump. People were right about Trump, and then they lost money. It's horrible. The second thing is there wasn't an open, fair market for people to price this question. It was just the bank deciding, and it would charge crazy fees.
It was exorbitant. The third that hurt me the most is a lot of people have views on this. Also, a lot of people are impacted by Brexit. It's this notion that you are only impacted by Brexit if you're big enough to get a seat at the Goldman Sachs was a bit weird to me. It was like… But this is where the idea was like, you have a financial market to price companies, commodities. What if you built one to price… Simple questions about the future. If you did something like this, The beauty of this is areas of expertise. Everyone is an expert on something. Areas of knowledge and expertise and passion lie in a much broader set than just Wall Street. There's a lot more people out there, outside of Wall Street, that have views and have knowledge about politics. I have knowledge about the economy. They read the news every day and they love it and they love interacting with the news. It could be the culture, it could be sports, it could be any of these categories. But right now, it's this The set of instruments is very Wall Street-specific. An average person is not going to look at an interest rate swap and be like, I'm going to participate in that.
It's just too complicated, very unrelatable. I think the thing that's changed and that's great, For example, there's this account on Twitter. It's only grounded 10 or something. This person basically has made $70,000 trading on culture, culture markets, so how successful movies are going to be, what Taylor Swift is going to release or not release. They paid off their student loans with that. It's just their favorite company. They love the company so much because they're like, I have spent hours days and weeks and month learning about this. Up until now, it was a fun side thing. Now I can actually exercise my skills and it could become a hobby and I could try to make money off of it. I see this very similar. It's Uber's value proposition with these types of marketplace, new category creators. Uber was like, You have a lot of free time. How about you ride a little bit and make some money? I think in our case, you have a lot of knowledge, sometimes very niche, weird knowledge. Maybe even your family doesn't even want to hear about it at Thanksgiving. But how about you try to make some money off of that?
From the beginning, it's like, If we can build that financial market in a regulated, safe way, where you put the right set of customer protection and you let people openly and transparently trade against each other, that could be a very interesting thing because you can have this social crowd-sourced, let's figure out the truth together. Let's figure out the price the same way that markets figure out the price of.
When you talk about expert knowledge, I know there's this idea from Warren Buffett and others that when it comes to the stock market, nobody knows anything that isn't already priced in. Do you feel like that's different? Maybe could you call it a long tail of topics? Or you feel like that dynamic is different if you're making that proposition to people?
That's a great question. I actually think so. It's interesting. Let's think about it in simple terms. If you go to the stock market and try to buy an option on Tesla, how could you know more than the market makers. I actually worked at some of these. How could you? It's rigged there. It's like there's asymmetric information. The large institutions, Wall Street has more information about where options and stocks are going to move than the average person. It's a truth. No matter what you do, you could do all the research in the world on the stock, you're not going to have the vast data sets and pools of data that the big hedge funds have. They will always have an advantage over you. To me, it's that imbalance of advantage that make it like... It's very hard to actually gain an edge if you put effort into the stock market. On Calgary, it's different because there's a team of traders, for example, on the weather that scrape satellite data, and they create correlation patterns, and they have meteorologists in the team, et cetera. They figure out all these sophisticated data science models to predict the weather next day.
They are making money of it. They're pretty successful. And the beauty of it is I don't think the hedge funds have any more information than they do. You could call that creating the fundamentals, if you were, or doing the work of understanding the fundamentals.
The fundamentals. That's where the truth side comes in.
I have studied Timothée Chalamet's eyes more than anyone, and therefore I know that he is SKD, right? That's what you're saying. There's people who may obsess about things. Is there a calcio for that? That's got to be a prediction market, right? Chalamet and SKD. Do you know about this?
I don't know about it. What is it?
There's a rapper who is in disguise, and people think it might be Timothée Chalamet.
I don't know. That's interesting.
People claim to know his eyes and say that it's him.
These markets reward people to go out and do research and then bring it into the open market. Over time, we get holistically. So think about, for example, whether terrorists are net or net bad for society, or whether there's going to be a recession this year or not. One way to do this is you go and do this Bloomberg Economist survey, and you ask a bunch of experts, Hey, what do you think? Then they give an answer, and that's our forecast. That's historically been, this is what we believe to be true. But it doesn't work that well. If you compare that to the Calgary economic forecast over the last few years, we have been much more accurate. It's just much better gage of what's going to happen. The reason is because it's a very It's a different mechanism, which is now I'm giving an incentive, I'm rewarding people to actually go out and do research and then come and trade on it, bring it to the market. If you think of it, that incentive at scale, it's holistically making us smarter about, for example, the economy. It's making us smarter about COVID and whether it's going to come back.
Maybe this whole COVID episode of whether, Hey, COVID is done, COVID is not done. If they were listening to the markets, we were saying Omicron is going to come back. There's an Omicron wave, and it was going to come back because some traders were doing research, and they spent a copious amount of time. It They're not necessarily, by the way, doctors or people that you would imagine to be the COVID experts. The people that maybe love the topics and spend so much time in quarantine reading about it, and then they brought that information to market, which is very useful. And if we had listened to the markets, maybe we would have kept the mask on for a little bit longer and we might have avoided the second wave.
Before we let you go, Tarek, you recently made a comment that went viral. I think you got a lot of heat for it because people rightfully have concerns about the gamblification of society where you said Amplificage. Yeah, trademark. You said you want to financialize everything. What did you actually mean by that? Do you really mean that?
Why did you scare my grandma with that comment?
Interesting. I think that, yeah, I saw that. It was taken out of context and people took in all sorts of directions. But really what it means is this notion of if you believe that markets work, what they do is they discover prices. They're very good mechanism for discovering fundamentals. I think, as you said it in a great way, fundamentals behind something, and then uncovering as much truth as possible behind that thing. What we're saying is, sure, applying that to companies is very important. Applying that to commodities or currencies is very important. But what if we applied it to some of the most important pressing questions about our future? Could we apply it to a much broader set of things? Look, from first principles, we live in a world where the The ratio of noise to signal has gone up a lot. Misinformation is everywhere. Polarization is an all-time high. People say different things about everything, and you don't know what to... If you go to my Twitter feed versus yours, we might see literally two in It's highly different versions of the word. To us, this is a bit of an antidote. It's like, how about we apply some of the things that we discussed, this mechanism for truth, this incentive to be truthful, to be unbiased, to be objective, to a lot of these questions.
Is there going to be an earthquake in California? Where is the hurricane is going to hit in Florida. Covid is going to be a recession. These questions that do actually impact people on their day to day. But today, it's like social media where the incentive is engagement, whereas prediction market, the incentive is truth. That's really what I meant by that. But I think that clip was taken out of context, out of a broader explanation that I was giving.
Do you guys have a mission or vision or document for your own team to steer people toward whatever type of truths you think are important? Or is it just going to be driven by engagement, culture, excitement? Because I feel like that's potentially a pretty big question for you guys in what type of role you want to play in the world.
That's a great question. So yes, the answer is yes, definitely. And I think that The way that I describe it is you have to have a balance. And there are certain things that, for example, may be more engaging but less useful from a truth-seeking perspective, but that help the things that are less engaging but more truth-seeking from a forecast perspective. You have to balance out between those two. It's a bit like... The example is you can look at a lot of marketplaces. For example, maybe where Ubers are most needed are in urban areas, but that's where it's harder to get riders, and they're less needed in... Sorry, rural areas, but it's mostly in urban areas. But you still have to build a critical mass in urban area to get to the rule. I think it's a little bit similar here. You have to get enough of a critical mass in a certain places to basically get, for example, personally, I'm always interested in the more longer term forecast. The things that are like, will AI overtake? Will we get another-Not when the McRib is coming back this year? What is McRib? Is it the burger?
Oh, my God, correct. Good for you. Who exactly is making these calls about what goes live on the site?
Then the second point I was going to say, a lot of it comes from our team that are figuring out what's trending on Twitter and what's the double people's mind, what's in the news? But the other thing is, look, I believe in markets. I'm a believer in markets. It's like, look at what customers want and what they're interested in, what they're asking about, and have them suggest markets. The one cover is like, that doesn't Why don't you just do everything, anything? Again, we're regulated. Everything goes to a regulated pipeline. There's a number of things that we don't touch, like war, types of assassination, violence, things that could create a bad incentive. We never touch those. One, because it would be illegal. Two, Even if it wasn't, I think those would not necessarily... Even though there could be interest from the forecast, for example, if you have a war market, I think it could create a perverse incentive. It could create a bad incentive. We basically shy away and do not touch those. I think you have to have a You have to have a balance. I think we've gotten fairly good at that balance.
All right, Tarek. Well, we'll let you go research the McRib and SKD. And yeah, we appreciate you being on the show.
Thanks so much, guys. I appreciate you having me. Take care, man.
Thanks to Tarek for coming on the show.
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Au revoir.
This week, Alex and Ellis talk about the rise of storytelling in tech and why X is now openly pleading for its haters to come back. Then they sit down with Tarek Mansour, co-founder and CEO of Kalshi, to discuss insider trading, his rivalry with Polymarket, regulatory chaos, sports betting, and why prediction markets are having a real moment.
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