World Cup Betting Including GPs Biggest Loss of All Time | Ep 161

This episode SP and GP get into the first World Cup on Prediction Markets. The insanity of this world cup has surpassed our wildest expectations and we discuss what makes it unlike anything we have ever seen before. Big news and a lot of questions follow - enjoy!

0:00 First World Cup on Prediction Markets
36:00 News

1:04:30 Q&A

Welcome to The Risk Takers Podcast, hosted by professional sports bettor John Shilling (GoldenPants13) and SportsProjections. This podcast is the best betting education available - PERIOD. And it's free - please share and subscribe if you like it.

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Transcript

SPEAKER_00 0:00

But like to start the World Cup, we did have a lot of ties and some things that kind of went the sharps way, you would say. So, you know, I think looking back, like, I probably just feel like, yeah, I mean, it's it's really a bad, a bad loss, but I'm happy to take my biggest loss on what's probably the biggest month-long event of uh the sports calendar, and it happens once every four years. I feel like this is when you should take your biggest loss at some point during the World Cup. Where I guess if during this episode you hear a long technical difficulty break, it means Harry Kane has scored two goals, but you would have known that at this point. Um yeah, I mean the main topic of this is going to be you know, World Cup, first World Cup on prediction markets, first World Cup that I've really spent a lot of time doing doing stuff for. I don't know, were you involved in uh World Cup betting last time around?

SPEAKER_02 1:21

No, honestly, soccer is probably the one sport I've never like had any type of project or anything I've ever done. Like nothing soccer-related, I think, ever, if I remember. I at least I don't remember it if I ever did anything soccer-wise.

SPEAKER_00 1:35

Do you feel like it's partially because we're from the US and then partially because we assume soccer is just dominated by like Star Lizard and these big like European groups or even just sophisticated European betters who've been doing this forever?

SPEAKER_02 1:56

I honestly I think for me, like if I and you know, some of this could just be like bad takes and like not knowing a lot about soccer. Like, I just feel like the soccer markets um are like somewhat uninteresting as compared to some of the other like US sports. Like there's just from from the at least on like the the the sports books that are big and popular here, like you know, FanDuel DraftKings and stuff, like just the the depth of market, um, like the types of markets and the amount of markets, like it's just way fewer. Like, so like I, you know, for me, I would never have interest on betting on like uh you know, wind draw a tie or whatever, uh, or wind draw lose. Like the just like the standard markets, I would be more interested into stuff that's like more niche, probably. And so like I've just never seen a ton of markets on on for soccer, so it's just never been I also just like don't know that much about soccer, so it never never drew me to it, but um it's very like Poisson-y, you know, it's like number, it's like counting corner, it's like even the kind of exotic ones are all just kind of count by one, right?

SPEAKER_00 3:06

Like shots, corners, blocks, saves, you know.

SPEAKER_02 3:14

Yeah, it's it it's that's what I'm saying. Like it seems like an easier it all just seemed like like when I when I would go through like a standard soccer menu, there was nothing originally that I'd be like, oh, here's clearly an area where I think there might be something. Like something I could yeah, like I could look at it and be like, this can't be that hard. And again, these this is just my take.

SPEAKER_00 3:35

SP take the episode, soccer betting's easy. All of you soccer betters, you know, you're simple.

SPEAKER_02 3:42

No, I'm saying the opposite, like it's really hard. I'm saying like when when there's not like clear mistakes you can make in pricing, um, like I want to be where there's like clear, like where the problem is really hard is where I want to be. And if I think of something like like corners or something, like yeah, I'm I'm sure you can get infinitely detailed to model that, but like that is far different, I think, than like some of the complications around some sports like like where I think certain sports are just more complicated to model, like football problems or whatever, like American football.

SPEAKER_00 4:14

So well, let's let's talk let's talk about kind of what what we've seen for the World Cup. I think, you know, I mean, I don't know about you, but we've been doing a lot of props in RFQs, so a lot of combos and props. We haven't really been posting on the main market, like the win-loss tie. Um, but I've seen just an absurd amount of volume on every single thing World Cup wise, like so where we don't even need to be in the main markets, because you know, our bankroll is not big enough where we can't turn it over in the stuff that has theoretically higher edge, but when you know every great player scores twice, like TBD, but you know, the the the edge you you can turn your bankroll over it, and we can also talk about like the pace of the game, I love the schedule. But like I'm the first thing is I'm blown, I'm blown away by the volume. I I'm shocked, honestly. Like it's way more than I thought it would be, and I thought it would be pretty solid.

SPEAKER_02 5:24

Yeah, I had jotted down just four or five random bullet points you know for this topic, and one of them was like the the volume point. Um, and I actually we could probably knock out some of even the listener questions like with in in some of this because Jack had asked the question how does your X ROI threshold change for markets that will take longer to settle? Golf outrights, round first round matchups, for example. Do you have some sort of multiplier for X ROI knowing that your money is tied up for longer? And I thought that was we could bring that up now just now because I think it's related to what you brought up, is that it honestly sounds insane, and maybe you know, I'm hashtag poor or something, but like to me, there's there's no reason to play stuff like play in markets that are like certainly not gonna take like a month to settle. Like I think that's like I think that's a big mistake. Honestly, for me, like if it's a week, it's like probably a no at this point.

SPEAKER_00 6:21

Um, unless it's like oh I'm a no, yeah.

SPEAKER_02 6:24

You're a no okay. I think you're probably even more extreme.

SPEAKER_00 6:27

I'm I'm not even as extreme as can be.

SPEAKER_02 6:29

Okay. I've had some DMs about this, and it it honestly sounds um, I think like if I rewind like three years ago, and I think we talked about this a little bit, it sounds insane to say like you're just gonna play your whole bankroll every every day, basically. Um but I think like the world, like the World Cup has sort of given us that that opportunity that you can do that, and there's enough, you know, one of the things I I I do want to talk about with you, especially if you're doing more of the RFQ stuff, is like the diversification, and we can drill down on like how to make sure you're not getting um, you know, like totally wiped out on certain outcomes. But like I think for me, like to answer Jack's question, like it's gotta be like either like a very high X ROI for anything like a week out. And if it's more than a week, it's probably just like not in the cards for me right now, due to like how much volume you can get on the World Cup.

SPEAKER_00 7:25

Yeah, like in the World Cup environment, this question, yeah. I wouldn't, I don't I'm trying to even, I mean, there's the time I was saying like I actually had to um I actually had to buy Tiger to play in the Masters when he was in a drug rehab facility in Sweden. Just like I had to pay a set some money back. Yeah, to prime my account, exactly. And it's like that that was even during a less crazy time than the World Cup. So what what's interesting to me about the World Cup and why I love it so much? I'm very much a World Cup truther. I understand FIFA is like really scummy and whatnot, but the World Cup is just so good, and it's because the games they're like spaced out perfectly for gambling and capital return. So you have like your 12, and then you have your three. I think the schedule, well, I know there's some days that have more, but generally the schedule on the East Coast of the US has been 12, 3, 6, and then either 9 or 10 has been more. And then sometimes they throw like a crazy late one in there, like 12. Um 9, 12, yeah, I think has been kind of the the cadence. And the games take a little bit less than that. So basically, like a lot of the time you're getting stuff settled, either like before the next game starts or like right after it starts, and you're starting to get capital back. And for people who are betting, that's good because you know, you know, if you're like taking or you're a wreck, you're basically going out there betting, and then anything that hits, uh, you get to now bet again on the next game. If you're a maker, that's also good because for the same reason, but the other side. So like I think the schedule has really um opened up an opportunity to turn your bankroll over. And depending on your bankroll size, I think you could probably safely turn it over, but I don't sue me here, but multiple times in a day. Like, I actually think that's possible.

SPEAKER_02 9:35

I don't disagree. I mean, like, like it sounds you know, I it sounds insane. Like I get, I get again, going back like pre-prediction markets, um, because I used to like there used to be like a subset of people who would, you know, if someone played a future, they would say, like, you're telling on yourself or whatever. And I always thought that was sort of lame, you know, because like for most people, I thought, you know, maybe this is something I changed my mind on, like it was hard to get your like whole bankroll in play. Um, because for most of at least my betting, you know, career, it has been. Um, and now, yeah, I mean, I think the volume is insane. And so maybe, maybe that can go to the like the the risk management portion of it. Because obviously, like it's very it would be very easy to write like infinite on just one side and get your whole bankroll in play, but that's like probably not smart to just like be on Ghana or whatever when they're playing England. And oh, it's very easy to get your bankroll in play. Yeah, well, certain, certainly it is. But I even even beyond that, like, you know, there's a lot of stuff that's that's like correlated. Um, you know, so like you might not just you might think, and this is always a problem that comes up with like the Super Bowl, whatever, you might think you're like getting a bunch of different sides and and um different plays, but really it's like all predicated on like one team not scoring that many goals, usually, is is what it really boils down to. So, like how how are you thinking about that for for this World Cup? Or uh do you have any additional things to add based on our like risk management episode or or things you wanted to talk about there?

SPEAKER_00 11:12

Yeah, I mean, like like yesterday was our worst day like in the history of the company. If you don't yes, we're recording this on Tuesday. So yesterday for for us is Monday, which was when it was like Messi scored two goals. Um Holland Mbappe and Holland also scored two goals, and all their teams won. Or would one of them have a hat? Messi had a hat trick, maybe I I don't even know.

SPEAKER_02 11:41

That was last time. Oh, that was the last time they played two games and both times, they've all scored two goals. It's like unbelievable.

SPEAKER_00 11:48

Yeah, yeah. Yeah, it's their net public enemy number one. But yeah, so basically all the big the big favorites and the best players, you know, they scored their two plus goals and the all all of like every version of like kind of a parlay won. So that was our worst day, and we're still like comfortably up on the event. So I think like a lot of it has been just letting it rip a bit. Um and if I ever feel like there's a real spot, which like the one time I did was at the beginning of the tournament, was the US um team. Like we had a ton of obviously US no in like any combo or or or whatever. So I had to kind of sit on the the bid to get some like US yes and some I think it was Paraguay, was their first opponent, maybe Paraguay no. Some stuff like that, like for a decent a sizable amount. Like that was one time I was kind of hedged because it was kind of obvious, like that's a uh that's kind of the macro thing, is like if the US does well, we're gonna be kind of struggling. So it's kind of a good one-way, like one-shot way to to hedge. But like with stuff like Mbappe two two plus goals, like you could try and get some France. Um, I think that's a good way to do it, like get some France because it's gonna be hard for Mbappe to score two goals and France loses. Like, I don't know what percent of the time that happens. I don't know ball, but like it feels like it's like less than 10%, less than five percent of the time. Mbappe scores two goals and France loses. Like, I guess it depends who the opponent is, but like I don't know, that feels about right. So, like that seems like a decent hedge. I think just like doing what you can um to protect yourself on the using the money line, I think is basically the only thing you can do. And then you can also try the second thing I would say is like really try and like, yes, your stuff's gonna be pretty directional, but you know, first half stuff, you know, like there's there's a lot of different um markets that are getting volume, so that's a good way to like you know, don't forget to also kind of spread it out, even if it's like tangential, it it's still different. So like for for us, I think it's just like as differ as many different things as we can, and then like if it's an emergency hedge, you can usually find it on the the money line. Um and you can kind of passively take the other team now. But you know, I think one thing we'll also talk about is kind of how like the prices have moved, but that generally like that's the that's kind of how we've been doing it. I'd say mostly winging it and then a few little things here or there just to make sure we're not um in serious trouble.

SPEAKER_02 14:58

Okay, yeah, I was curious, like it sounds like it's a small subset of games where you've had to like sort of manually get in there and and correct it. Maybe the US and is that it really is.

SPEAKER_00 15:10

Just the US, yeah.

SPEAKER_02 15:11

Just the US so far.

SPEAKER_00 15:12

Yeah.

SPEAKER_02 15:12

It's pretty impressive that. Um, I guess the other question I had okay.

SPEAKER_00 15:19

Because we won't have as many like the the slips won't be as differentiated because like right now. Yeah, parlay slips will have stuff from each game and everything. But if it's a knockout stage or whatever, and it's only one or two games on the day, like that could probably I think we'll end up being like on uh on a couple money lines to be safe.

SPEAKER_02 15:42

Well, I'd say the best days, I don't know if you've looked ahead. The best best days, I think, at least in respect to diversification, will be the coming days. There you we'll have six games a day coming up here as the group's close out. Um so that that'll be good. Um you know, they'll all the some of them will be at the same time or overlapping. So you want to have that one benefit of like money rolling over you, like you said. But um, yeah, I guess the other thing I wanted to ask, and then maybe we can go to like some of the how the prices have moved, because that was really the last thing I wanted to talk about that I thought was interesting about the World Cup. But um I guess what the the other thing I wanted to ask was in the podcast we did in risk management, we had sort of talked about, like at least the way I framed it, is like you have some sort of like worst case scenario and you try and build your limits around that, but it's a hard problem because like everything's in uh a web that's woven together and it's not clear. So it sounds like yesterday was I'm guessing a really bad day.

SPEAKER_00 16:40

Yeah, I figured it's definitely like it felt about I think I know our worst case.

SPEAKER_02 16:45

Yeah, that's what I was gonna ask. Like, was it aligned with your was it aligned with like what you sort of thought your worst case, or was it much worse, or was it much better? And you you're like actually we can turn up the limits, or like what what lessons did you pull from like that really rough outcome day, I would say?

SPEAKER_00 17:03

Like I honestly, I'm like in a pre it it was probably it was probably worse than I thought we were gonna lose on a on a single day. Um, but we've had days where we've made more. But that's kind of it's like golf. So sometimes you just hit like the perfect winner, and like, you know, it's a little different than I feel like what this was, but I guess this was like the perfect storm of of just terrible outcomes happening. Um, but I think what I take away is that we're sizing well, you know, we're turning our bankroll over, and you know, it was a really bad day. Uh you know, obviously. Um, yeah, it was our it was our worst day by a good bit. Uh, but we still are up on the tournament. You know, one of our best months ever, including this day. So it's like, I just feel like we're that's fine. Like, I I just, you know, I I feel like be if if it wiped away like everything we'd done in in the month or, you know, in the in the World Cup, then I would feel like we're probably sizing wrong because at the beginning, like I I know like obviously the Twitter jokes now, and I'm doing it a lot of them, is like how ridiculous the last couple outcomes have been. But like to start the World Cup, we did have a lot of ties and some things that kind of went the sharps way, you would say. So, you know, I think looking back, like I probably just feel like, yeah, I mean, it's it's really a bad, a bad loss, but I'm happy to take my biggest loss on what's probably the biggest month-long event of uh the sports calendar and it happens once every four years. I feel like this is when you should take your biggest loss at some point during the World Cup, I guess.

SPEAKER_02 19:01

Yeah, I mean, I even more broadly, I would say like if your biggest loss was like three years ago, you're probably like not betting enough today. Um, like your biggest loss should always be like sort of relative, assuming you've grown over that time, right? Uh, so I mean, like, that's just like a broader point. I do feel bad. There's there's gotta be like a subset of people who were on vacation or just you know, behind and like weren't in the World Cup streets like the first week and then just got in the second week. And those people that's bad. They're gonna be mad because it's definitely been like up and down.

SPEAKER_00 19:36

Um the start was really good, and you that that's true. Like, if that's you, I do feel uh there's nothing you can do about that, and like that sucks.

SPEAKER_02 19:47

Yeah, because I'd say, you know, like the the Spain, the Spain Cape Verde. Oh, that was like that was that iconic was beautiful. Yeah, that was zero, zero the opposite of what happened yesterday, right?

SPEAKER_00 19:58

So literally the exact opposite, right?

SPEAKER_02 20:03

Yeah, no, and I think I think uh we can get to the prices, but I think the other point you made, I think is a good one to look at like how much you make on those really good outcomes relative to how much you lose on the really bad outcomes. Because I, you know, for me, I was in a similar boat, like the up on you know that though those types of outcomes like the Spain zero zero and and some other games that I think Portugal maybe that was not a good one.

SPEAKER_00 20:26

Yeah, they had a zero zero thing.

SPEAKER_02 20:27

I can't remember.

SPEAKER_00 20:28

But it's like didn't England draw a game? I don't even know.

SPEAKER_02 20:31

There's there's a lot of like random yeah, the low scoring ones that have like either zero zero or with both teams to not score and all that stuff. Right, like those, those have been good. Oh, the both teams to score, popular, very popular. I was shocked. That's like a niche thing we could talk about here. I think with what the both teams to score has taught me, it's it's like solidified my belief that people just want to bet at a certain odds range and they don't actually like care what's in their slip because like on Calchi early on, there's not that many options to make a same-game parlay or whatever on Calci. Like there's like a couple types of bets, like the spread, who's gonna win, the total. There's both teams to score, and now you can do goal scorer, I think, as well. Um, but like you know, both teams to score, I think, as a standalone, like really wouldn't be that that maybe it is, maybe it's like very popular. No, I don't it sounds like it wouldn't be, right? It sounds like it wouldn't be, but I think because like it's sort of like put in the it's it's extremely popular, and uh yeah, that before like the two goals stuff was happening to both teams to score was like the joke where like you know, teams were down to nine men and scoring in the 96th minute somehow.

SPEAKER_00 21:39

There was some oh man, there was a savage one of those. That it was Bosnia.

SPEAKER_02 21:44

Bosnia Bosnia was down to 10 men, and I think they scored in like the 96 minutes. So that's right, dude. And it was like after a long streak of this ridiculous, like both teams to score, and they were all scoring.

SPEAKER_00 21:55

Yeah, like didn't tie the game, it didn't do anything good.

SPEAKER_02 21:58

It just no, it was like four. to one you know like some sub comes on and rips one from outside the box and yeah so so you know but I think I guess to not get into the weeds of it like I think the point the broader point of those you can look at like what's happening on the good the the quote unquote good games for you and the bad games and if it's like out of skew then potentially your sizing is off potentially your diversification is off um and and you might want to look at like why that is you're like increasing variants where you don't need to be I would say so yeah I think about the oh go ahead no I I I I agree with that so what what oh the prices right you want to there's a couple things I wanted to talk about here I mean we got one question and it's been a topic on Twitter um so maybe we could start here this one was from Troy uh friend of the show in light of seeing a massive one-sided World Cup action and um Dave Mason at Bet Online saying they will incur their biggest loss by far if the USA wins at what point does a book start to hedge and how are they doing that? Offering Eevee on the other side taking elsewhere so we could talk about like what a book would do maybe secondarily but like maybe first let's just talk about like the price gap between Calci and um and like sports books. I know Kaalish was going on about this so maybe this is a bit of a news too that we can hit but like just maybe start with like that that gap and your thoughts on it.

SPEAKER_00 23:30

Yeah so well I think the Kaelish thing he was he basically was like you can get US to win the World Cup like win the the whole thing right at 35 to 1 on DraftKings is that right or plus three to I looked right before it it was 33 to 1 but yeah I think it probably was 35 when he calish false bad info um and then uh on Cal She you were getting like what were you getting like uh 17 to 121 21 something like that somewhere in that yeah okay so somewhere in that range um and then calish is like well you know like again I on the draft so I the DraftKings thing like I am surprised by I don't I don't think it's necessarily like um like it feels like they're probably offering that at minus EV like I I don't know I don't know ball but like that almost feels like a promo to me because there is no way that the US to win is a good result for DraftKings there is absolutely zero chance so like if I'm DraftKings oh breaking news breaking news we have a zero zero tie between England and Ghana to save the entire market making population of Call sheet this is okay the fine the whole industry will not collapse. We can make sure we can actually get this published I thought our subscription was going to get because the the card was going to bounce yeah no one would care um okay but but yeah like to me the the I'm shocked that DraftKings has held that number for so long and there there feels like that online I mean there is a certain point where you want to start hedging but it's really it's really hard to hedge like it's hard to hedge the US you know where are you going to go buy the US you can't buy it at DraftKings for that much you obviously can't buy it on Calchi for that much um at a good price so you know I think the World Cup has shown that there's only so much people can take and that gets reflected in the pricing. Like I I made a joke on Twitter I was like the after Ronaldo scored his second goal I was like well the Harry Kane Harry Kane two plus goals must be steaming right now. Like obviously because you know there's no impact of Ronaldo scoring two goals on Harry Kane's fair but like you know that was the fourth star in a row to score two plus and everybody's just taking such a beating and then Isaac posted a screenshot and it literally had steamed like five cents. And it's just like people can't can only take so much like like in the amount it just goes to show how much rec money is here and like how directional it is because obviously like Harry Kane no two plus at its new price like people will say this is a pass post but like you know was a good bet. Like at its new you know if it seems six cents like um but it's just like people can only handle so much and the fewer market makers you have wanting to get a piece of it um the less the the less competitive the the latter is going to be and it's gonna be you know I think it's gonna it'll probably be a situation where you're not trying to buy it for like a bad price but you're just trying to you'll you'll just see what I think is like neither side will be plus EV on uh on some of these like props and stuff. Like obviously on a on something like a main like the US in in Paraguay or whatever like that that was one cent watt. Now like I don't know if it was like at fair if it was like a little off fair or whatever but it's not going to be too too crazy. With a taker fee though you might not be making money on either side but like on some of the props like there's no way that either side is is plusy B to take because no one's gonna want to like sit there and bid the stupid yes number for like a tight market but the no is going to get backed off so much that you know the market's just going to be super wide yeah I mean I I think those that's a lot of the dynamics I've I've sort of seen is like I mean it's like you know the question was originally about the US to win but so I I had looked like to get the to get the because we got a separate question from Nathan it was like the question was not super clued up on PMs how can there be such a discrepancy between US outright prices on PMs and rec books without someone having closed the gap and I looked and it would take like 750K or something to close the gap like to get the like I did some quick math right before this.

SPEAKER_02 28:36

So there's just like not it it sort of ties into what we said like is that the best use of money for these like anybody who's doing this seriously to try and like close that gap and it's not even easy it wouldn't even be like to your point like where you actually close the gap it's not like you can just like roll up to DraftKings and close it right and like have a a neutral position. So I think it's just whenever you have an you know on Cal sheet like an order book that and we talked about like there's there's one way flow like what happens is someone gets into the top of the order book and they're like oh this is a good price and I can get all the flow and they jump up to the front and then they're like holy shit there's a lot of bets. I don't need to be up front here. I'm gonna stake a step back and that keeps happening until you get to like the point where people are like okay now I can take it here's the optimal place. So it's really just like a supply and demand thing. And so like that that's what's happening on Cal she where these certain markets like whether it's the the goal scores or the USA to win it's like people are trying to get as far back as as possible and people are betting. And one of the things it should reaffirm to everybody is like price doesn't matter to most of these people to most people who are betting. Like it's not an important factor. And so um it's been really interesting to see um the difference between the exchanges and the sports books. And it's I I tend to agree with you. It's sort of just like a promotional thing. Like if you're a DraftKings fan or whatever like you probably don't want to be the one who's offering 20 to one when your competitor is offering 35 to one even if like you know you could charge 10 to one and people would bet it um you know like you just like your current customer yeah like a market maker like you and I I don't have to answer customer service or go on Twitter and get screenshots about like these people are trying to scan me. Like I don't have to do that. Whereas like trackings and phantom they have to deal with that like bad press right so it's it's like just a different game and I think that's that's potentially why you see some of the the gaps.

SPEAKER_00 30:40

Yeah honestly that's a great point about why our our job isn't that bad is we don't have to deal with the customer service aspect of it.

SPEAKER_02 30:49

People are like cal she scammed me by offering this price it's like yeah they totally did fuck them yeah right like we get immunity from from that type of stuff um I guess did like Troy's to Troy's question I mean like if I was if I was like FanDuel or DraftKings or any of these books that that have a price that's like far off of the exchanges um I think what I would do is like I think it's I I think it's silly to try and like hedge out to a different entity. I've always sort of thought that I know like the the Calchis and polymarkets and whatnot like to say like that's a use case for them is for like sports books to hedge with them. I think that would be like mostly performative in nature I think if you're one of those companies you're far better off just um trying to give uh the promotional like or even out your book and but keep it in your ecosystem. So if that means you know US gets through and they're in the you know that there's eight teams left like and sort of like boosting the odds of the other team like or being like off market of the other team um to attract like it reminds me like I don't know the exact details because I I remember I was like traveling or on vacation this week or something but ESPN bet did something with the football yeah or something where it was like like basically they had taken some huge bet or something I don't know if it was like mattress Mac involved or or what can't remember the details but they had like way out of line exposures and they just basically like gave an ARB to the market um to even it out. And why that to me why that's so much yeah it's so much to me that's that makes so much more sense than just like giving the EV to a competitor like Kashi or Poly Market or whatever is because then like your customers have the money and what are your customers going to do hopefully keep it in your ecosystem right versus just giving it to a different entity.

SPEAKER_00 32:45

The thing about the ESPN one was like they made the Mac the size so big like you could get down so much on it on like both of the promos so like I do think yeah I mean I think it's difficult with the like sp I don't know I'm ner I'd be ner like I legit think like the US is a scary out the US winning the World Cup is like a legitimately scary outcome for like it's gonna be hard. You know like the US is in the final eight teams and you're like yo we're we're boosting the odds on France every friend I have is gonna be like fuck France fucking you know they should have helped us more in the Revolutionary war. I'm not gonna bet you know or whatever even though they did but you know I don't know it it I would be I'd be slightly nervous I I think like if you're a sports book you're you're I don't care how patriotic you are you're rooting for the US to lose yeah no I I mean it's fair and I mean some of the challenge like if you're um a a company like if you're a sports book who doesn't who's who's gotten rid of a lot of customers who would help you even action if you boost something like it's harder to do that right if you've shown price sensitive customers the door it's harder to even it out later on uh right right to be like you can do that France at whatever and it's yeah like like I said like if you want to have you only truly have recreational customers it doesn't matter what price you're offering for France at right like right they're patriots unlike us unlike the listeners of this podcast um but yeah it's a I don't know if I would love to I just kind of want to see what happens if like if the US kind of gets into if the US makes the semis I have no clue I see I know they're kind of trash don't add me this is just a fun exercise but like I'd like to see kind of what what's going on I'd like to see what Dave Mason says if if the US is in the semis it would just be more interesting to have this dynamic play out through the rest of the World Cup meaning to see that like right now you know there's the price gap it would be interesting to see how that gap diverges or closes or what happens uh as it you know moves throughout the World Cup. So I I agree like um I'm all I'm all for the uh the US government do you think like they they you you can probably hedge easier later since like there's only a few order books that'll be open there'll be good teams you can kind of like be in three the three non-US order books and kind of be buying uh the nose on those teams or you know what I'm saying like now it's kind of hard to hedge because we're not even at a group stages we don't you know the the favorites France and they're at like 19 cents. Once you start to kind of get down to the end I do think you'll see probably some opportunity to uh you know buy some of the other teams at a uh good price but you know whether it's the quarters or the semis but if I'm probably Dave Mason or somebody who has a big future liability I'm probably just kind of kicking the can down the road slightly I would agree.

SPEAKER_02 36:09

I would I would agree with that.

SPEAKER_00 36:10

I think you know from my perspective you have a lot of time but I don't know like the financials of it either so true yeah if the US wins the World Cup there'll probably be like one to two like like true horror stories. Like we could we could see something crazy. So um anyway and you know what we'll cover it in what the next section is which is the news did you have any more world cup stuff? No I think that was good. I think that was good okay um profit and Novig get CFTC you know two companies that I feel like have kind of you know paved similar paths you know get the CFTC approval I think profit launched on the CFTC.

SPEAKER_02 36:57

I think that's correct.

SPEAKER_00 36:58

Yeah yeah um have you tried it?

SPEAKER_02 37:01

I haven't tried it like I have not tried it yet no okay uh I mean I used it when there were like sweepstakes I thought it was a good product when there were sweeps and my understanding um is it's it's largely the same but they're trying to like work on it improve it make it make it maybe fit a little bit better. One of the things um I was actually listening one of the the guys I can't remember I think it's Jake and Dean if I remember correctly are the people who run the profit guys. One of them was on uh an interview show with the I don't even that I don't the Tom guy I think his name is from uh unabated he has a show and he he didn't oh TV at work tom viola yes yes I was listening to that book cut in the lawn today and I it was actually really interesting um casual lawn cutting slipping that in there he's still man of people I had to work that in um no I think I think there was a bunch of things that were interesting in that in that episode honestly um one of the things I thought was was most interesting was um they asked uh Tom asked like what what are you all gonna do like like maybe that's different than some of the big players like Calchi and Polymarket and one of the things that that he said was um like we will allow pushes um and because like the like invoids and so like because they're sort of I don't know if you've seen how they're branding themselves they're branding themselves uh profit this is as like the first sports native prediction market or something along those lines yeah yeah and you know it goes with what we had talked about maybe I don't remember if it was probably two weeks ago when we were doing the news of like these companies are eventually going to figure out how to just like make it a better experience and voiding or pushing is a better experience. And then um you know it'll allow them to do stuff and this was example they gave on the podcast of like offering lines that are like minus three and stuff like that, which you know like an NFL betting is popular where you know Cal she can't offer minus three currently um so yeah it'll be interesting. I thought the whole podcast was was interesting I'd I'd recommend it. So um the other thing I guess I'll say on this while and now kick it to you to get your thoughts is like this was much faster than I thought. I was definitely wrong. I think I've been like alluding to these companies are going to get like boxed out by by Calchi and and polymarket and like you know it was like they got in the door and then they're gonna shut the door behind them. I was clearly wrong on that. And so this is like really encouraging and I think for me the broader thing is just it there the CFDC and the administration is just like open to just like totally opening this up and like much more open than I thought it would be. It's like at least at this stage not just like pure regulatory capture garbage at least for now which is encouraging and I think great for consumers if if like as many of these companies can get in as possible.

SPEAKER_00 39:53

Yeah it's a good I didn't even really think about that but like because everything's moving so fast but if you rewind to a couple months ago like this would seem very fast compared to when we thought like we'd be like well you know maybe they would be up by NFL or get approval yeah I thought maybe I thought it was underdog for them to be up for NFL. Right. So and now I see like you know there I I saw some I don't even know like rebed or you know now everybody's applying for one so I wonder like at what point people like the CFTC is just gonna be like okay like like enough's enough but um certainly good to see both of those in there. I think they're gonna I think they're gonna make a real put that I think they're challengers like prediction markets still to this day like are mostly sports and the way that they're the current ones are set up are not necessarily like one they hate that they offer sports seemingly like they never want to talk about it um or whatever but like two they don't set up like you said their rules and their UI to necessarily like be pro sports. So these are two that are going to come in and just be like unashamedly sports.

SPEAKER_02 41:16

Yeah yeah it'd be interesting I mean the other the other thing I thought was interesting in the the interview I listened to is um at least the the Prophet X guys said like their their strategy is not to just like come in and outmarket like try like to try and outmarket these companies they're gonna try and like sort of connect through like basically do what Robinhood like work like what Cauchy was to Robinhood that's like going to be their strategy as a starting point which I thought was was um interesting honest and like um like good sort of like aware of where you're at like I think like I think it's a mistake if you're a company of their size and scope to think you're just like gonna come and outspend like market like right Calchi poly market soon to be DraftKings maybe soon to be fan of like all these companies like you're not gonna do that probably what you what you can do is have a better product and integrate and and find like you know good partners and and try and grow like organically that way.

SPEAKER_00 42:13

So I thought that was interesting too um so yeah good cheers to them good luck to them I I'm excited like that we'll definitely be on there when they're you know on see it firmly on the CFTC Rails and we have a little bit of time to integrate like can't wait. Um splash sports splash sports what was the guarantee they announced there a deal with poly to do a 23 million guarantee 22 million guarantee survivor I think it was like I thought it was 21 I think it was like one one million more than whatever I see circus okay that's a classic poly playbook right there actually that's you can't wait for Cal Shade to come in and do the 22 million yeah and you can only sign up at a grocery store um yeah we got a we got a question later about you know like these these peer to peer like pool contests I thought this is really cool I mean like I saw on Twitter it a little bit devolved into like you know the tribes going at each other of who we're who are supporting.

SPEAKER_02 43:21

I mean I I I don't know anybody involved with either of those companies I think it's great to have as many options as possible. I think it's great that um I've used splash sports I'm in their their world cup survivor I think it's actually quite cool that product the NFL survivor is like generally less interesting um to me uh than some of the other types of sports where it's in my opinion like more complicated and there's more strategy. But I think it's it's really cool. I think these these contests are like super fun for all types of people like people trying to take it seriously and people who aren't trying to take it seriously. The biggest challenge is just like there's a lot of money in a season long contest. So um it'll be interesting to see how they continue to to scale and grow. But I think this is uh this is cool and good on them and I'm I I probably will will be in this I would guess.

SPEAKER_00 44:14

Yeah. Yeah. Yeah I I think um basically you said everything I I think there. Like I I do I I'm interested to see where you rank Pete like the player to player like contests um when we get to that question. But you know I do think that there's a lot of obviously like juice around these things but it's hard to it's hard to really scale them because you run a few a season people do like the play. I think I think once like they become more I I think there's a point where like there becomes like a real acceptance of these and like an easy way to do them and that could be through like splash and poly. And if anything like I think this this is is good for them because they don't have to you know have people go to you know Vegas to sign up use a proxy and all of this stuff. So like if they wanted to do you know playoff survivor um you know the you know a two-week long survivor or whatever like if you can squeeze juice out of this like beyond one contest for each season this is a good way to attract people to the platform and then see if you can do that um as the season goes on or as other sports come up.

SPEAKER_02 45:38

Yeah this is turning into a little bit of a like an ad for them but honestly I think their product's good and I I have no problem talking about it. But like they they do have others like I think last year I played in it was something it was an NBA contest type thing where you had to pick like uh players to have 20 points. It was like a survivor contest where it was like you know individual players to score 20 points or something. And I know they have stuff with like MLB hits like you got to pick a guy who gets a hit every day. And so like they're trying it like I don't think those are like super popular based on like my knowledge of the the size of them and stuff. But like I just I think it's like they're fun. Like they're really easy like like anybody can know how to play them. Like if I compare that to for example like DFS these days like where there's like a salary cap and whatever it's just like night and day the ease and the like just click one button and you know that you're done. So um yeah I I think they're fun and I hope they continue to grow because they're you know I I won't I won't reveal my rankings but I I think there's good opportunities there too.

SPEAKER_00 46:43

Fair enough. Okay the juiciest news of the week the drama in the uh Bravo section Polymarket Wall Street Journal basically like did a above the fold main page expose on polymarket faking betting slips. So I'll I'll what I know about this is basically like polymarket and the influencers advertising it would you know use a different uh website to fake wins and trades and slips um whether it's like filming the trade quote unquote trade happening or whatnot and the Wall Street Journal uncovered it when they were like doing a like a dive into some of the influencers and they saw like the website that they were using like wasn't exactly the same as like the polymarket website and then the story turned into like this story. Um is that how you you read it so I'll be honest these next three I just you know life I didn't get a chance to actually read the the the the blurbs I just saw like the headlines for this you're gonna have to carry the water that that that is what I uh that is what I intuited from this and read the the the as as people say I've seen clips these are like the clips that I I've read from it but that that seems to be the case um and yeah I mean I I just another another thing like I don't I don't get it like it's cra it's crazy to me that um it just feels like maybe maybe I'm just old but like I just can't imagine like NASDAQ doing this or the New York Stock Exchange or like you know it's just I I don't quite get it and I think like I I'm always hesitant to criticize the marketing of these companies because they've clearly like clawed their way into the zeitgeist and like are the two biggest companies in a category that never existed and that obviously takes a lot of good marketing but it's just like I don't know I just feel like eventually like you're gonna pay have to pay the bill for like what is just like clearly unattractive marketing practices from anybody who views it. And yeah I don't I obviously do not like this you should not be doing this I'm sure that sports books have also done this but I don't think like that means that this is okay. But yeah I don't know I mean I don't the company's not really said anything. Yeah I don't know I mean I'm not shocked but it's not good.

SPEAKER_02 49:40

Yeah I mean to me I guess this this broadly falls into like the broad topic of like these companies marketing themselves as like normal people winning. And like that's just yeah in my opinion like dishonest and harmful um from my perspective like so like and there's like a lot of regulations around you can say like sportsbooks or whatever do this but like there are a lot of rules about what sports books can say and can't say and and all this stuff at least today like um so like yeah I mean to me it's just like distasteful dishonest it it's it's honestly not that different than just like how in my opinion like all marketing is done these it feels like so like marketing like when maybe now now this is gonna be like old man yelling at cloud when I was growing up like it felt like marketing was like respectable and like just like now marketing just feels like all of it is like underhanded you don't actually know if it's like like nothing's actually disclosed what's what's like an ad and what's not it's like you have Wendy's like shit posting on Twitter like like what why can't we just like market like like be like hey come try our our big our new big Mac or something it's just like like it it it feels like all marketing is just like fake garbage like run by 14 year olds and that's what this this feels like of just like influencer marketing is like who's doing all of this and it's so it's not different than like other industries honestly I don't feel like but it's right it feels like like like like a fitness influencer being like I just you know I poured this powder into my drink and then went to the gym for three days and now I look like this or something.

SPEAKER_00 51:31

You know it's just like this is it's all it is so annoying.

SPEAKER_02 51:35

It's so annoying like I I yeah no you're right I don't know I guess we're just old but like I just hate it I hate the new I hate the new marketing I agree with you it's just just say this is an ad this is new product we made we you know it's cool because of this here's a funny joke here's an actor you like that's marketing yeah right like and the thing is like I don't I don't actually think this I could be wrong I I don't think this like sells like I don't think they'd have any difference if they just if they didn't have if they didn't resort to these tactics like if I don't think anybody is like actually sold on like like people would want to gamble regardless whether they think like this normie who looks up at the sky can win money or not. Like it's fun. So like you don't need to resort to these things in my opinion. But that could be wrong. I mean like I I'm guessing there's a lot of like young people who are um you know it's it's hard for me to put myself back in the shoes of like a 18 year old kid. Um so it it's hard to say I'm I'm guessing they've done their research and they know like this type of garbage of like making it look easy and showing big wins and whatnot works for people.

SPEAKER_00 52:49

So um yeah maybe I don't know I'm kind of inclined to to agree with you that it's probably not like I I it's actually I feel like it's not long term plus A V and part of that is because the immediate return I think is is probably not that high like you just said. But speaking of things moving in a really good direction Facebook announces they're doing a prediction market. I forget what it's called um first of all this feels like the most Facebook thing ever like I don't think Facebook like does anything anymore they're meta now right so but it's just like they don't do anything anymore they're like oh okay like we're gonna be the fifth person in this like is this good and then they fail and you know I just don't I don't get what they're doing as a company.

SPEAKER_02 53:38

You're gonna have to fill me in what's what's the thesis on this this market?

SPEAKER_00 53:41

Well I guess like at first it's not real money. It's not gonna be real money. So don't worry it'll never be there'll never be any gambling involved in this um yeah I don't I don't know the thesis is like I think Zuck went on Twitter and was like what should we do next I I actually think he made a post being like what should we do next or something um and uh yeah as far as I know I mean there's very little details it's an it's just like kind of an announcement they had a name for it which I now forget Arena I think it's called Arena um and yeah I think it's probably gonna start out as some free to play prediction market integrated with like their social apps which you know has obviously a wide distribution uh it'll be interesting like on the free to play version since it's really just people like it's just people who have like especially like on Facebook like people who have just lost their mind like how far the numbers skew in like insane directions but uh uh yeah I don't know it I think they're gonna start as a social thing and either use it to sell ads and engagement or maybe they'll they'll go the real money route but I don't know I I kind of doubt that they'll be successful at uh like going the exact polycology direction but I could see them like having an interesting uh you know what I'm trying to think about like I forget that poker game but it was like the biggest poker game in the world zing was it Zynga or something but but like they could never really like make the transition to being like a true poker stars or full tail like they're free to play you can like maybe like buy chips or add-ons or whatever but like their their game had the definitely the most downloads of any poker game but they were like the free out which you know made money otherwise so maybe that's what Facebook's doing I don't know this just came today so I I have no clue.

SPEAKER_02 55:52

Alright let's hit the one that everybody wants I I I didn't I you added a note I added it you added it and you added a note to the end which I wasn't aware of so the way you added what you added was I was aware of the Novig increases the tech size you know that the people were clamoring for our takes on this but then you added the Discord melted down so I I have not been on Discord in in a bit I don't so I've been told this um by uh I was told this first by a friend of the show uh Maple.

SPEAKER_00 56:22

Yeah so I was actually told this first because uh Maple messaged me saying like the Novic Discord's going crazy because they they increase the tick size um and then I looked at like what their actual tick schedule was and I posted on Twitter because I was like this is pretty good like I think this is a pretty reasonable one um and it was basically it was decent on the five the the tail five cents so between one cent two cent three cent four cent up to five cent that range every tick was decent so 0.1 right um so that that part is 50 ticks and then 95 to you know 99.9 same thing and then in the middle it's half a cent on everything so like that's already a more kind of like a finer tick schedule than even call she I think I like what they did was like stop the descent five cents earlier like I do think like like at that range it works kind of well like that 95 to 90 range I don't think it it it's really quite as as useful. But then they created half cent ticks. Now of course and this is okay so this is something that my partner Luke is a hundred percent correct on and this he's seen this happen he told me a story about this I think with Canadian interest rates when he was trading them but and it it ties in perfectly with like Rex and knowing price and and all of this but he says like you can always you can always lower the tick size very easily but you cannot increase it. And if you think about Novig they have of the current like CFTC prediction market companies besides like PolyUS um at least in golf for quality US but you know let's I I think they have the smallest tick size but when they announce the smallest tick size everybody freaks out because they've raised it so this is like if I'm gonna give a uh a PSA to people who are doing exchanges start wide go smaller start wide go smaller um because what they put out is is good and it's also like some of the smallest tick size available uh but the the sentiment in the Discord was essentially like now I can't penny jump I was gonna say who is the who are the angry people like the penny jumpers yeah definitely yeah so the penny jumpers um and the thing is you know it's one of these things that that we talk about is like you have to think about your own longevity by like putting yourself aligning yourself with the best interests of the exchange or at least having something that like is a value add where like it can't get wiped out like that because someone was like I I got sent a message and they're like oh you're just like looking you're just uh you're just trying to like cater to the big dog like yeah the institutional market makers might want like bigger ticks but like you know we don't care we're only putting an order a couple orders or two a day you know like we don't care as much if we get penny jumped and it's like how unaware are you of like the problem that Novik's trying to solve you like they don't care. The the institutional market maker is making them way more money. So like for you to even think that yeah like you can talk your book and be annoyed but like for you to think that just because you know this hurts you that Novig has some like obligation to like cater to you because you know you've been using Novig like that's not the case like Novig has a lot of people who've put money into the company who need to see returns and like they're gonna they're gonna want the recs and the rec takers and they're gonna want the liquidity providers. And like that that's that's it. So like you know this was kind of an example of a couple things but like one I think like you should start a bit wider tick size just for everybody's sanity and then you can get a little finer. But two is the reminder of like make sure you're doing something that's a bit more make sure you're doing something that can't be taken away in one update.

SPEAKER_02 1:01:36

I think you covered it well I didn't don't really have much to add I'm I guess I you you've given me some reading material. I I love a good Discord meltdown so I'm gonna have to go and uh and get in there and see what happened.

SPEAKER_00 1:01:47

I didn't I didn't I never actually went because like I'm I'm scared of Discord because I have all these people that pretend to be me and then I just get a lot of DMs about how like is this you or like this guy's like trying to scam me so I'm just like I'm just afraid of Discord at this point. But like I got some good screenshots from maple that I can I'll forward it to you. And you'll probably go in there. Are you in the Novic Discord? I would have to double check uh yeah yeah it looks like I'm I'm a member so I'll have to go I'll I'll have to go check that out that's gonna be fun but yeah no I I it's I guess we can we can move to the questions but to me that that schedule makes total sense it's simple it's um it's like to me sufficiently narrow in the spots it needs to be um and I also agree like I think I've said like when you don't have liquidity you want to be wider and then you can get you can get smaller as you have liquidity like like calci could certainly go smaller now if they wanted to like don't do that calci but they could if they wanted to yeah um money when you're starting out and trying to get liquidity being wider has has obvious benefits like you described so the one other thing I don't not this will be quick but like it does it's clear to me that like the exchanges don't want to do something crazy complicated because like when Calchi and Novig have changed the tick size they've basically gone max two with like a cutoff they're like this is our middle tick size and then this is our tail tick size and it starts at this point. Instead of like yeah we should have this like tapered tier where at like 90 to 92 it's this and they're like you know there's some there's a significant amount of value seemingly placed on some simplicity um which I thought was interesting and like makes sense but you know for when I'm lobbying for tick sizes I'm gonna remember that.

SPEAKER_02 1:03:38

Yeah because you can't have like you want people to know what price they can put in. And if you had like like you know I don't know what profit's doing for example I think they have a more complicated one where there's more than two tiers I believe at least they did last year. I think when I was using it like and it was like a piece of feedback it's like you put in a price that you want to offer but it's like you can't offer that price. So you're sort of like guessing what price especially in American odds it gets actually quite confusing at least for me like of what price what exact like a 327 or 328 which one am I allowed to put in or or whatever you know so yeah yeah for sure for sure um cues yes let's hit the questions I could read the first one to you um we did knock a couple out too just in the early one so we we had a decent amount but I think we could probably get through all these first one from Sorin given the insane volume on in-game trading in Calci what percentage of that do you think is recreational flow what percentage do you think of uh think is recreational flow pre-game so I I wrote it like I don't know the exact I don't have like an exact percent but I wanted to answer this in a useful way so I was thinking like relative so what what I wrote was I think that in game has a higher recreational flow percentage.

SPEAKER_00 1:05:00

Um I think this kind of passes the smell test where it's like the rex are more likely to actually be watching the game you know they bet closer to tip um and all of that. So like if they're betting if the rex don't bet until like an hour or two before the game you know you can kind of extrapolate that to mean like they're also probably frequently betting while the game's going on during breaks and all and all of this. But the sharps who are betting during the game are really sharp. So like they be what you know most of these are like courtsiders or latency things. And these edges are just going to be bigger than edges that you get pre game. So like I don't know if the overall I I still think the fills are better in game um but you know you're definitely a little more wary like the group there's a small group of people Who can get a really big edge if you're not if you're not careful? But I would say, yeah, in-game is is a a higher percentage of of rec flow. I don't know. It's hard to say like what I think the exact breakdown is, but um it's I would say like yes, in-game is is is quite high.

SPEAKER_02 1:06:20

Yeah, I mean I I don't have exact percentages to give either. I my thought was like for both of these, it's like extremely high. Um like yeah, just with the fee structure on Calci, it's like very even if it's trading one cent wide, it's like pretty rare that the best price is on Calci, like as a taker. Um so not not to say that like you know, it it it has to be the best price for it to be you know sharper or like not rec flow, but um, in general, if the price isn't best, it's like probably somewhat indicative that the the people taking are not um not necessarily like trying to win. Um I think if you just think of like I like the way you framed it. If I would almost if you want to add like RFQ to it, I would sort of add that as like the highest ceiling in terms of like you can get the highest ROI, but a mistake is the most costly. Live is then next where you can get a higher ROI. Yeah. Mistakes are also costly, like in terms of latency and stuff like that. Um, and then pre-game, probably lowest ceiling in terms of what you can get ROI, but you're probably not gonna get punished that bad being in there. So that would be like the way I would frame it.

SPEAKER_00 1:07:33

Um ROI guy. He said, as you grow an automated trading operation, how do you make sure to stay on top of whether anything is broken? Uh when you're smaller, you can spot check and make sure specific markets are quoting the way you'd expect. But as you grow, it becomes more difficult and more automated checking is probably needed. This is especially relevant if you're a vibe coder and don't actually know what the lines of code, what lines of code do what. So curious your thoughts on how you make sure stuff doesn't blow up.

SPEAKER_02 1:08:09

I think so. For me, the the key thing is making sure the key things um like work properly and everything else is important but less important. So like what for me, like I want to be certain that when I say key things, I'm thinking like max limits, not being like out of line with the market. Um, because so like just a really simple thing. If you're if if you have stuff that you feel very confident, you're only ever going to be like top of book and not like just out in middle of nowhere. Um that can really lower downside. Um, so making sure you feel really good about that part of code or logic or whatever. The other thing is like making sure you're never taking uh orders and like making sure that's buttoned up and you feel good about that. So like I just view it as making sure the big rocks are taken care of and then you can fit in the sand around it. And if there's problems, uh for me, like there's something I don't want to say every single day, but certainly every week, where I'm like, this thing for this sport is not actually like coding or quoting exactly how I would want it to. Like in these cases, like if you look at the order book, you know, you can see like where your position in it, or I'm jumping here and I don't really want to be, or all this stuff. So like I'm constantly tweaking, tweaking and tinkering with that stuff. Um, but like it turns so like almost certainly like quote unquote broken, there's something like not working if I knew how everything was working, working exactly how I would want it to, just because for me it is all like AI coded. Um, but the the big things is what I focus on because as long as those things aren't broken, like I can afford mistakes in other places or not it not working exactly as I want in in all places.

SPEAKER_00 1:09:58

Yeah, I think my answer is kind of a version of that. So I read it slightly differently, but um what what I wrote was like you should have the right amount of status messages, like if something's you you could have something pushing uh messages in Telegram, like that's what that's what we have. But if it pushes too many messages, you stop paying attention to it. So like SP said, like what are the the big important things, and then like maybe have those be included. So basically, like if we restart one of our market making bots, or like one shuts down or one starts up, like that always prints to a channel, for example. Um, so then you know, okay, like did a bot go down, and like we might have orders still out there. Um yeah, that that that's a good example of of something like you can you can do that's big, like like is the thing actually connected to the poly API or the Calci API? Um But yeah, I think like like one thing I wanted to add here was you know, you know, even the biggest, you know, most quantitatively advanced trading firms have a lot of traders. Uh and there's no there's no substitute for having people also paying attention. Um and you just can't escape that. You know, it's it's just uh you know, this is a business where the kind of risk profile is asymmetric and like you don't want to blow up. And you know, part of it, most of it's like never pushing anything until you feel really, really confident and you test, like do the testing as much as you can. But then you have to make sure you're watching it for like however long you want to give it to to run, like once you launch it, before you feel comfortable, maybe like stepping away while it's running or or or whatever. But there's just like a very careful buildup. But then like there is that there, there is obviously some some use for having some people also scale, you know, you can scale your operation, but you don't forget like it helps to scale with some some people too.

SPEAKER_02 1:12:18

I'll read the next one from Shipper. It was team A is playing team B. Team A A's rating is plus five, team B's rating is minus three. The match is played, ratings are updated. Must those new ratings still sum to plus two, the difference between the ratings before the match. If a team rises to plus five point five, must team B fall to minus three point five, or do you prefer systems to allow ratings update ratings updates of one game not to sum to zero? So I know like neither you nor I probably do like a. There's examples where you know two teams could play and you update your prior that, you know, maybe it's two rookie quarterbacks playing in week one against maybe a silly example, but two rookie quarterbacks. I think you could walk away from that game, upgrading both teams like materially, if the quarterbacks both like played considerably better. And like what I'm distilling there is the predictive thing, like quarterback play, which is very predictive to like team strength, that is what you're evaluating. And that in of itself doesn't need to sum to zero. So, like that's sort of like how I would think about it for all sports is like what's the predictive, what are the predictive things that I can pull from a matchup? And a lot of times those don't need to sum to zero. It's not like an offense versus defense thing. Um, and so like that's that's like how I would think about the problem.

SPEAKER_00 1:15:28

Yeah, I I agree with you on the it shouldn't have to sum to two. I had a similar thought of football. I was I I just wrote down like unf unforced errors, I feel like is broadly like what you're looking for. So like let's say in in football you have a game where like both quarterbacks just throw the ball directly to a defender three times each. The defender, there's no receiver in the area. The defender was like a linebacker who was just like standing there waiting to like stop a rush, like just egregious. Um, and if one team eventually has to win, and then you'd be like, well, um they both suck, like I'm gonna downgrade both of them. And like the same thing could happen, but on the flip side, like the quarterback doesn't make any um any like really stupid throws. The defense plays pretty well, makes the offense like really work for their yards, but the offense isn't you know turn the ball over. Um, and I know like some you know, some turnovers obviously can be defense impacted, but I do think a lot of them seem to be like really driven by the offense. Um that game, like you could have both, you know, teams playing a really good buttoned-up game without many mistakes, and like somebody wins by a last second field goal or last second, you know, whatever. I don't see any reason why you you couldn't upgrade both those teams.

SPEAKER_02 1:17:07

Agree. Let's read the next one from Broner. If you inherited 200 million tomorrow, tax-free, would you still bet on sports? And if so, what would you change? Trade money for fun, etc. I'll let you go first on this one.

SPEAKER_00 1:17:22

I do like that. He said tax-free, like that would make a huge difference. Like, of course, like you'd end up paying a lot in taxes, but I think you know, life's not that expensive. Like, you're broadly in the same spot of like you don't have to fucking do anything if you don't want to. Um I I was thinking about like honestly, like I'm not gonna say like it, I would be unhappy, but I was trying to think about like what I would do within this space specifically. And yeah, I think obviously one thing I would work more on would be maybe like originating um problems I think are cool. Maybe you know, I certainly would you know buy uh some good data, data feeds and whatnot, and you know, maybe work on some interesting originating stuff, but um I don't know. Like I I do say I said on the peanut butter episode that I would still do this, and I think I would do this, but it wouldn't be as much of like maybe our market making um stuff, and it would be more of like sports-specific originating. But honestly, there could be like a case where I just like try and become as good at golf as I I can be. You know, I I don't know. Like it does there is something about like there is something about you know feeling like the money you're making is impactful to your life that can't be overlooked. Like I love it, but there's a part of that too.

SPEAKER_02 1:19:00

Yeah, I don't know. I mean, I almost I sort of think you would still you would just like do what you're doing at a at a higher scale.

SPEAKER_00 1:19:08

Like, I mean that's the other option, like try and make a billion dollars or something. I don't know.

SPEAKER_02 1:19:13

Because I think for both of us, it's a little bit like the game that's fun.

SPEAKER_00 1:19:18

Yeah. Yeah, I agree. I agree. Like, that's the other thing is you can be like, well, now I'm now I'm going for jump. Now I'm going for Sig.

SPEAKER_02 1:19:26

Well, that's that was my first reaction.

SPEAKER_00 1:19:28

It's like to really go for it and be like, you know, I don't know though, like that could be coke because like I, you know, I think it's like run a huge company, which could be hard, right? Kind of annoying.

SPEAKER_02 1:19:43

Right. And you know, I'm I'm of the general belief, like if people get a lot of money, they just do more of like there's just more of like what they already sort of were. And so like um, you know, like this this idea of like, oh, if I had this money, all this money, I would just like sort of like go for it and like take all the, you know, I don't know, like I'm not doing that right now, so I don't know if that's true. So I mean, I guess the one thing I say is it's certainly not like like to me, the fun of this all is trying. Like a game or whatever is not fun to just like if you you're not trying. So like, you know, in his question, he said trade money for fun. Like, I don't really think it like it wouldn't be fun for me if you're not like trying.

SPEAKER_00 1:20:23

Um the stakes have to feel kind of real, you know?

SPEAKER_02 1:20:27

Like, yeah, yeah. Yeah, like if you're playing a board game, like it's not fun if you don't try like hard to win in for me. So absolutely. Um, so yeah, like I I think I think I don't have I don't have a great answer. I mean, my my first reaction would be to like just sort of like really go for it, meaning like hire, like try try and get like actual um like like really go for it in prediction markets, I guess is what I mean. Like try and hire like some really talented people and and really go for it, uh, and deploy like more capital, compete in in harder markets, like yeah, all that would be like is my first reaction. But again, like I don't know.

SPEAKER_00 1:21:10

Yeah, I'd probably be torn between that actually. Now that I don't think I would sit there and like originate a sport betting into like a hundred dollar limits just because I like originated. I I actually don't think I would do that now that we're talking about it. I think I wouldn't have to do that.

SPEAKER_02 1:21:25

I think you just want to go play a hearted game.

SPEAKER_00 1:21:27

Yeah, I probably do, yeah, exactly. Okay, I'd probably do what you said, or I would just go try and be on the champions tour and golf.

SPEAKER_02 1:21:35

Both good options.

SPEAKER_00 1:21:36

Yeah. Uh Cartoon Horse. Uh love cartoon horse, okay, aka Bowtie Better from back in the day. Um if you're in possession of a perfect crystal ball on a relative basis that at any point in time allowed you to know which side was the correct one, would you care about the inherent beauty, design, and overall shininess of the crystal ball, or would you be happy by the time it managed uh to perform its task, always picking the right selections, always making the numbers grow up in an accurate fashion? Um, like, no, I wouldn't care at all. But I think he had a core uh a second part that was more interesting, which is like, would you use it like would you use it to like extract max from the market and the ecosystem and kind of like what may be seen as a not fair way, which I think is is is um an interesting sub-question. So the first one I don't care what it looks like, do you?

SPEAKER_02 1:22:40

No, it might I sorry, I must have missed the second part of the question. The that you know, for this one, it reminds me of like you know, Steve Jobs being obsessed about like the inside of the iPod or whatever, like what the inside of the iPod looks like. To me, there is something to be said about you know, the way you do something is the way you do everything. And if you have like a cleanliness, you know, about yes, uh something, it's it it transfers to everything. But beyond that, no.

SPEAKER_00 1:23:07

But we know it's doing its job, right?

unknown 1:23:09

Yeah.

SPEAKER_02 1:23:10

Yeah.

SPEAKER_00 1:23:11

But I agree. Like if someone gave me a weird-looking crystal ball or one that looked like really like nice and put together, I would trust the nice and put together one a little more. Um, but yeah, would you use it?

SPEAKER_01 1:23:24

I would you use this thing?

SPEAKER_02 1:23:28

I mean, like there's this is like it's it been a topic before, like the morale. Like, is this this is basically a question of like would you pass post or like courtside? Is that like effectively the question? Kind of. Yeah, I mean, I'm not really like for me, it's just like there's other reasons, like none of that is interesting, or like it just not right, wouldn't be like something I like to do. But if like someone dropped it in my lap, I'm not gonna sit here and say like I wouldn't use it.

SPEAKER_00 1:23:57

Um yeah, what I would do is I would put it, I would put it in the closet and just like know that if I needed it, like don't worry, we're good. Like, and tell my wife, like, okay, we're fine. Like I'm not gonna use this, but like if I if I have to use it, I'll use it. Um, I think would probably be I'd be like, okay, you know, I'm not gonna just give it away. No, I think that's fair. Uh okay, the question now that we've been alluded to alluding to um, JWH, rank these non-sports book action options by edge in 2026 in terms of ROI per dollar invested, not factoring in scalability or time commitment. Uh oh yeah, right. I have to tell everybody because they're not looking at the list. Um, DFS, uh, best ball fantasy contests, RFQ quoting combos on prediction markets, uh market making slash taking individual trades on PMs and uh player-to-player pool of survivor brackets, etc. Okay. Do you wanna do you wanna go first with your list or do you want me to go first? Uh should we why don't we go why don't we go one by one? So like okay, number one in terms of ROI. I can go first and then and then you give. Okay. Number one in terms of ROI per dollar invested. I put best ball.

SPEAKER_02 1:25:37

Okay, I had that number two. I had the pools, number one.

SPEAKER_00 1:25:40

Okay, I had pools two.

SPEAKER_02 1:25:42

Okay, so we're in general agreement. Yeah. Those those two being the best.

SPEAKER_00 1:25:46

Okay, yeah. I just felt like best ball is so not scalable that like there might like first of all, you're doing like the season-long thing, but also you don't I don't think you have like it doesn't feel again. I'm not somebody who's played any best ball, but like it doesn't feel like it's particularly optimized, but maybe it is. I don't know.

SPEAKER_02 1:26:11

I think the thing with best ball, why I had it number two, is there's like average draft position. So like you can't be like like terrible. I mean, like you you can't put together just like a team that's like pure dead, right? Um whereas in the pools, I think you could do stuff that makes you like pure dead.

SPEAKER_00 1:26:30

That's a good point. And the fact that it's like brackets, it says survivor brackets, but you know, you can also think of like Calcutta's people can be pretty bad at that stuff.

SPEAKER_02 1:26:39

Yeah, like I mean, you could be pure dead probably in Best Buff. You drive like six quarterbacks or something, but like it's harder to be pure dead, I would say. So that was that was my rationale.

SPEAKER_00 1:26:48

Okay, okay, I can see it. I think we probably have the same number three. My number three is DFS. Yes, I had that as third for the same kind of reasons, minus it's now even more competitive, I think. And uh it's not season long, so there's um number two. This this one I really had a a high back and forth on. Um what I do okay. Number two, I put RFQ, but it's very dependent on what price band you're quoting because we're we're talking just quoting and not taking. Um these two because you could quote like 99.8, and that will never be a higher ROI than like quoting some of this like stuff that's near the 50% mark, which you can do more um as market making and taking individual stuff, but you can also like find I you can find um a lot. More like really price insensitive, really far off stuff occasionally. Um so I'm not like really I'm not really firm on either one of these because I think it's so dependent on like what exactly we're talking about. Um, but I put RFQs too.

SPEAKER_02 1:28:20

I had RFQs too. PM's last. Now I think the more interesting part of the question, not part of the question, because like when you're talking about just ROI, like yeah, it's exactly reverse. Like the the pools and best ball and DFS is so uh top heavy. Like in general, the more variants there should be higher ROI. And that that like this list is just really like an indication of that. It just goes from like highest variants to lowest variants, really. Um so if we're ranking, I I had two separate rankings I know that that were not asked for ranking of risk-adjusted ROI, and then my overall rankings for just like what a person who wants to try hard should spend their time on. So my risk-adjusted ROI, um RFQ, peer-to-peer pools, prediction markets, best ball, DFS, and then my my overall rankings for someone who's like gonna try hard, but not like be like uh you and you know, dedicate their whole life to it, would be the pools, prediction markets, RFQ, best ball, DFS. And the reason like the order is like that is like um the RF, why RFQ is the highest risk-adjusted ROI was because like that accounts for those, like that 99% stuff you were talking about, but also like there's a very high ceiling, I think, if you're doing that well, but you have to really, really try. And so that's why that one's lower in like my person who just wants to try sort of hard list. Um, I think the pools are good, basically either way for people like who want to try hard and like not, or maybe like not gonna dedicate a ton of time to this, but sometime I think there's like good opportunities. Obviously, it's high variance, but there's good opportunities there. And then, you know, PMs, I would say, would be next where it's not like gonna take 10 lifetimes to realize some some profit and you could you can actually do something, you know, well and and make some money. Whereas best ball and DFS, I think the stuff that does have high ROIs in that, like the big contests, like if if you're like a smaller player, like legitimately, you could play 10 lifetimes and not like you could have 30 ROI, play 10 lifetimes and never win a dollar. So that would be my ranking of how to take it up.

SPEAKER_00 1:30:35

Yeah, uh my like risk adjusted I had as the exact inverse if I'm trying to do that. So I would actually put market making slash PM taking as number one RFQ's two, but that that I could be convinced to flip. And then um DFS. Although, yeah, I'd probably switch. Oh yeah, yeah, I'd switch, I would bring the pools above DFS. But that is a good, that's a good secondary question. Yeah, yeah. I'd I'd say it looked kind of similar, except for I would have both the PM side of the pools, I think, just because of how soft they are now and how quickly you can turn stuff over.

SPEAKER_02 1:31:16

Fair enough.

SPEAKER_00 1:31:18

Um Grizz flow. How much time do you dedicate to finding a new edge? Let's say an existing edge you had once had is gone. How do you go about searching for a new one? Is it networking with people in the space, trial and errors, or multiple trial and errors after creating hypothesis? Um yeah, I was I was gonna say like just right now, I've not it depends. Like it really is like how much do we have backlog in terms of like getting stuff that we've already kind of worked on into production. Um if I know that that kind of backlog's pretty long, I won't be doing a ton of new edge stuff. Um, you know, time of the year, is it the World Cup? You know, not necessarily trying to reinvent the wheel during the World Cup, but like yeah, I mean, for me, I'm not somebody who like goes networks for new edges. Like I don't I don't know. I feel like it feels like kind of weird to be like, hey, you got not that you would ask it like this, like, hey, you got any new edges, bro? But like, I don't know, even to go fishing, like I just I I just I really like appreciate all of my like friends in the space and that we kind of just chat about share experiences and whatnot. I'm not necessarily like um ever really talking about edges. Uh you know, you ask a question here or there about specific things, of course. Um, but yeah, for me it's definitely it's definitely like the the latter, like a hypothesis and then testing it. Exactly. Like trying to do some like exploratory data thing to see like, is there something here? And then like if there is, or if it seems like there is, then then kind of build it a bit more. And that stuff, honestly, like the time it takes to do that has been consolidated a lot with uh you know Claude and the AI tools. So I I do think like you can do a lot more of that in in a certain time. So like I have been getting back to doing some more of that, but it just really depends like where we are in terms of like if we have a backlog or not.

SPEAKER_02 1:33:44

Yeah, for me, I think I'm just always like trying to look at what is popular and new. Um, and like I want to be like where where the recreational customers are at. So I mean, recently that's just been like where they're at on the predics. And so if there's like markets that are getting a ton of action um in terms of recreational people, in turn, even if I know nothing about it, I think over the last six months I've been much more willing to like look at it and and spend like an hour thinking about it. Um just because I want to be where the recreational customers are. Uh, I guess before prediction markets, it was always the same thing. Like when things were new and and getting popular, that's where I wanted to be, whether it was like the Pick'em apps or PIC6 or exchanges when they were new or whatever. Um, you know, we also got a question. We could probably hit two for one here. There was a question that's I think related to this. It was um closing in on it was from G40, closing in on halfway point through 2026. During your end of 2025 podcast, you gave some bold predictions for 2026. One of those was that there would be a new game that catches on and booms in 2026. Do you still believe this? Take. Is there a particular thought you have in terms of what that game might look like? I tend to be a better that thrives by being first example. Examples, pick six and calci. So particularly keen on this topic. And so, I mean, like that's that's how I think too, basically. Like, I I try and be where like there's a ton of new action and the rules are undefined and like it's not really solved. So like I don't know, like if there was a new sport added to DFS, like I would at least go look at it. Um, if there was like when every time Pick Six changed a rule, like I would look at it. If they changed the rules back to be like peer-to-peer, I would go look at it again. Um, when when there's these new, like uh, you know, stuff that's getting a lot of traction on the prediction markets, I'm looking at it. So I think um I was interested in like, I guess, to answer this question, like I don't necessarily know if there's a game. It seems like all the games, like quote unquote games, are sort of like on the prediction markets. Like, I don't know if you would consider stuff like mentioned markets a game, but that's like in the vein of like what broadly I would say is like some of these more niche markets. Um, I also think uh we talked about them a bunch of times on the podcast, like Splash is trying. I thought their World Cup survivor was really cool and like interesting. So hopefully more stuff like that. But um beyond that, yeah, I you know I think it's it's mostly games within the exchange right now, is what's popular.

SPEAKER_00 1:36:17

Yeah, that was what I wrote for that too. Like like the exchange is like the game store, and then the markets are the categories like the game or whatever. Like the game, if it's a new game, it's gonna come out on the exchange as of as of right now, I think. And if you think about like on the business side of it, like all of the money's in people developing stuff on that. So, but that's to say, like a lot of new games are coming out, you know, mention markets and and whatnot. So, you know, maybe a reframe of like it doesn't have to be a fully new like URL you're going to, but within that, you know, within that company, you'll find some new stuff. Um what was the first part of the question?

SPEAKER_02 1:37:00

It was something along the lines of like, do we you know our our our hot takes for 2026? I think we covered that one.

SPEAKER_00 1:37:06

Yeah, yeah, yeah, for sure.

SPEAKER_02 1:37:08

Next one from cheap prop bets. How do you structure your day-to-day or maybe week to week? Do you have set hours for betting versus your personal life?

SPEAKER_00 1:37:17

Uh kind of like my broadly, like what I want to try and do is always have like one weekend day where I'm off, and then have kind of slow first half of the day, Monday and Tuesday. Um, it really kind of depends on what's going on, but like I do I do try and uh I've been trying more and more to get to block out some some free time where I can actually not be uh paying attention. Like this last week I went to this last weekend I went to a wedding and I didn't pull my computer out once during the wedding, which is like all-time record. Um so we're we're trending that way. But it yeah, it it is tough. You wanna I think scheduling stuff and blocking stuff out ahead of time is the best way to make sure you inject a little balance, but um, you know, this isn't this is something I admittedly am not great at, and um, I'm working on.

SPEAKER_02 1:38:22

Yeah, I mean, I uh I obviously don't have uh problems. Yeah, I don't have ideal problems right now. If you've not listened, uh recently um had a kid. So mostly just uh, you know, every hour at a time here. But um I think when I, you know, but prior, I tried to have as much regularity as possible, meaning like trying to exercise in the morning, work the normal job during the day, try and do some sort of relaxation, hang out with with my wife or eat or whatever. Um, and then like lighter work, like lighter bedding type of stuff at night, and then heavier bedding stuff like on the weekend morning or whatever, um, when I'm not like at the end of the day. So that'd be like general for me, but I don't I wouldn't say I'm like I have like hard hours or anything for for any of that. I just you know try and make it work. I'm not like you know, those those guys who have like eight-hour morning routines or something, you know to optimize this.

SPEAKER_01 1:39:17

You don't got you don't cold plunge at 4 a.m. No are you ever gonna do soccer now? There's no show.

SPEAKER_02 1:39:24

I don't know. Um next one from Sharp Research, cat boost LTGBM. Uh I was gonna make a joke. I won't make that joke. Ltg BM or XGB NY.

SPEAKER_00 1:39:37

Yeah, that one was just throwing in because it was June. LG. Uh yeah, that was that was there you go.

SPEAKER_02 1:39:44

I thought it was it was uh fitting for the month. So I think we're we're firmly a uh I think you can't draw a straight line podcast. Uh if anybody's not familiar, these are like uh machine learning techniques. Um honestly, I think that the all like the I think these are all like tree-based um techniques. And honestly, those ones are pretty good. Like they're generally gonna give you more accuracy, and we would don't need to belabor the topic. They're gonna improve the accuracy, they're gonna increase your likelihood of overfitting. There's trade-offs with that. You can be good about that, you can not be good about that. Um, it depends what your use case is. In general, my position is to um underfit rather than overfit for any sports betting because of adverse selection and like betting the way betting markets work. Um but yeah, that's that's my two cents on this.

SPEAKER_00 1:40:37

Like, if I'm gonna give like a semi-answer to this, I have found cat boosts, which is some like category, there's some like other there's some category. I forget when I I did one uh category boost model and it was so bad. Like, I mean, I don't I also suck at like I'm not the person to be like carrying the flag for this and being like this is a bad technique because I certainly am not experienced in it, but it was just like horrendous. Um and XG boost like at least gave something that I felt like was pretty directionally correct, and like when I move stuff around, like it kind of moved roughly the way I felt like it it should. So um, and I actually don't I I don't know the uh LG TBQ boost or whatever. That one I I don't know. Uh so like in my very minimal personal experience before I I recommitted to Lions last episode, XG boost I felt like was pretty good.

SPEAKER_02 1:41:48

Okay, next one from sudo. At this point, what fraction of your revenue do you think is an edge from market making versus just the fact that you have better golf opinions?

SPEAKER_00 1:41:58

Okay, this is for you.

SPEAKER_02 1:42:01

I certainly don't have golf opinions, yeah.

SPEAKER_00 1:42:05

So I wrote like, yeah, I think the short answer is market making is a way bigger percent. I don't I don't know. Yeah, it's always I wish like I was better at like putting being firm and being like, I think this is like what percent of this this is, like the same question as the rec flow. But you know, definitely way bigger is the market making. But what I would say is like having good golf opinions and understanding like golf and what matters has made me better at has made us better at market making golf. So like if you took if you didn't allow us to use our golf opinion, like how many strokes gain this this person's worth, uh, and instead we had to use like data golf, just like everybody, you know, everybody else, I still think like the stuff, the the like there's other things that are important, like and sports specific that we know that would make us much more formidable there. Whereas if we were given like the same college basketball numbers as everybody else. So like the golf opinion goes into not just your your player skill, but it does kind of there's things that matter in the in the market making um logic as well.

SPEAKER_02 1:43:31

Yeah, I mean it makes sense to me. I mean, the more you know about like what moves prices, what doesn't, how prices are gonna move, how they are not gonna move, like when they're gonna move, like that's all helpful, obviously, if you don't know any of that.

SPEAKER_00 1:43:44

Right, right, exactly, exactly. Um James Bain, how much do you weigh prior NFL season performance compared to the weight you give future projections in your NFL model?

unknown 1:44:00

I agree.

SPEAKER_02 1:44:01

Just and James is a new listener, we don't really do much NFL. Um but I would think like for any football at this point, like if you're gonna if you're gonna try and model like team quality, like NFL is probably just so competitive, and honestly, probably colleges too, and there's so much data that it would need to be like player, all player-based. So I would I would think of it about it that way. Like, not just like how good was this team last year, but how good were these players and the players move and how much of that is predictive and and stuff like that.

SPEAKER_00 1:44:36

Yeah, yeah, I am not the person here. I'm not the person here. Um, but I think that that sums it up nicely. Um Max Biddle. I'm cu I'd be curious to know how much I think the question was I'd be curious to know how much large groups move um, like how much money they bet on given events. Was that how you read it?

SPEAKER_02 1:44:59

That's how I read it, yeah.

SPEAKER_00 1:45:01

Um I don't know about what one was golf and all those regular CFB games. Uh I do appreciate you putting golf uh in there next to college football. Um, golf, like before prediction markets, we would bet I think uh what was like maybe half a million on major weeks. Our bankroll is smaller, and like obviously the opportunity was to get down wasn't as high, so like maybe half a million on on majors and like 200,000 on a regular PJ tour event, or maybe even a little less. I so something like that. Like, I mean now it's just it's not even recognizable compared compared to that. So but yeah, in like through a normal I I don't know. I imagine like there's groups out there betting you definitely can bet six figures on major college football games, like probably even on if you're a good group, you probably are betting six figures on like the best college football groups, I feel like are definitely betting six figures per per game. I don't know if it's like per total, but at least like per per game.

SPEAKER_02 1:46:16

And it's got to be even higher, probably with prediction markets. Like, I would be surprised if the biggest entities aren't have like don't have even bigger positions on like individual sides, like on certain college football games every week.

SPEAKER_00 1:46:29

Right, right. Yeah, you could you could have easily have a million plus on like uh two ranked teams playing. Easily. Yeah, but like what feels like you're seeing. Yeah, that's great. I'm curious, I'm curious to know like what are like the biggest directional groups. Like, like, you know, it's one thing to be like like us, we're we're not like I wouldn't say like we're really taking an opinion on like a uh an NFL or NBA side ever, or like Shane's group, like I'm a whale who's you know does does a ton of volume, but they're not like super directional. But like who are like what are the biggest directional groups? Like are there people going in there like who have directionally like a million, two million um swings like per game? I don't know, because I know you know SIG and jump, like they're gonna be doing more of the delta delta neutral, but like are there people out there you know balling out like that?

SPEAKER_02 1:47:31

I mean, if you if you you know if you look at Flepp's account, like the way the way like on Cal Shoe, that's effectively the way his account moves. That's I don't know. I have no inside information, and but and he's spoken about some of his big positions on like um Spurs and or OKC or Baby Spurs. I don't know. I I can't remember. Okay. But like um, I'm sure there are people who have like uh really big, yeah, yeah. Uh yeah.

SPEAKER_00 1:47:57

That's cool. I'd be I'd be really interested if uh if you're listening to this somehow and you're part of a group that does you know who's like directionally million plus on on games, we would uh throw it out there. We'd love to chat with you.

SPEAKER_02 1:48:13

Um next one was for me. It was uh I won't go into all the details. It was a guy Leaguealytics. He asked me how much did try the triads feature into your League of Legends projections, and then went on to ask some other, you know, ball knowledge league details. Um, and basically wanted to, he said he ended the question with please speak on this for 40 minutes to prove it prove you know ball about League of Legends. So I don't honestly, I don't know what the triads refers to if I'm being totally blunt.

SPEAKER_00 1:48:42

I imagine the triads are rigging games, no.

SPEAKER_02 1:48:46

I honestly don't know. I do know, I do know you know Skarner and all the other stuff you you referred to. So um I I won't go for 40 minutes. My one my one take on on League of Legends that that I don't know if this means I know ball or I don't know ball, is that um, you know, the the the bad teams, well, just in general, people need to play more champions, is my take. Like they all like in pro play, everybody congregates around like the there's like a consensus of what champions are good, like the characters are good. Um, and everybody just plays them. And I think it's like a big mistake if you're like a bad team, like you should want to be playing like random stuff that people don't see, um and increasing variants. And so that that's maybe that's just because I think it's more exciting when you don't see the same same champions, but that's uh that's my only league league take currently. Okay.

SPEAKER_00 1:49:34

Um maybe we'll do maybe we'll we'll give you a League of Legends betting episode.

SPEAKER_02 1:49:40

When you're that's what we'll do. You know, you've you've had to do some some solo ones or or yeah, you know, better, better covered for me. When when you're you're away or whatever, I will do uh 47 minutes on.

SPEAKER_00 1:49:51

I would like to fun to listen to. Um okay. A goose has an LLM ever generated. An idea that you thought was good and didn't occur to you in a sports betting modeling um area you would consider yourself an expert in. And specifically says um not coding. So it can't be just a coding related thing. If not, do you think it'll get there soon? Uh I I can say like I don't know I've it certainly helps in a in a process of of generating ideas. So I can say probably yes. Like what I'll do is it kind of serves this purpose of like if you're it's struggle to like write the first sentence of an essay. It's like, hey, I'm trying to do this. Um or like I'm thinking about making this improvement. Like, can you suggest you know, read through you know the entire pipeline of this model from like getting the data to pricing and everything, and like let me know if you think anything's missing. Like I've done that, and it usually comes up with just horrendous ideas, but just seeing the ideas um does at least get my brain going, and then you start a conversation with it. So, like, I don't know if like it's ever like one-shotted a good idea, but it's definitely I've used it in like the ideation process.

SPEAKER_02 1:51:25

Yeah, I mean, I guess for for me, the hard thing is like what I don't know what I define myself as a quote unquote expert in. Um, like it's certainly like in terms of like market making stuff, like I wouldn't me personally, I like I wouldn't have ever considered myself, I still don't consider myself an expert in, but it's like certainly given me really good ideas on how to build that. Um so like if that's under the bedding, I would say definitely there. I frank, it's it's also like in some of the handling specific like aspects or shortcomings of certain modeling techniques, like handling tales and stuff, it's giving me good ideas there. Um so I for me, I guess I I think the answer is yes. But I think it's like asking, it's not just like it doesn't just like do it, it's like I'm having this issue. Here's one way I'm thinking about solving it. Do you have any other ways, or what are the issues with that? Is like how those have come about.

SPEAKER_00 1:52:20

Yeah, I think that's a good framework for for it. I I've done that exact same thing. Um Unhinged Sport asks broadly about whole score SGPs on FanDuel. I haven't really gotten into clicking around too much, but I think like, yeah, I mean, you know, that it's definitely an important thing, I think, to have in the SGP menu. If there's one thing I've realized, it's like the SGP menu being a bit wider is actually not not bad because people just like to put a bunch of random stuff in. Um and like SP said, like get to specific, you know, multiples or whatever. So uh, you know, I think that's great. And I think at some point I'll have uh an SGP thing for for golf that will price. So maybe uh I don't know. It's kind of one of those situations where I'll be interested to see if I if we have something that prices um completely organically prices um compare it to FanDuel and see what that dynamic is because I know like obviously a lot of people lean on FanDuel to price SGPs on uh Calci and Polly, or no, not Polly, but Calci specifically. Um so like what's that dynamic happen when you have your own number? Yeah, I think that'll that will be very interesting.

SPEAKER_02 1:53:42

So next one, I'm not even sure it's really a question, but Nikki Moneyballs, if you're looking for taxes or or legal advice, like this is not, you know, we appreciate that reach out, but this is not the place.

SPEAKER_01 1:53:53

My question was taxes-lc, etc. Not even etc. ECT. Um pay your taxes. That's one thing I always say. Pay them. LLC. Um, if it makes sense. Great one. There you go.

SPEAKER_02 1:54:11

That's not legal advice, but not legal advice tax advice.

SPEAKER_01 1:54:15

Actually, you know, tax advice, pay your taxes.

SPEAKER_00 1:54:18

I'm will I'm willing to put the flag in the ground.

SPEAKER_01 1:54:20

Be the brave podcaster who doesn't say not legal advice, pay your taxes. Yeah.

SPEAKER_02 1:54:26

All right. I, you know, that's his opinion and his opinion only. So um next one from AC. Do you always assume Cal Sheepali Live is sharper than the field when it's widely off market with enough liquidity? Or should you generally just arm these lines when they show up live? I think, you know, the one thing that I think is interesting about this that I've seen in the World Cup, and not necessarily live. Uh maybe you have a different, you you would have seen this more. Um, but like there's we talked about it with the World Cup. There's cases where like the World Cup is like out of whack with what I think broadly fair is. Like if you made me guess, like when we were talking about USA, I don't know this. This could be wrong, but my guess is the fair for the USA winning is actually closer on the sports books than it is um on Calci, would be my guess. Um and so I think when there's like so much flow on one side, there's like this we we talked about like this implicit coercion of the market makers where they can keep stepping back and back and back. And so I think without like in those situations, no, it's not like the sharpest. Like I don't know what USA live in you know soccer matches would be, but like that would be like a type of thing where maybe not the sharpest. Um, I would say in general, you're probably not that bad off, though, assuming they are the the sharpest. There's obviously a lot of people competing, which is just gonna probably make it a better price. But um, I think there's different dynamics that can that can maybe make that not true in certain cases. Like the the NBA finals, I think I've I wasn't following that market that closely, but I know there was like a lot of weird stuff and decisions that had to be made about like the Knicks coming back and all this stuff at halftime, um just because like the Knicks came back every single game. And so I think there's just like a flood of action on Knicks, and so I think every sportsbook uh market maker like had to make decisions about that, and so it wasn't it it wouldn't be clear to me like who who's most accurate there.

SPEAKER_00 1:56:28

Um, yeah, I th I I think like my my gut is is yeah, special situations. The World Cup is a very special situation, but like the each sportsbook's line is is already seen and kind of like pseudo-incorporated into the Cal Shoe line or prediction market line, and then you have like multiple uh makers kind of competing on price and and whatnot. So my baseline belief is the calcio line sharper um live. But you know, I think the situation you described SP was a good example of like when it would not be.

SPEAKER_02 1:57:08

All right, we got five more, and then the the fun one. I think we could do these quick. Um from Jeffy Joe. Um, when originating, do you blend your model's output prob probability with that of a known sharp line? Um and then he goes on to talk about like his MLB strikeout model. The one thing I'd point you to was our episode with Louie. Yes um I think we talked a lot about this. So that there would be far more um discussion around there. So I guess you know, broadly, I you know, you can you can blend it after the fact, you can incorporate the line in the model. But I would encourage you to go back to that episode. I I don't have the number or whatever, but the one with with Louis, we talked a ton about this. So I I would go back and and listen to that one.

SPEAKER_00 1:57:51

Yeah, without without knowing like exactly what your model is, it's hard to say, but like Louis is a sim guy. I like a good sim. And like what I like to do is instead of adjusting the line to the market after, I'll make tweaks to my player skills um that maybe reflect a little bit of a difference of opinion in the market, and then I'll let the sim kind of take it from there. Um, Brett, a bit of crossroads with betting at the moment. In the last two years, I've ran an old paink poker bankroll from 5k to 35k betting, but in the process I burned through all my accounts. Since then, uh he's teamed up with a couple of people, but getting meaningful volume uh down has been difficult. We're probably only getting 25% of the volume I used to. We've made around 5k, but I'm starting to question whether the juice is worth the squeeze. Um doesn't have prediction markets, so I think Brett's in the UK, uh, has Bet Fair, but there's a big commission. And yeah, he's just asking kind of what to do next. Should he model, you know? Oh, yeah. The other thing was like working with partners, he found you know, getting the bets to them often they've moved by the time the partners have logged in because they have to use digital ID to log into betting accounts.

SPEAKER_02 1:59:20

Yeah, I guess my broad advice would be like anytime you're at a crossroads, you're gonna have to do something that's harder than what you're already doing. And so I would look at like what those harder things are. That could be like getting more accounts, and like it sounds like that's that's getting hard for you, but like continuing to get accounts, playing into harder or more liquid markets, betting later, dealing with some of the challenges of exchanges. And I would just sort of like look inward and what what your skill set is going to be best at. Um, and that's sort of what I would do. So, like for me, you know, like I wouldn't like the things I would be good at would be like going to harder problems and stuff rather than trying to like account gather. And so that would be like if I ever wanted to grow or scale up or continue to to make more, like that's the stuff I would do. But it depends like just what you're good at, what you think you would have success at, and and lean into those.

SPEAKER_00 2:00:17

Yeah, yeah, I think that I think that's well said. I mean, I would say like the modeling originating solves kind of the latency question a little bit. You know, I assume there's maybe a lot of top down that scale that first five to 35k, which is like kind of what you should be doing. So if you're if you're worried about specifically latency, like modeling, if you have a and that's like in your wheelhouse, that's a good way to uh solve that problem, kind of, is like if you can come up with your own number, maybe predict kind of where the line will move a little bit better, then you don't need to be you can more easily, you know, your schedule, you know, this book's gonna open at this time, this data comes through, then I'll run my model, and I'll tell my betting partners like, okay, I need you to be around this time, I'll send you the bets. If not, you know, whatever. And it's it's just a lot easier to manage your time like that. And uh so that would that would be my one thing. The originating is not a terrible idea. Uh what's next? Double slush.

SPEAKER_02 2:01:24

Double slush. Let's say you're staring at a bet that looks like a guaranteed win, something as obvious as a sun coming up tomorrow. You've checked everything and it's all airtight. How much of your total life savings would you risk? One more detail. This bet is being placed on a prediction market. I mean, that detail is important, uh, because like I'm about to get rose cocked, is what I'm guessing. Right. Like the sun didn't really come up, it came like diagonal. Yeah, yeah, right. Yeah.

SPEAKER_00 2:01:52

So um it's always there, it's just at a different part of the earth or something.

SPEAKER_02 2:01:58

Yeah, yeah. I mean, so I don't know. I'd be I'd be quite careful. And like there are situations that are not the sun coming up that I've seen on prediction markets, and um, you know, obviously, like you can't get infinite size on on a lot of these things that like seem like literally like zero percent chance in my head, some of them. Um but yeah, you always have doubt. So I I don't really, I don't really know. Cause like when when people are taking the other side, I think the thing I would think would be why are people taking the other side? Because a lot of times in some of those markets, I've thought it it's sort of apparent, it's people trying to just like it could be like is it something that's gonna actually settle a year from now and people like just bought at one price and are trying to get out? Um, like that could be so it it's like why are people on the other side would be the thing I'm asking myself before I size anything.

SPEAKER_00 2:02:49

Right. And like even in that case, where like I think both those boxes are checked, like Anthony Joshua, Jake Paul, like even then, I'm scared to go too big. Like I think there's you know, it's just so valuable to be in the game right now. And that's not saying like you shouldn't size big, but like there's no reason to there's no reason to rip like your whole bankroll. Like rip a lot, but yeah, it shouldn't, it shouldn't get too, no matter what. Like you just need to be in the game. Uh we did G4D. Um, okay, there's a good one. Yeah, uh Pripton Knight says he's having a hard time reconciling the advice to just build a shitty model to get started, and the thought that you should have a hypothesis as to why you have an edge. I'm thinking about building an MLB props model, but I have no reason to believe they'd be better in the market. No specific angle slash hypothesis attack. Is it still worth building the shitty model?

SPEAKER_02 2:03:54

Yeah, I mean, for me, I would pick a problem that you can reasonably see yourself like getting good enough at to beat. Like if you don't think you have any skills or like hypotheses, like that's probably not the market I would go after. Um, so like, yeah, I mean, like, I wouldn't just do MLB strikeouts just to do it. I would try and pick something you think you have like some sort of hypothesis about. So for me, like I can give a specific example. Like a little while back, I wanted to bet. I wanna, I would, you know, had some some more time uh open up, and I wanted to bet MLB stuff. And so I went and looked, looked around and tried to figure out what I should spend my time on. And like the the market that jumped out to me for me was like uh pitcher outs. And so the reason like that jumped out to me is I had hypotheses around like how the distributions would work and what was important and the things I'm good at modeling and the things I'm bad at modeling. I thought things that are good at modeling, like um being able to use like the spread and the total and and use that as inputs and like uh managerial decisions. And like I think I mentioned, like the distribution isn't normal. Like it's not like it's a continuous where you get pooled, you're much more likely to get pulled at the end of an inning. Like all that stuff I thought I would be good at. And so like I mod I did that one instead of like pitcher strikeouts, where it's like I'm not gonna be good at projecting lineups or like the pitcher quality or like these certain things that are like I just it's I don't have hypotheses around of how to be good at it. Um, and so like I would just pick something you like, I don't think it has to be one or the other. Like, I think I think you're exactly right not to just go and start modeling something you have no idea of how you're gonna generate your edge.

SPEAKER_00 2:05:41

Yeah, I think that I that's good advice. I don't I don't really have much much else to add there. Um rising. I'm a software engineer that develops software that gets live odds and auto bets at millisecond latency on exchanges and a few of the other major sports books for mainlines. I'm still pretty new to the betting side, though. So my question is what's the smartest way to actually scale this into real dollar returns? I mean, I think the exchanges, like if if this is if you gotta do it in the smart way because you know everybody on the exchanges is also scraping odds um or has you know odds API or or whatever. So you just have to make sure like that the value you're seeing is is that you're you basically want to see like, am I predicting the price in the next like three seconds on an exchange? Okay, like am I actually moving faster than the exchange? And then if you are like you're rich, congratulations. You know, I don't like that's a easy if that works, then like that's the easy thing to scale.

SPEAKER_02 2:06:49

Yeah, my answer is pretty simple. Collect data on on who updates the fast, like if you're if you're collecting all this data and latency, like who updates the fastest, collect data on who updates the fastest and bet into who's who's updating the slowest, yeah, wherever that is.

SPEAKER_00 2:07:03

So yeah. Okay, and our guy, Peanut. Um okay, Mr. Peanut Better, question of the week. Uh, would you rather have a no air conditioning whenever you go in public? Uh the AC to this is this is the part that gets me. The AC turns off for everyone, and everyone knows you're the reason it turns off. However, strangers cannot bother you about this or deny you entry. Consider public any place you wouldn't feel comfortable wearing sweatpants. I mean, I I think that uh yeah, public is we know what public is. And then B, you are deaf, but only from speakers, not not counting headphones, any TV, stereo system, etc., you cannot hear. Whether this is at a bar, in a stadium, your car, etc., you can hear music only if in headphones. Your phone, you will need headphones. Um, assume a loose definition of speaker, basically any device that could be considered a speaker unless you can prove it's not. So I assume that's like also your computer, you know, if you're not wearing headphones. Um God, man.

SPEAKER_02 2:08:16

I I know it's what you have to pick.

SPEAKER_00 2:08:21

Yeah, I mean, I kind of gotta pick B. I just couldn't handle it.

SPEAKER_02 2:08:25

You're too much about people, please. Air too.

SPEAKER_00 2:08:27

I couldn't handle A. Like, I would, and we live in a really fucking hot place.

SPEAKER_02 2:08:33

Like that was that was so so I actually thought this was good. I thought it was, you know, easy at first, and then I got to thinking about I think if you pick A, like you have you just have to move to a place where air conditioning isn't like as much of a thing, you know. And then it wouldn't be that bad, honestly.

SPEAKER_00 2:08:50

TV would suck though, because my wife and I like to watch T. That's like our favor, that's kind of like one of our favorite things to do together. It's just like watch shows and stuff.

SPEAKER_02 2:08:58

So then we would have so many shared experiences in B. Um I don't go many places.

SPEAKER_00 2:09:07

I don't go many places.

SPEAKER_02 2:09:09

That was the thought on like the number of places I'm not come that I go where I would not be comfortable wearing sweatpants is like really quite yeah, that's the other thing.

SPEAKER_00 2:09:18

I I don't think like we should anchor to that because I do think we're probably more likely to wear sweatpants somewhere. Like right, like I would wear sweatpants to the grocery store. But like if I had to walk into the grocery store and the AC would go off and everything would spoil and everyone would be miserable, I'd probably just order groceries. Yeah, actually, you know what? I at first like A was my nightmare, but I go so few places, like sadly, um, that I think I'm switching to B because I watch TV a ton with my wife.

SPEAKER_02 2:09:49

So I was there, I was there with you, but then I thought about like some big life events like a wedding. Like my thought of like going to a wedding is just like you have to stand outside. You would have to stand up. I know that's like a you know a very rare thing, but like you just can't go to anybody's wedding, you know, you can't go to parties. So I think I think my choice is B. I don't watch a lot of TV, so I don't have that, you know, like problem with watching TV with like the wife. Um it would be rough, but like it's B for me.

SPEAKER_00 2:10:23

I think I switched to I'd rather be deaf. I think I switched to A, but I think I switched to you would you would want to be, yeah. I think I would switch to A, but I I understand. I under I I completely understand B. It was a really good question. This one was very good. Um all right. I mean Bayesian update, I think we're kind of at at time. Um, my brief Bayesian update is like some people I I do, you know, I I think there's all this like, oh my god, people are like losing money. We should think about who and why people are losing money. Like by being overconfident and thinking like they're this genius that can never be wrong, that's okay. I think that's okay. And this is something like Alex uh land trader said in our our episode, and you know what? I'm kind of I'm kind of getting on board with that because there like if you're gonna just tell me that like you think like call she rigged the Giannis trade or or whatever, like there's a certain point where you deserve to lose money. I'm sorry. I'm sorry, I'm taking a stance. Um, and uh yeah, that's my basic update.

SPEAKER_02 2:11:41

I like it. You know, it's not very uh politically correct of you, but you know, I like you going out on it.

SPEAKER_00 2:11:48

That's a new me.

SPEAKER_02 2:11:51

My update is um, and I, you know, honestly, I'm a bad example because I I didn't get a chance to read a couple of those news news items, so so my apologies. But my update is I wish more people did like the bare minimum to prepare for podcasts. I think there's like a huge difference when it's clear like people have given like a little bit of thought about topics and stuff before podcasts. And so I mean, like me and you, we don't we certainly don't grind like hard to to set up the show, but I think you and I both try and like read.

SPEAKER_00 2:12:24

We have a doc every week and we have little notes on the questions.

SPEAKER_02 2:12:30

But yeah, yeah, we have a doc and we have you know notes and stuff. So I think it just like a tiny bit of uh of effort. So, you know, me not not bringing my A game on those news news sections today was uh was a reminder to that. So um, you know, for all all fellow content creators like like myself and you, we we just gotta make sure we're grinding to to to be prepared. I think it really improves the quality.

SPEAKER_00 2:12:55

You're you're right. And like that, that's something where if I my time to prepare for correlates to like what how I really think that, especially like the questions in the news go. Um in terms of like Yeah, exactly.

SPEAKER_02 2:13:09

I mean, if you if you just give it like you don't have to give it a lot, but if you just give it like each question like two minutes of thought, like I can give a much better answer than it was just asked. And I get like when we do interviews and stuff, like it's sometimes we get off the beaten path, but you know, I think we we try and get all our interviewees a document. I think it really does improve the the conversation. So that's that's my update.

SPEAKER_00 2:13:30

Sweet. Um, well, thanks everybody for listening. We'll have a uh we'll have a good guest for you next week.