[00:00:00] Speaker A: Predictive Programming Episode 14 with Maple how's it going? He's sticking with Maple for now.
[00:00:07] Speaker B: Yeah.
[00:00:07] Speaker A: Yeah.
[00:00:07] Speaker C: Do you have a real name?
[00:00:10] Speaker B: No. Got it.
[00:00:11] Speaker C: Okay.
[00:00:12] Speaker A: How's it going, brother? Good to see you.
[00:00:13] Speaker B: Yeah, pretty good. Great to see you.
[00:00:15] Speaker A: Fresh off, I guess. Not that fresh anymore. But you did John's podcast a few months ago. Yeah. Been real active on Twitter.
[00:00:22] Speaker B: Semi. Yeah.
[00:00:23] Speaker A: Getting your fingers in all kinds of pies.
[00:00:25] Speaker B: Yeah.
[00:00:26] Speaker A: And now here to talk to us. We appreciate it.
[00:00:30] Speaker C: Did you want to see myself or Henry Moore? He got to put you on the spot.
[00:00:33] Speaker A: I've already.
[00:00:34] Speaker B: I came and saw Henry a few months ago, so I wanted to see you more.
I like that.
[00:00:38] Speaker A: I think Louis was the. Yeah.
[00:00:40] Speaker B: Louie's the real Louis is my guy.
[00:00:42] Speaker A: Yeah.
Except he's very easy to miss because of how often he just doesn't show up for work.
[00:00:47] Speaker C: He's not in right now, you know. All right, whatever.
I want to start with kind of like a little bit of a background.
After college, did you or did you go to college? What happened? Did you have a normal job?
[00:01:00] Speaker A: Wait, wait. Even more background. Background. What do you do, Maple? What's your story? What's your bio?
[00:01:05] Speaker B: My bio?
[00:01:06] Speaker A: No, not even bio. Sorry. What do you do right now that makes you a guest on this show?
[00:01:10] Speaker B: I'm predicting. That's what it's all about.
[00:01:13] Speaker A: Are you winning doing that?
[00:01:15] Speaker B: I mean, I'm going for top of the leaderboard for public this month.
[00:01:21] Speaker A: Are you in the running for the Cal Sheets leaderboard?
[00:01:23] Speaker B: Well, I mean, until the 21 people ahead of me can opt in, but in terms of public, yeah, we're rolling with that. So I'm. I'm on a nice heater right now.
I mean, you have your ebbs and flows.
[00:01:34] Speaker A: What's the biggest win of the month so far for you?
There's been some high volume stuff because of playoffs and stuff.
[00:01:41] Speaker B: Yeah, I hit.
There was one combo, I hit for 80,000.
[00:01:46] Speaker A: A combo?
[00:01:46] Speaker B: Yeah.
[00:01:47] Speaker A: A buy side combo.
[00:01:48] Speaker B: Yeah. Wow.
[00:01:50] Speaker A: Can you disclose the legs or is.
[00:01:52] Speaker B: It a repeatedly exploitable.
[00:01:54] Speaker A: Nice.
[00:01:55] Speaker B: It's. I mean it's not repeatable like.
But you have. You got to. You got to have some opinions to.
[00:02:02] Speaker A: Trade on a little ball knowledge. NFL or NBA?
[00:02:05] Speaker B: NBA. Yeah.
[00:02:08] Speaker A: Can you imagine losing 80K writing a mid season NBA parlay?
[00:02:12] Speaker C: I'd be very upset.
[00:02:13] Speaker A: Not something I'm interested in.
[00:02:14] Speaker C: I'd be very upset. Just.
[00:02:16] Speaker B: Yeah.
[00:02:17] Speaker A: Anyways. Yeah. Let's get back to Chris's question.
[00:02:20] Speaker B: Yeah. Yeah. So I graduated school, went to Penn State, majored in finance. And math and then had a supply chain job out of college.
So was working really hard on the COVID supply chain throughout all of that, working on an ocean freight team. And we were just figuring out how to get shipping containers into the United States as quickly as possible with all that crap going on.
But while I was doing that, you know, it was also ramping up the sports stuff on the side.
[00:02:51] Speaker C: So wait, wait, how did you. Okay, how do you get to like, no even know about it? Like, you have to like, someone has to have told you something. You see an ad, what happened?
[00:03:01] Speaker B: I mean the. It gradually builds and I mean as you get more confidence, you get more bankroll, you get more skills, you're going to find more markets, more opportunities. But I mean like a lot of people, you start with the top down type of stuff of.
[00:03:13] Speaker C: Did you start with like an odds gym or something like that?
[00:03:15] Speaker B: Yeah, well, at the time it was odds. Boom. Okay, wait, were you.
[00:03:19] Speaker A: Did you ever recreationally bet sports or did you start off with. I'm only going to do this if I think I have an edge or an angle.
[00:03:25] Speaker B: I always wanted to have an edge. I mean it could have been like really basic stuff before I even was looking at top down. It's like, okay, look at this draftkings boost that they're giving me $150 on like promo that seems, that seems good. So yeah, I mean do a little bit of the promo, a little bit of the boost type stuff. But yeah, I never. And I mean I still, I don't have the interest in like firing minus EV action. Like I want. I mean, in some senses, yeah. But in general, like I never, I don't have the desire to like just go play a bunch of minus EV stuff and see what happens.
[00:03:58] Speaker A: I sometimes wonder because so many people did the like promo to top down to like serious pipeline. If they had never gone overboard with all the customer acquisition, would they not have this problem of all these sharps who can crush them? You know what I mean?
[00:04:12] Speaker B: Like, they made it too easy to.
[00:04:13] Speaker A: Learn how to win.
[00:04:14] Speaker B: A lot of people's banks.
[00:04:16] Speaker A: They basically wrote this like, you know, beginner intermediate hard training platform for how to win perhaps a generational fumble.
[00:04:24] Speaker C: That's actually a very good point. I've thought about it like kind of crazy.
[00:04:27] Speaker B: Yeah.
[00:04:28] Speaker A: Okay, so. So that's.
You come in that way.
[00:04:33] Speaker B: What?
[00:04:33] Speaker A: I feel like there's a leap though, right? I think a lot of people are familiar with much of that funnel until you get to the.
I start making my own numbers. I start Being.
[00:04:44] Speaker C: I have a quick question before we get to that, because this was even before my time.
How were the limits and stuff like that? I would love to know.
I've heard stuff in the golden age era, but was it truly like, you could click whatever you wanted?
[00:04:59] Speaker B: To a certain extent, yeah. I mean, looking back, it's like, of course, if I take my knowledge and bankroll to that timeframe, the amount of extra damage I could have done was a lot. But I mean, for example, with. With DraftKings, I mean, that was a very large source of my early earn.
You could pretty much click any same game parlay with any. So, like, you could be playing the most garbage stuff, but as long as it was inside of a same game parlay, they would let you click it essentially unlimited.
Because, you know, maybe the standard limit would be like, I mean, could have been like, win $100,000 was like the standard limit on. Of the same game parlays. And then you could click it multiple times and, you know, you could. You could combo it with, okay, let's do this parlay with this money line and this parlay with this one. And you know, add in this, like, safe legs was like a legitimate strategy to add on. So it's like, okay, I know this, I know this. This specific safe legs are needing something.
[00:05:57] Speaker A: -2099% just to get it to be a parlay. So you hit a different flow of.
[00:06:02] Speaker B: Like, trade, which is not something that you're allowed to do anymore.
[00:06:06] Speaker A: Not maybe on DraftKings.
Everything old will be new again.
[00:06:11] Speaker B: Yeah.
[00:06:11] Speaker C: All right, so now, sorry, back to Henry's question.
[00:06:14] Speaker B: Yeah. Yes, let's.
[00:06:15] Speaker A: Let's talk about when. Because right now you originate numbers, right? You do math, do statistics, and come up with your own opinion on the fair price of how many points Chris Donna is going to have today or method of victory, UFC or whatever. Right? We mentioned some of the. Yeah, yeah.
And a kind of diverse array of markets, too.
When.
When do you start going on that journey? When do you start thinking you're winning at it? Like, can you talk about that?
[00:06:48] Speaker B: Yeah. So I would say, like the. The first start for me with kind of making some basic numbers was actually in some baseball markets, like, in terms of parlays.
I mean, the reason baseball is pretty easy in terms of parlays is the sample size that you have to look at is massive. So it's pretty easy to query a database and say, like, okay, if this guy hits a home run, what percentage of the time does the game total go over? If this Team covers the spread. What's the probability goes over for multiple years, which I can't believe it lasted on DraftKings. You could parlay the away favorite in baseball with the game total over with no correlation added. So. So like I had, like, I put together like a real basic model for that to be like, okay, if you look at, you know, game total seven and a half, what do you upgrade the over to, given that the away team covered? And so, I mean, like, that's just super easy numbers to make. So where I would say that my strengths are in originating and Louis will make fun of me because I've just got some Excel spreadsheets hanging out on my computer that are all cobbled together and are kind of a mess. Like, I'm nowhere close to like the best modeler out there, have the best math or anything with it. It's more knowing what's the market that you should be going after and then what kind of data should you be.
[00:08:10] Speaker C: Looking at with that baseball thing? So that's just like you're basically getting an extra half inning guaranteed because.
[00:08:16] Speaker B: And the A team scores, they score more runs because they covered. Oh.
[00:08:22] Speaker C: Cause they cover the spread minus one. Okay, so that's the. Do you know roughly what percent edge that is? Like, it depends.
[00:08:28] Speaker B: It was probably like 10% and you could. I mean, I'm sure there are tons.
[00:08:33] Speaker A: Of PPH skins where you can still run that probably. And it's all a matter of how many are you going to jam into a bookie before they notice.
[00:08:39] Speaker C: Yeah, I was just thinking this sounded good, but I didn't sound like mega. Get everything in like.
[00:08:43] Speaker B: Okay, yeah, no, yeah, I mean, that was a good edge. But I mean, the nice thing is if you have something like that that they're not smart enough to recognize that, like, you're getting in good and you're betting now like an at post parlay that they're going to grade and be like, oh, this guy's betting at like minus 10% or whatever. Then you know that that's a great. That's a great thing to put into an account.
[00:09:05] Speaker A: Yeah, very much so. Okay, so you would say you think your maybe math that you're doing on originating is not the most impressive stuff, but the choice of markets to focus on and the data that you use to attack those markets is where you think you have some edge, Right?
What about.
I mean, that's kind of in the bucket of information, but what about information more in the, like press conferences, Twitter injury stuff. Do you feel like that's a big part of your work.
[00:09:38] Speaker B: Not, not at all.
[00:09:39] Speaker A: I.
[00:09:40] Speaker B: It's just, it's not something that interests me as much, honestly, to like, definitely.
[00:09:44] Speaker A: The most press piece of it.
[00:09:46] Speaker B: Yeah, sure. I mean, obviously you can see where the value is in it. Um, especially like, I mean, you can, you, you can just see in the middle of the day with an NBA side, like it's priced at the midpoint of this player being out. And so you, you can look at it, you know, it's not going to close. Wherever it's at right now, it's not going to close there. So. Yeah, I mean, if you've got a good information read on where it's going, then that's a great edge, but that's less of my style.
[00:10:11] Speaker A: All right, so then in 2024, Novig Profit X sweeps platforms launch in about 40 states.
[00:10:18] Speaker B: Yeah.
[00:10:19] Speaker A: How, how quickly are you on that?
[00:10:22] Speaker B: So I was like, before the launch, I was in conversations and like all in on like, all right, we're ready to get this nationwide. I had done some trading on Profit X while they were legal in New Jersey, but very limited. And it was getting to the point where it's like the same game parlays that I was hitting were not keeping my accounts alive long enough.
And it's like, all right, I, I put together my MBA props model at that point. And so I looked at it and I was like, okay, I know that if you post an arb to market, like people love to fill that. And people say, oh, this is the off market. Like at the very beginning.
[00:11:00] Speaker A: Just in New Jersey. Yeah.
[00:11:02] Speaker B: Wow.
[00:11:02] Speaker A: Yeah. Okay.
[00:11:03] Speaker B: So, yeah, I mean, I, I had had some success with, with sport trade and Profit X in New Jersey while they were regulated at the beginning. And so then, I mean, in my head it's like, okay, if I can have success with this in New Jersey and this is now being open to a nationwide audience, I pretty much dropped everything else and said I'm going all in on. On sweepstakes. And so I spent a lot of time on that last year.
[00:11:24] Speaker A: I would also say that I think another huge edge is recognizing this is this thing that's happening right now. And I'm dropping everything. Even good earns I have. And we're just going to do this. Yeah. While we can.
Which is a hard thing to do very often.
[00:11:40] Speaker B: Right. I mean, it's a really hard part of betting, predicting, whatever professionally is. I mean, I've had to pretty much reinvent my entire process like three, four times right now. And some people are Going to be able to hang with it. And you're also going to have a lot of people drop off after. Okay, I was good at this thing. And now you can't actually earn off of this thing anymore. The earn is just way down. So now you have to pivot into this new thing. And I think that's super important overall to just be ready to see where the landscape is and where the volume is and where you think that you can succeed and be aggressive in putting yourself in that spot early.
[00:12:19] Speaker A: Hold on, let's talk about that. As much as you want to disclose. So when sweepstakes exchanges first go live a little over a year ago, what would you describe as the drop everything angle? Obviously, you're doing all your volume there, but what is making it so good? And then what would you say right now is the. Is the thing that you've dropped everything.
[00:12:42] Speaker B: To do in terms of just the amount of work that it took. So, you know, if I was putting together a list of, let's say, 50 NBA props in a day, and I was trading all these by hand and I was trying to fill them as much as possible. So you got the time that you're spending on making your numbers each day you got. I mean, I'm not a news junkie, but you at least need to know if this guy is questionable. You shouldn't bet the unders on the other players because if he's out, then you got a problem.
So just the amount of time that it took to make the numbers and trade the numbers, and I was doing it all as a lone wolf, which is also part of why I have decided to take on a little bit more public of a Persona as lone wolf mentality is not good anymore, in my opinion. It served me well for a while, but just was wild.
[00:13:33] Speaker A: Very few lone wolves remain lone wolves.
[00:13:36] Speaker B: Yeah.
[00:13:36] Speaker A: Yeah.
[00:13:39] Speaker B: I should. I should have thought more about that.
[00:13:42] Speaker C: When you're first starting is all you're doing on the sweeps, the base looks secrets out at this point.
[00:13:47] Speaker B: Yeah.
[00:13:47] Speaker C: Post an arc market.
[00:13:48] Speaker B: Yes.
[00:13:48] Speaker C: Okay.
[00:13:49] Speaker B: Yeah. I mean, well. And yeah, so that's where you say all you're doing.
[00:13:52] Speaker A: But like, you can't just randomly post arbs to market. You have to have the nuts.
[00:13:56] Speaker B: Right?
[00:13:56] Speaker A: You're very good at making numbers.
[00:13:58] Speaker C: No, I understand that, but it was just like, it was funny for like there was a couple month window where like all the odds jammers were like, these exchanges are free money. And then like you look at the P. Ls and it's like, wow, I'm Losing on every exchange just because these freaks are like on the other side of it.
[00:14:15] Speaker B: I had so much fun like searching profit X and novig on Twitter like every day and just seeing the posts of I got this 12% EV play on profit X. Isaiah Collier turnovers are to flip everything. And like that. I mean yeah, you can talk about it now because oh my man Isaiah.
[00:14:36] Speaker A: Is that I had hybrid WNBA NBA.
[00:14:39] Speaker B: Player but I had. There was one game last year it lost all my fun stories or my bets that lost. But I had like.
[00:14:47] Speaker C: You mean trades that lost.
[00:14:48] Speaker B: Yeah, I had 50,000 on Isaiah Collier turnovers on profit X because Flyff would not move their line. And this was the time when everybody was just hammering flip. So I just let this line sit up all day. I think I made it like a 20% edge or something like that.
But like yeah, I can talk about it now because you cannot accomplish the same or you can't even bet turnovers anywhere anymore period.
But yeah, the. I mean there's obviously regrets looking back at it but just in terms of the volume that you could get on the quality, like how low quality the stuff was at the end of the day was just unreal. So like I definitely don't regret like going all into the sweepstakes model at the time that I did.
But there's so many other problems obviously that happen when you put your numbers out. Like you know, I think I make good NBA prop numbers but if, if a couple other smart people disagree with me on an individual prop and what are they going to do? They're going to look at me and see like this guy's an idiot and he's posting like a way off market number and I don't agree with his projection here. And then you get adversely selected on that.
[00:15:58] Speaker C: I was going to ask when did you start thinking about that?
[00:16:02] Speaker B: I definitely knew about it early on but I don't think appreciated the scale of what it would matter. Well, knew yeah knew I mean knew that it would happen. But I mean you also have the base stuff. Like if you're hand trading NBA with how horrendous the news is, like you might have a large or like I would just let large orders sit up there, you know, for a couple hours and then all of a sudden, you know, the underdog tweet comes out that some surprise player just got downgraded to out. Now all of a sudden you're letting this play sit.
If you didn't take that play down instantly, now you got this huge fill that is now minus 30% or whatever. It's like, all right, now you got to win a lot of props or place a lot of good props to make up for that one bad loss.
[00:16:47] Speaker A: So I'm not gonna ask you to leak what you think the biggest edges are right now. But Cowshi is the highest volume platform currently for reasons that we've parsed a million times relating to relationships with Robinhood almost entirely.
Which means that there are big opportunities to make money there. But then of course there are new entrants. DraftKings FanDuel products are not good, but they'll probably get good. As much as we joke about they're trying to derail the industry by making horrible products, that's probably not true.
And so I think you would probably agree a lot of what you're doing right now will not be profitable in the same way a year from now.
[00:17:31] Speaker B: Right.
[00:17:31] Speaker A: Would you say that or not as easy?
[00:17:34] Speaker B: Yeah, I mean it's certainly going to get harder. I think that, I mean why Kalshi is great, even though I do talk a lot of crap about them in general, but why they're great compared to a novig and a profit X is the only people who are depositing onto these sweeps platforms and embedding peer to peer stuff into what I would post are generally customers who believe that they're going to win money or they're arbing.
But on Kalshi I don't think that's a secret that there are plenty of recreational customers filling lots of different stuff. So yeah, I mean the competition is going to get worse. I think I have a lot of spots that as long as Kalshi exists in a year in the form that it is, I feel pretty confident that it's still going to be profitable for me. But yeah, I mean you always have to be ready to adapt to a new situation.
[00:18:29] Speaker C: What do you think is more likely at this point?
Kalshi increasing their fees? I mean they're very generous maker fees compared to the taker fees and they.
[00:18:38] Speaker A: Generous is being forgiving on makers.
[00:18:40] Speaker B: Yes, relatively speaking.
[00:18:43] Speaker C: And you know, they see people like you and they see the earn, they say why should you get so much? Why don't they get so much and increase their fees?
[00:18:50] Speaker A: Well also time out. There's no such thing as maker and taker fees. This is like who pays the tax? There is no, but everybody splits it. If you cut the, if you cut the taker fees and applied to the makers, it's still the same.
[00:19:02] Speaker B: Well, but if you gap, I mean if you factor in the tick sizes and everything. And then what you're posting, like if it was half and half, you wouldn't like, I mean assume that the average person is half and half. Then the institutions negotiate special deals that, that get lower than that. So now the institutions can quote, which, I mean the institutions already have an advantage, but they can quote better than.
[00:19:21] Speaker A: You and you're into the.
[00:19:23] Speaker C: Also that's just not true because if you have books like major NFL money line, you have like 37 cents, you can be a maker.37 cents or take your 38 cents if it's split fees. If it's the same fees for taker and maker, you're now it's fine taking the 38, whereas it's, I guess it's.
[00:19:43] Speaker A: Functionally not true because all of the recreational flow is on the take side, of course. So there's only one price sensitive side. But in some. In a more theoretically optimal state. I believe I am right. But can you have to sit down.
[00:19:56] Speaker C: Look, you're in, you're in theory land. Come back.
[00:19:58] Speaker A: I would not. I'm big time in theory land if.
[00:20:01] Speaker B: We'Re talking about fiso. So like. Yeah, let's say.
[00:20:02] Speaker A: But I think. Sorry, the only reason Etherealand matters is because I think equilibrium approaches Theory land. Right. And we'll get into that in a second.
[00:20:10] Speaker B: But. All right, okay, so let's say you're on the platform. You do 100 million of volume, you make 1 million profit on Kalshi. Right. The total fees that Kalshi is going to take between maker and taker side on that is I should have figured out exactly what it's either three and a half million or seven million dollars. I forget which one in terms of what the maker and taker is making. So it's like we're already talking about a rev split between the winning player and Kalshi. Like Kalshi is already getting such a large percentage of that Rev share.
You know, I was optional.
[00:20:44] Speaker C: You don't think they're gonna increase fees?
[00:20:46] Speaker B: Well, I don't know but I would say that like the fees should. If we're going theory land, the fees should come down. Because if all these other entrants are trying to come in with the CFTC licenses and they're seeing Kalshi is just printing like, I don't know, price on like 50 million in fees a week while taking no risk of their own and you know, not having the most impressive platform out there, someone's going to come in and they're going to be willing to take 25 million a week of fees in that situation. So I think that, I mean, Kalshi is certainly enjoying a monopoly on the situation right now.
I mean, obviously the fee situation, it just depends on the overall market. So I mean, Polymarket USA has 0% fees, but to me there are 0.01% fees. But in my mind they're an irrelevant platform right now. They're app only. You can only do make orders if you're an institutional trader. They only have money lines.
It's really bad. So, I mean, if these competitors get better, then that's going to put downward pressure on Kalshi's fees.
Probably. But also if they feel that. Yeah, well, yeah, they feel that, oh, there's all these people on the platform who are making X amount of dollars and I can squeeze them for a little bit more, then do you think.
[00:22:07] Speaker A: It'S possible that the end game is. So let me back up. FanDuel and DraftKings currently are built on the CME, which is a super high barrier to entry to come in as a maker. And there's no make feature. You just talked about Polymarket currently only offering to institutions.
There is good reason why the exchanges and maybe we can go into why would only want institutional makers at every level. And again, in theory it's not supposed to be that way. It's supposed to be equal access. But in practice you can functionally enforce it.
Do you think there's a chance that that model wins out and we look back and you go, wasn't it crazy when just anybody could plug into the open API and make. And now there's like tons of upfront costs to even have permission to do it.
[00:22:56] Speaker B: Yeah, I mean, that's certainly possible. I think for me personally thinking of a situation like that, you know, I would hope that there is a platform that rises up that would have lower take fees. So I would just switch to going against the institutions rather than making or rather than trying to get make orders. I think that especially on Kalshi, these institutions don't face nearly as much challenge as they should because I mean, sharp customers can't take their orders unless they believe that they've got a like 4% plus edge against that. And I mean, if we're talking, if we're talking like a liquid NFL money line market, for example, it is completely irrational to ever do a take order on an NFL moneyline unless you're like jamming injury news or something like that.
[00:23:49] Speaker C: I got a big take.
There was no Internet. It was just Steamed like massive and somewhat slow. And I was crazy. It was like my first take on an NFL in a while.
[00:23:58] Speaker B: But I mean in general it's very.
[00:23:59] Speaker A: I'm not taking Broncos right now at any price.
Well, Broncos are we big time Stidham heads right now.
[00:24:06] Speaker B: Broncos country.
[00:24:06] Speaker A: Am I leaking edge right now?
[00:24:08] Speaker C: You're leaking too much.
Broncos will close as an arb. When you see this, you can get them at plus like 205 as a take right now. It will close as an arm to that.
[00:24:19] Speaker B: I hope you're right. I hope you're right.
[00:24:20] Speaker A: I think all three of us are drowning in Broncos positions right now. Right?
[00:24:24] Speaker B: Yeah.
Let's ride.
[00:24:28] Speaker A: But I want to ask you more about equilibrium because I, I think of you as being one of the top, like guys who sees where this guy who sees where this is going from a ground level view.
[00:24:42] Speaker B: Right.
[00:24:42] Speaker A: Like, I think it's rare for somebody to have some vision about what's going to happen but, but also be in the streets battling every day. So if you could just make up a story about kind of where you think equilibrium is going to settle in the next one, two, three years.
[00:24:58] Speaker B: Yeah, I mean, I do think that we are going to settle into a lower fee environment on prediction markets, which I am excited for if that happens. Just because I think that, you know, Kalshi has these huge advantages over the regulated sportsbooks from a tax perspective that it's just like you could maybe you see, maybe you see like a third, fourth level sports betting operator decide that like, hey, actually I'd be better off if I transitioned into this model. I think you're seeing the FanDuel and the DraftKings now. Like, they obviously have a lot of great stuff going on in the regulated sportsbook market. So that's why they're opening in the states that they're not regulated in to try and not screw up that side of the business. But I can see a world where it's worth it for someone who's below the FanDuel and DraftKings level to just say, I actually would rather try and take market share.
[00:25:56] Speaker C: So I got to disagree with you.
[00:25:58] Speaker B: A little bit here.
[00:25:59] Speaker C: I don't mean to bash ourselves or anything, but you already said that you prefer using Kalshi over Anova at the current moment.
Nobody has no fees.
Why wouldn't you use us? We have no fees. I mean, the obvious answer is the retail flow on Kalshi is unbeatable and you're willing to pay those high fees. So at the end of the day, should you not only care, only care about the retail flow, you don't really care what the fees are.
[00:26:23] Speaker B: Yeah, I mean, that's true in general, but if you can get the retail flow plus the lower fees, then you've got yourself a really nice environment.
[00:26:30] Speaker A: The question is whether or not I.
[00:26:33] Speaker B: Don'T see the retail flow going away from Kalshi at this point. Like, I think they've built. I mean, they have built like an insane network of people who are just like big fans of the platform because they can open up their Robinhood account and invest there.
[00:26:45] Speaker A: I wonder what percentage of them are aware that they're using Kalshi.
[00:26:50] Speaker B: I have no idea. Yeah, I mean, I've never interacted with it through Robinhood, but there's spend money.
[00:26:54] Speaker A: On marketing to change the.
[00:26:56] Speaker B: Well, so think of it this way too. Robinhood now is looking at it like, look at all this value that we're providing to Kalshi, relative fees. Obviously, I don't know what deal specifically, specifically Robinhood and Kalshi have together, but Robinhood's going to look at it.
There was that announcement that they were partnering with SIG to have a prediction market a couple of months ago. I don't know what actually came of that, but Robinhood's going to have a little bit of pull in this situation too, to say, hey, retail flow is what the big value of the product is and we're the big drivers of that.
Do they decide they want to cut Kalshi out of it because they think that they provide more value?
Who knows? I mean, there's like. I just think in general, the amount of fees that Kalshi is collecting is just way too high relative to what their risk is and what they're providing to the market that I think that other entrants are going to be able to come in and beat that.
[00:27:49] Speaker A: Have you
[email protected] and or Underdog at all in the way that I haven't.
[00:27:54] Speaker B: Even looked at those.
[00:27:55] Speaker A: I think that's interesting because Underdog doesn't have the broker license. My understanding, they don't have the broker license that Robinhood does, but they have this service provider arrangement.
And I think we haven't scratched the surface of the number of different ways that businesses that own a lot of customers or are good at acquiring customers could drive that flow into backend exchanges.
And like you said, as the pie grows, more and more companies, you know, like, like Coinbase for instance, is just kind of said prediction markets like they haven't done anything with it. But there's a lot of money sitting in Coinbase accounts, and there's a lot of models by which Coinbase could sit on top of another exchange. And so that. Yeah, how does everybody structure those deals?
[00:28:46] Speaker C: I'm going to ask a really hypothetical question that I think will happen, though. I think we're going to see this get to the Supreme Court at some point. I think that Kalshi's even admitted that they think this is likely going happen.
What would you say the odds that this wins the Supreme. You can't offer sports contracts.
[00:29:03] Speaker B: That's. I mean, that's the end game, legally. Yeah. I mean, I don't have any special knowledge to speculate on that, but I mean, yeah, if you take a step back and look at this from a societal view, like, we've went from like, okay, let's have the regulated sportsbook model, but then the states got too overzealous in what they've done to the providers, which is then trying to have people find loopholes to it. You do the sweepstakes, do the prediction markets, et cetera. So, I mean, obviously all this stuff popping up isn't really what probably the intention was of regulators at the time. So, yeah, I mean, you could very easily. I think that's another good reason to really focus as much as you can right now, because, yeah, there's a reasonable chance that this is all illegal. And Two years.
And then what would you do at.
[00:29:53] Speaker C: That point, if you think.
[00:29:54] Speaker B: I mean, I'm hoping that I was successful enough at that point that I'm not as worried about it, but, yeah, I mean, I'm not gonna be retired in two years. I'm not. Well, I never would be. I never want to stop working entirely. Like, this is this. I mean, this is also just, like, super fun for me.
I mean, this is, like, pretty close to a dream career in my eyes of, like, I just sit at home on my computer and I make spreadsheets about sports, and then I bet on sports, and then sometimes I watch the sports. You predict those sports? Well, it depends. Depends what? Depends what?
[00:30:28] Speaker A: Do you watch sports and care and sweat bets?
[00:30:32] Speaker B: I do sometimes. I probably do less now than I used to.
[00:30:36] Speaker A: What was the last thing that, like, you were legitimately yelling at the tv?
[00:30:40] Speaker B: I bet a lot of ufc and there is some nasty situations there, though. Like, I had.
I'm not a superstitious person, but I really had this stretch where it was like, every time I watched a fight, I lost and every time I didn't watch the fight, I Won. I was like, I'm done watching. I can't watch this anymore. And then recently I decided to start watching again. Now I want a nice run. So it's like, all right, I'm watching the card this weekend. I'll put in my hot take right now. Patty Pimblett at minus 220 is a great wager.
And the main one, that's what people think is the square side. I disagree.
[00:31:15] Speaker C: When is this fight going off?
[00:31:17] Speaker B: Saturday night.
[00:31:18] Speaker A: Here all.
[00:31:19] Speaker B: Yeah, everything. Everything's Saturday.
That's my hot take.
That's my hot take.
[00:31:24] Speaker A: No, no.
[00:31:24] Speaker C: I didn't know if it was like, three weeks from now.
[00:31:26] Speaker A: Let's post an ARB on that.
[00:31:27] Speaker C: I will.
[00:31:28] Speaker A: Let's do it.
[00:31:28] Speaker C: We're gonna take a few.
[00:31:29] Speaker A: Let's get incredibly throttled on it.
[00:31:31] Speaker B: Let's do it. Yeah.
[00:31:33] Speaker A: All right. You got anything else you want to ask?
[00:31:35] Speaker C: I do. I want to. What's your most memorable prediction market only trade?
[00:31:43] Speaker B: Prediction market only. I mean, I think that the.
[00:31:48] Speaker C: I'll lump sweeps into it as well.
[00:31:50] Speaker B: I mean, okay, the sweeps one is the Isaiah Collier trade.
[00:31:53] Speaker A: Okay, got it.
[00:31:53] Speaker B: I got. It's pretty good. But I mean, I think the. Yeah, I mean, it's just like, it's overall, the absurdity of just everything that I've done in the past couple years with the sweeps and the predictions. I mean, I think the prediction markets, it's not like you're really exploiting any specific edges that much on prediction markets.
It's relatively basic markets that we're talking about at this point.
Almost all the volume is coming in on mainline size, and a lot of it is live markets. So there's not anything super exciting going on there. But you got to find your opportunities. Now. I do have a lot of opinions on the combo side of things and where that's going to go. Tell me how we got to talk combo. So, yeah, at the very beginning of my sports betting career, I pretty much made all my money off of same game parlays.
That was like most of what I was doing. And what was great about it at the time is nobody knew that a same game parlay could be sharp in terms of the books, the traders. So this concept of priming an account, seasoning an account didn't exist. It literally is just open an account and I just fire on same game parlays, like. And I do that from start to finish of the account. So that was great. But you see now on the domestic books, the books are just really scared ever since, like, Draymond Green Type incidents.
[00:33:23] Speaker A: Guys who play for one minute. Yeah, right.
[00:33:26] Speaker B: So you, you just can't bet unders in a same game parlay for a scale anymore.
And then like there was a change this year with DraftKings where I mean, I think it's fair to say if you're betting a same game parlay, it's a lot easier to find a two leg same game parlay that is good than it is to find a 10 leg same game parlay that's good. So you know, it's often just one.
[00:33:49] Speaker A: Leg that's good and then another dummy leg.
[00:33:52] Speaker B: Yeah, one leg. That's good correlation stuff. Whatever you can find lots of opportunities. But so the previous way that pretty much every sportsbook would price this is they would look at whatever the odds were and they would apply a correlation factor. But then you could bet overs and unders. So if you would actually map it out what they were pricing, the over, over, over, under, et cetera, that hold would be pretty much the same as if you were just betting a two legged parlay. Eight percent, obviously that's high hold to bet into, but not unbeatable. But now you see these sportsbooks saying I don't want any 8% hold parlays. So they're just adding in like after the fact now, like I don't care how many parlays you did, we're putting in 20% hold. So that like that's what DraftKings is doing right now. If you just add a second leg, it doesn't matter, it's 20% hold and you can't bet the under. So it's like you're now like the rec customer is just getting absolutely fleeced right now on DraftKings, which is unfortunate. And I think, I mean some of that probably has to do with taxation, but I think some of it also has to do with them being overly conservative in like trying to thwart people like me. I mean I'm biased in saying that. I wish that they wouldn't as much.
[00:35:08] Speaker A: The piece of it is like an alternative approach you can take is to be way quicker to limit. And DraftKings has this approach of like if somebody is acting like a whale, a lot of times they're pretending, but we want to give them the chance to fire 10k at a time and possibly be an honest to God whale.
[00:35:24] Speaker B: Yeah.
[00:35:25] Speaker A: And before we finally say no, we got buried and cut them off.
[00:35:27] Speaker B: Right.
[00:35:28] Speaker A: And so that's a very expensive process. They have to try and find those customers who are going to be seven figure losers and so this is like, you got to make it up somewhere, right?
Like, nothing is free, people. I don't want to get limited. I don't want to pay high vigs.
Sportsbooks and PMs are not ATMs. Like somewhere they're going to have to get you.
[00:35:48] Speaker B: Right? Yeah, exactly. So that's why transitioning. Like, I'm very bullish on combos in general, on the prediction markets.
Yeah. Parlays have been rebranded. I love the tweet with Mr. Peanutbutter and SP talking about their merchandise.
I'd like to purchase one of those hats if I could.
[00:36:07] Speaker C: All right, and I'll ask you another long term hypothetical question.
We just talked about the hold on. These regulated sportsbooks are like 20% minimum. And as you get to 10 legs, it's like 80%.
What do you think the long term hold for like an average, say, three legger or three to four leg parlay? Sorry, combo.
[00:36:30] Speaker B: Yeah, we don't bet.
[00:36:30] Speaker C: Parlays will be in like three years down the line, assuming everything works out. It's legal still.
[00:36:36] Speaker B: Yeah. So, I mean, this is like a great question in my eyes and it's something I've been thinking about a lot. I think that, like. So, okay, right now, let's just say everybody has a basic strategy of like, I'm going to copy the FanDuel line and I'm going to book that as a combo on. On Kalshi. So then what's the next step? Okay, well, person B comes into the market, they're like, wow, the people are just collecting all this vegan.
[00:37:00] Speaker C: Yeah, right.
[00:37:01] Speaker B: So it's going to be. So the question is, how many penny jumps happen until we stop?
[00:37:06] Speaker A: Is it really 20% vague or is it 19%?
[00:37:08] Speaker C: Right. And if you penny jump too hard, then you get yes.
[00:37:11] Speaker B: And that's why I'm so excited about combos. It's like, I feel like no matter what happens, I'm going to be able to find a way to earn off those because either everybody is just doing really high hold stuff and then, okay, you need to figure out how to be on the fake side of that. And, you know, as the competition continues. And yeah, someone says, all right, FanDuel's willing to take 15, 20% hold on these. I'm going down to like 7% hold or whatever. Now I have the environment that I used to have with probably even more, even higher limits than I used to have and no worry of being limited anymore. So, yeah, I mean, the equilibrium is going to be whatever keeps makers profitable. So that, like, Sharps don't take more from them than the rec flow is, which I think is, I don't know, maybe in the, like, probably in like 8% hold range, maybe.
So, like. Yeah, it's just.
I think that that's great. And I mean, that actually, I will say is a great product for.
Well, I won't say that it is now, but that can be a great product for the recreational customer. Because if the average recreational customer is going on DraftKings right now, clicking their five legs that they like for this NFL game tonight and paying 40% hold, but now they can do that on Kalsheet, and because of all this competition for that rec flow, they're getting 10% hold.
I mean, that's. That's great news for the recreational.
[00:38:36] Speaker C: This is a question from Louis, by the way. Stole from him. He asked me, I said 6%. So we're very aligned. Very aligned.
[00:38:42] Speaker A: The one thing I would push back on is the assumption in that you will never get limited on prediction markets doing this.
I'm not convinced.
[00:38:51] Speaker B: Well, explain further. Explain further.
[00:38:54] Speaker A: What are you laughing about?
[00:38:54] Speaker C: I know you're. I just want to.
[00:38:56] Speaker B: You got to explain. Are we going to need Kalshy beards in a year?
[00:39:00] Speaker A: I think it's more realistic than people think.
I think. I mean, for instance, like we just talked about, you know, you can't make on DraftKings and FanDuel on their prediction market products. So, like, that's one way, unless you're a CME authorized entity, which that's functionally shutting everybody out.
[00:39:21] Speaker B: Right, Right.
[00:39:24] Speaker A: There are a lot of backdoor mechanisms to limiting people. You know what I mean? Even the fact that you're serving customers on Robinhood and Kalshi and they paid different fees, it's not crazy to think that all the flow through Kalshi and Robinhood will be tagged in different ways and that any Kalsha user is getting way worse limits and way worse prices than any Robinhood user because of whatever. But on Robinhood, you can't win with the fees or whatever, and Robinhood is the authority to kick you off if you're winning. And they're not actually the exchange. So it's not the exchange limiting you, it's the broker. There's a lot of work.
[00:40:02] Speaker B: Yeah.
[00:40:03] Speaker A: I mean, come on.
Two years ago, you would have said, none of what anybody's doing right now passes muster.
[00:40:09] Speaker B: Right.
[00:40:09] Speaker A: But if you can do it, if you figure out some legal framework that makes sense and muddy the water, and I'm not convinced which is why I think it, what I would say to be more optimistic is I think your serious sports predictors and whatnot should be concerned with promoting and aggrandizing the platforms that really are fair and should be, should be critical of the ones that are not and should not just take it all for granted that this is going to work in their favor interminably. I think there's a real risk that it does not go that way.
[00:40:52] Speaker B: Yeah, I mean it's going to depend on well, Kalshu's incentive is just to get as much volume as possible on the platform. So it's going to depend on whether they believe that having those types of ways to limit players would get them more volume overall. I mean in general, like as, as it stands right now, Kalshee is going to love a sharp player because all they're doing on combos is they're taking a 5% fee, which this is actually not transparent at all to the customer there. Right now it's just a 5% fee on top of the taker. However many dollars you risked on the combo, they're adding 5% and that's their fee.
[00:41:29] Speaker A: But ultimately like for instance they could more and more be focusing on the non sports markets and just whatever their MMS and brokers are saying they should do on sports, they say fine, that's how it works. And if people complain who care, these are not the customers we want. This isn't the direction of the company.
[00:41:44] Speaker C: Also, just to further back up Henry's point, like you talked about it like a 1 million profit, the Rev share for a sharp customer in Kalshi is great. In Kalshi's favorite but as hopefully the novigs of the world come into the market and FanDuel predicts and DraftKings predicts get better and better and that fee does lower, I think you actually, I do agree with you. I give you pushback but I do agree with you happens that rev share split will increase in your favor and in which case now it's not okay that you're making 3 million and the exchange is making 1 million.
[00:42:17] Speaker B: Why is that?
[00:42:18] Speaker C: Right.
They want that money to go in and that's where you get limited and.
[00:42:22] Speaker A: That'S where well presumably he's not making 3 million because at the same time it's getting more efficient.
[00:42:26] Speaker B: Right.
[00:42:27] Speaker A: His margins are getting driven down to zero. Fair. The recreational customer is losing less.
It's, it's better. It's like, you know, it's fair. That's the dream. Yeah, let's not lose sight of the dream guys and our rest.
[00:42:40] Speaker B: I mean, I'm very. I'm very eager to see what. What the future novig product looks like.
[00:42:44] Speaker A: We'll.
[00:42:44] Speaker B: We'll see if that. If that becomes a larger part of my future plans.
[00:42:48] Speaker A: I hope so. I think, you know, we've. We've seen. I mean, we've been through these iterations where it's like, whatever is going on, people get so dialed in on it. There was a time when exchanges were a joke, and then it's like, oh, well, obviously, this is taking over everything that just happened like that, with nobody being like, oh, I remember when we all thought this was never going to work. So not too worried about it.
[00:43:07] Speaker B: All right.
[00:43:08] Speaker C: Thank you, Maple.
[00:43:09] Speaker A: Maple, thanks for coming by.
[00:43:10] Speaker B: Thank you.
[00:43:10] Speaker A: Peace.
[00:43:11] Speaker B: Predicting.
[00:43:11] Speaker A: Predictable.
[00:43:12] Speaker B: Prediction signal, predictable.
