Juicy

Zionist Dem leader Gavin Newsom struggles to speak after podcast host brings up AIPAC. He repeats “it’s interesting” 10x and claims nobody has brought up the foreign influence operation in years 4x while failing to say anything more when asked.

On sports hedging. The sports insurance and re-insurance industry is big: the annual market is around $9 billion and is projected to double by 2030. There are a variety of insurance products including brand sponsorships, game cancellations, team/player performance, off player compensation, and more. We just announced a partnership with sports insurance broker Game Point Capital. Game point capital issues hundreds of millions in sports insurance per year. Their most popular product is team and player performance bonus insurance: sports teams often structure large payouts to coaches and players that get triggered if they achieve certain milestones (winning championship, making the playoffs, scoring records, etc.). The bill is often large and teams smooth out their finances by hedging it. Game Point hedged for two different teams against performance bonuses on basketball with Kalshi last week: 1. One is a hedge for a bonus if the team makes the post-season (Kalshi price=6%, OTC price ~ 12-13%) 2. One is a hedge for a bonus if the team advances to the second round (price= 2%, OTC price ~7-8%). Why did they do this on Kalshi? Insurers like Game Point need to offload the risk they take on somewhere else. Typically, they go to traditional re-insurance companies like Lloyd's of London, which is Over-the-counter (OTC): you negotiate price and terms 1:1 with them (instead of an open/competitive market). Like in all OTC markets, the issue is the re-insurers are restrictive in what risks they take: they like to avoid volatile, higher risk contracts, so they offer prices that are opaque and prohibitively high. Exchanges are a better alternative because they expand liquidity and bring competition: multiple counterparties compete in an open marketplace to improve the price. Exchanges are harder to build than OTC because they need to have enough liquidity. Over the past year, we’ve massively increased the liquidity on our sports markets. During the Super Bowl, Kalshi could have processed a $22 million trade without moving the price meaningfully. At this level of liquidity, Kalshi is now very attractive for Game Point and other similar companies: there’s more liquidity available, it's cheaper, and the price is more transparent. We expect to process tens of millions in similar hedges from Game Point alone in the coming months. Onwards.

The NBA has fined the Utah Jazz $500,000 and the Indiana Pacers $100,000 related to the management of their rosters for recent games.