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 | "She appears to be in a universe where everyone has hot dogs instead of fingers." |
Thursday links: Many possible worlds
A new study estimates that legalizing sports betting in just nine states left an additional 284,000 households struggling to afford enough food.
Working-age adults without a college degree were hit the hardest. Among active bettors in that cohort, food security declined by 10.5%.
The news isn’t all bad, though. While sports gambling was found to harm mental health for men in their early 30s, it seems to improve it for men aged 18 to 24. The researchers attribute this to the "benefits of entertainment and gambling-related social connections" among a demographic that is still "likely to be financially supported by their parents."
For those with parents too unreasonable to pay off their gambling debts, the study cites one possible intervention: the Massachusetts voluntary self-exclusion program allows people to legally bar themselves from gambling for a set period of time (one year to forever).
Enrollment prevents you from making a bet with any Massachusetts-licensed sports book.
You’ll still be free to make predictions, though. Including on sports.
Inspired by Matt Levine, someone’s created an index that averages the implied probabilities of Polymarket’s largest event contracts. The result is a "snapshot of the market portfolio of probabilities."
Which means you can now say “Things are more likely to happen today.”
Or less likely. Or about the same.
Fun.
To make a point about prediction markets, a journalist explains his plan to manipulate the reviews on Rotten Tomatoes.
I include it here mostly to highlight one amazing aside: “Five years ago, Badger left his job working in pharma regulation to bet on prediction markets full time; since then, he has become one of the top traders of Rotten Tomatoes reviews.”
Trader of Rotten Tomatoes reviews!
Add that to the list of “new service sector jobs” Tyler Cowen has been assembling.
A research note by Alex Woodard details the incredible trade Galaxy lucked into by paying $65 million for a distressed bitcoin miner in January 2023. Just a few weeks later, ChatGPT hit 100 million users and the AI mania was off to the races.
In late 2024, Galaxy Digital shut down its bitcoin mining hosting business to pivot to AI. A few months later, it leased the facility to CoreWeave.
Now, “Galaxy guides to average annual revenue of more than $1 billion over 15 years, at roughly 90% lease-level EBITDA margins.”
Nice work if you can get it. Even by accident.
Bloomberg reports that China is cracking down on the popular but unsanctioned offshore brokerages its residents use to buy US stocks.
Perhaps relatedly, perpetual futures tracking the price of Micron shares traded nearly $1 billion of volume on Hyperliquid’s Trade.xyz after the company’s blowout results last night.
Venture capitalist Sam Lessin argues that “the real lesson of the SpaceX IPO is that alternative stories of value can now scale to previously impossible size.”
In his view, the valuation of SpaceX has more in common with Redditors buying GameStop than Warren Buffett buying Berkshire Hathaway.
He thinks this is the new normal.
“The next era is a capitalist multiverse: people holding assets not only for cash flows, but for identity, story, optionality, sovereignty, and the chance — however irrational it may look from the outside — of participating in the swerve to infinity.”
He might be overreacting. Aswath Damodaran, the high-priest of fundamental valuation, values SpaceX at $1.3 trillion, which isn’t that far below its market capitalization of $2 trillion.
Still, I hope Lessin is right, because multiverse investing sounds highly entertaining.
Simon van Zuylen-Wood reports that the Sam Bankman-Fried who's incarcerated in our timeline rests easy knowing that Sam Bankman-Frieds in other timelines are faring much better.
There’s “the Sam who never got into crypto in the first place” and “the Sam who had gone into journalism.” And, “of course, there was me — the Sam from the universe we happen to live in — wearing an ankle monitor.” He writes, “All those Sams are me, and I am all of them. Butterflies flapped their wings, and I branched out through the multiverse, but it’s still the same me. But whereas some Sams got the benefit of the doubt every single time, even when they didn’t deserve it, this Sam wasn’t ever getting it, even when he had proof.”
It’s an excellent way to look at things, I think, especially now.
If you get blown up in this new multiverse of investing, take solace knowing there’s a timeline in which you didn’t.
Softbank’s slide decks are rarely illuminating but always memorable. The one released this morning will be remembered for its goose motif.
For years, Masayoshi Son has argued that Softbank shares should trade at a premium to NAV — a “goose premium” to account for Son’s investing savvy.
Despite the creative presentations, investors have generally been skeptical. “SoftBank is currently valued less than the sum of its golden eggs,” he complained in 2014.
It still is. The slide deck shows Softbank shares trading at about 50% of NAV.
Gaming platform Doppel Games has created a new category of entertainment: AI-agent competitions made possible by a fun mashup of crypto, LLMs, and prediction markets.
Doppel Agents are LLMs trained to emulate public personalities that compete in livestreamed matches recorded onchain. Every agent uses the same underlying model but is trained on the social media footprint of a different celebrity. Spectators can bet on the outcome on Base, the layer-2 blockchain.
The first category of game is Texas Hold’em. Cardi B recently bested the Wendy’s girl, for example. Upcoming matches include Barack Obama vs Kim Kardashian and Mr. Beast vs Christiano Ronaldo.
Prediction markets currently favor Kardashian and Mr. Beast.
I don’t enjoy watching poker enough to tune in for those. But poker may be just the start.
Abraham Lincoln could face off against Niccolò Machiavelli in Settlers of Catan, for example. Napoleon Bonaparte could play Julius Caesar in Civ VI (with Napoleon playing as Caesar and Caesar as Napoleon). Sun Tzu could play Churchill in a game of Risk.
That I would watch.
Especially if I could bet on it.
— Byron Gilliam
