Things Luana Says on Podcasts

I actually would say it's a very good thing that it happened like so fast because, in a lot of ways, we keep the mentality of very, very early stage, right? And I think it's like when companies, I think they're just like compounding at a kind of like very normal rate. I think it's easier to kind of start thinking, like, oh, I'm a bigger company, I need to hire more people. And you kind of like, you don't realize like you can start making a lot of mistakes and it take a long time for you to realize you're making that many mistakes. For us, because we grew so fast, we also our mentality and our kind of like way that we look at the company hasn't changed as fast. So, because of that, we're able to, for example, have and operate with way fewer people. We just had to like really keep going on like building the product as fast as we could. Early stage team and early stage mentality, very intense in time of like work intensity, keeping the speed, which I think is the most important thing for startups is the speed. You're definitely right that sometimes we'll look at the numbers and like two years ago, like before the election, we were making like way less than $10 million a year, right? Now, in a day, we transact way, way more than we used to do in a year, like two years ago, you know, and it's just like just the transaction volume. And it is crazy, like the numbers we're talking about. And we're very grateful for where we are. But we really, really try to keep the mentality on we're still underdogs. Everyone have a lot to prove it to grow.

I mean, the success you've had has put a bullseye on your back. There, states are coming after you, you know, for being an unlicensed gambling operation. Federal appeals court just ruled that Ohio and Tennessee can regulate Calci through their gambling laws. Like, is that kind of an existential threat? I mean, New York alone is suing you for $36 billion, the state where you're headquartered.

Something like 75% of the volume of your business is sports. And for some users' point of view, it can seem like it sort of serves the same function for them. And, you know, the draft kings and fandals of the world look at you as competition, even if the engine behind operates in a different way.

Well, the thing is, speculation happens in all financial markets. You know, crypto, stocks, options, futures, there's speculation in all of them. And speculation is actually very important because it drives liquidity, right? If you obviously every market that we're talking about, and it's actually one of the biggest growing parts of Cal Shi right now, is the hedging and kind of small business hedging. And hedging is very important for financial markets. And it is a differentiator from gambling. But speculation is very important. And it happens in every market. And it should happen. And it's fine. There's nothing wrong with speculation, but the mechanics being different really matters. You know, the house always wins. Like, that's not the case of an exchange. And on the DraftKings defendable point, it's actually interesting because Jason, CEO of DraftKings, actually, in their latest earnings, said that they're seeing no cannibalization between sports betting and prediction markets because they are fundamentally different. Users understand they're different and they engage with them in a different way. And because that I think both models can coexist, they are coexisting. And at the end of the day, the users will pick what's best for them. But it's not the same. And I think the users kind of know that.

You mentioned hedging. I did love during the Knicks NBA championship run, there was a bar here in New York that used Cauchy as a hedge so it could offer free drinks to everyone if the Knicks won. And these are great counterpoints to all the betting talk. Do you look for those opportunities to tell those kinds of stories?

No, that's a good question. Because we're federally regulated, we don't allow markets on war, terrorism, assassination, and any of that. The reason we decided to extend market, same thing with the Maduro, is that actually there are a lot of different ways that a person can be out of power, right? And an example is Maduro, for example. He wasn't assassinated or anything like that. And you could see like the impact, the clear economic impact that had, for example, in like price of oil. So what we do for these markets is actually we let that market operate. But what we do is if there is an assassination or a terrorism or a case or something like that, what we do is we void every trade. So no one can profit from it. And we kind of like, that's kind of how we draw, we drew the line in this case. I think that the reason we did the reimbursement was actually not because we thought there was anything wrong, but I think that we didn't do a good enough job in the product to explain to users how that voiding would work. And I think that that's what got confused. Now, after this market, we actually have been way more selective with the markets that we list.

I've seen some Federal Reserve studies that say that prediction markets are more accurate than almost any forecasting method. When money's on the line, people are incentivized to tell the truth in a different way. Like, why do they work?

Prediction accuracy in the high 90s is pretty darn good. One of the benefits of deploying market dynamics. So, what does Calci reveal about the upcoming U.S. midterm elections? And what about Timothy Chalamet's strange dentist chair ad for Calci? We'll talk about that and more after the break. Stay with us.

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Before the break, Kalchi's Luana Lopes Lara talked about what makes prediction markets better and broader than sports betting. Now she talks about election predictions as we near the midterm, plus insider trading surveillance, how Calci is like ballet, and Timothy Chalamet's strange dentist chair ad. Let's jump back in. Election polling has become kind of unreliable. What does Calci's current data say about the midterms? Is that 70% accuracy? Or like at what point does it start to move toward 90%?