$500M Bet On The Iran Strike — Before It Happened | Prof G Markets

Today's number 50. That is the percentage of Gen Zers who say that beverages are part of their personality.

In other words, we now know the real reason young people aren't having sex.

Welcome to Profy Markets. I'm Edson. It

is March 5th. Let's check in on yesterday's market vitals. The major

indices climbed as investor attention shifted state side. A report showed robust services sector growth for February. ADP private jobs data came in

February. ADP private jobs data came in better than expected and a tech rally gave the NASDAQ an extra boost.

Meanwhile, the 10-year remained elevated and oil prices were flat on the day.

Okay, what else is happening?

Prediction markets are under intense scrutiny after half a billion dollars in trades tied to the US strikes on Iran came to light. Bloomberg reported $529

million was traded on Poly Market alone on the timing of the strikes. One

account made more than half a million with the first trade placed just an hour before the news broke publicly.

Meanwhile, Poly Market's competitor Kelshi saw nearly $55 million in trade volume on whether Ayatollah Hami would be ousted. However, it halted those

be ousted. However, it halted those markets shortly after he was killed, saying that it doesn't allow markets tied directly to death. Now, Democratic

Senator Chris Murphy says he will introduce legislation, quote, ASAP, to stop people with ties to Trump from profiting off of these wars. Here to

help us break down what comes next in prediction markets, we are speaking with Jonathan Cohen, policy lead at the Institute for Boys and Men and author of

Losing Big, America's Reckless Bet on Sports Gambling. Jonathan, good to see

Sports Gambling. Jonathan, good to see you. I know you usually talk about uh

you. I know you usually talk about uh sports betting and you've written a book about it, which has been massively informative to many of us. Now we're on

to the next phase here where people are betting and gambling on war and potentially death and it's creating all of these issues and all of these rifts.

Cali is saying, "No, we don't let you bet on people dying or not dying. That's

its own conversation." Let's just start with your initial reactions to the fact that we're here uh and and what this means in your view for markets going forward.

>> Well, I don't know what the I don't know what the problem is. I'm just trying to make a little bit of money, Ed. You

know, I got kids at home. You know, I'm obviously I'm going to start try to gamble with all my insider information on the death of Ayatollo Committee. I

don't know what what the problem could be. I I mean, really, this speaks to I

be. I I mean, really, this speaks to I mean, when when the Supreme Court legalized sports gambling in 2018, right? Surely we did not anticipate what

right? Surely we did not anticipate what we now have, right? Which is the basically the gamblification of everything. And this is sort of what KI

everything. And this is sort of what KI has been promising and what they their market is based on is you can leverage your knowledge of Taylor Swift, of gas prices, of the temperature, of sports to

making money. And the logical extreme of

making money. And the logical extreme of this is when there are wars, people are going to want to gamble on wars as sick and twisted and weird and sort of undemocratic as as that might feel.

>> So where do we draw the line here? Um

because I mean Kelchi is saying that they're not I mean it's hard for Kelsey to draw lines in the first place and in fact we spoke with the CEO of Kelshi and we tried to have a conversation about this and it would you know it is a

difficult thing to to figure out but they have drawn a line at death it seems why is that necessarily the line is it

because that is illegal or because that's just an arena they don't want to touch >> I think it's a little bit of both again koshi As a reminder, the reason it's able to exist is that it claims to be an

investment platform and it is regulated as an investment platform rather than a gambling platform. So, they really don't

gambling platform. So, they really don't want to do anything that might upset that status and their sort of legitimacy or what they see as sort of the social value they are providing which is elevating the wisdom of the crowds on

issues. So I do believe there are some

issues. So I do believe there are some legal restrictions related specifically to markets on death and maybe they see it as just a bridge too far sort of morally to sort of keep their good

standing as a good citizen. Whether or

not they phrased, you know, this all comes down to um Kani out as Iran leader and out apparently did not include death, which is why all these retail traders are super upset. But

fundamentally it boils down to a lot of people not reading the fine print and thinking that this market that let them do sort of do whatever they want actually does have some sort of rules specifically when it comes to death.

What is your view on gambling versus investing versus trading? This is

becoming more and more like the conversation when it comes to prediction markets which in my view are going to become a part of how we talk about

markets in the future. I mean this is becoming integrated into everything we do. I I genuinely use prediction markets

do. I I genuinely use prediction markets data to understand the future and to report on the news. How do you draw the distinctions between gambling, investing, and trading?

>> I mean, it's always been a thin line, right? Like why is buying a soybean

right? Like why is buying a soybean future? Why is that investing but

future? Why is that investing but betting on the Philadelphia Eagles is is gambling? To me, it boils down to some

gambling? To me, it boils down to some secondary utility from the money that you place into the product. So if I buy a stock in Apple, you know, the value of Apple goes up. They can make more

iPhones. They can make better phones and

iPhones. They can make better phones and so on. But when I buy an event contract

so on. But when I buy an event contract on the New England Patriots to win the Super Bowl, first of all, I lose money.

Second of all, the New England Patriots are not more likely to win the Super Bowl because I have bought an event contract on them. And there is no I don't see any sort of social benefit for the rest of the country or the rest of

the world to know that a 35-year-old dad in central Connecticut thinks that the New England Patriots are going to win the Super Bowl. So when there's some genuine social utility beyond just wisdom of the crowds, which I do not see

as sort of actually beneficial in in a real way, then I'm willing to call something investing. But when it's just

something investing. But when it's just about my entertainment or my attempt to make money, that to me is just gambling pure and simple. And so much of what prediction markets do to me is clearly just gambling.

>> If there is a social utility to let's say I mean we're talking about war here, there is an argument to be made that if we want to understand how to how to plan

for the future um how to plan for potentially life-threatening events, then maybe it is helpful to have markets that give us some insight into that.

Would that fit your view of some level of social utility that makes it something different from betting on say a sports game?

>> Maybe I'm I'm sympathetic, but let me sort of give you the opposite version.

Maybe the worst case scenario in all this. Let's say the opposition leader in

this. Let's say the opposition leader in Bangladesh or whatever goes onto a prediction market and puts a bunch of money on Bangladeshi prime minister out sometime this year. All it takes is

what, $15,000 to sort of drive up the spike in the market. Everyone's going to say, "Huh, what does somebody in Bangladesh know about the Bangladeshi prime minister?" They can drive a news

prime minister?" They can drive a news cycle. They could drive a political

cycle. They could drive a political cycle, a potential actual ouster of the Bangladeshi prime minister just with like $15,000 on poly market. That's all

it takes. So as whatever benefit we get on a social utility standpoint, I could see the and the exact opposite happening and the harm and more wars, more destruction, more death, whatever

happening because of the availability availability to gamble on the outcomes.

>> The other thing I was thinking here is if there I mean we learned over the weekend that that these platforms are very afraid or do not want to touch uh death. They don't want to touch people

death. They don't want to touch people betting on death and betting on murder, assassination, etc. And when you think about like why that is, to your point, I

wonder if to an extent these platforms would be liable if say someone placed a wager on, you know, here's $500 that this guy's going to get assassinated.

Then someone goes out and actually assassinates them because maybe they actually had money on the line. at which

point perhaps the betting platform or the prediction markets trading platform is in some sense liable and responsible for that death and for that

assassination. Is that something that

assassination. Is that something that you could see playing out? And would

that be like an actual argument if that were to occur?

>> Yeah, I don't know about legally liable, but like responsible. Absolutely. Like

my my bet on will Edson get punched in the face within the next week. you know,

like all of a sudden I have the ability to manip manipulate that market if I were to come down to New York and punch you in the face and then I can make a bunch of money. We actually saw a version of this, as crazy as it might

seem, with um when people were throwing dildos onto the court at WNBA games and then there was a website where you can like I guess pay people to dare them to do things and you could pay like 500 bucks to someone to throw a dildo onto

the court of the WNBA game and then you could buy a prediction market contract predicting that someone would throw a dildo onto the court at the WNBA game.

Why have I said that word so many times?

So yes, it is ripe for for manipulation and right for getting people to do things in the real world that they might not otherwise have done because they can make money off of it.

>> The other thing that I found fascinating recently Poly Market was running a market that let people trade on the odds of a nuclear detonation anywhere in the world. Uh volume spiked to nearly a

world. Uh volume spiked to nearly a quarter of a million dollars in a single day after the Iran strikes happened. And

then people started getting very nervous because traders were pricing in a 24% chance of a nuclear detonation somewhere. Um, and that was on Tuesday

somewhere. Um, and that was on Tuesday and then there was a lot of backlash.

Poly market decided to pull uh that market and now it no longer exists. I

just want to get your reactions to one the fact that we are betting on nuclear war and nuclear detonation and two the fact that traders priced in a 24% probability that we would see a nuke at

some point.

>> Yeah, let let's hope that's the one market that had no insiders that that let's hope that's the one market that was purely speculative. I mean I think poly market just to be really clear right which has drawn the eyeire of many

of the senators this past week is actually not fully yet available in the US and is sort of primed still to enter re-enter the US market. So I wonder if them responding to this sort of public

backlash is in part to sort of remain in the good graces of the US market both politically and sort of socially and culturally so that they can sort of re-enter the market and so that this can really be the sort of Coke and Pepsi

two- horse race that everyone is ultimately anticipating between Kali and between Poly Market when when the company does arrive here sort of in full throat.

>> What just before we end here, what do you think is going to be the future of this from a regulatory perspective?

Senator Murphy is talking about regulating this stuff. It's becoming

more and more popular in the cultural conversation. What is the regulatory

conversation. What is the regulatory future of these prediction markets in light of what we've seen following the strikes? Yeah, as folks may know, there

strikes? Yeah, as folks may know, there are a lot of states that are currently suing these platforms, Kali in particular, specifically over the question of sports contracts, which just

to be really clear, sports related event contracts account for 90% of the training volume uh on on Khi on any given day, which is any given day does not usually include a war with Iran. So

I think ultimately where folks see this headed is the Supreme Court, right, which is sort of designed to take to aggregate lots of state level lawsuits and sort of decide on them at once. So

whether that lawsuit is going to specifically focus on sports contracts or sort of the right of these platforms to exist, I don't know. But I I think that is the most likely given the administration, given the

administration's ties to the prediction markets, given the comments from Mike Celic, the head of the commodities future trading commission, which is the agency that purportedly oversees prediction markets by letting them do whatever they want, then ultimately I

think the the most realistic regulatory approach will actually just come from the judicial branch rather than through traditional regulation.

>> All right, Jonathan Cohen, policy lead at the Institute for Boys and Men, author of Losing Big, America's Reckless Bet on Sports Gambling. Jonathan, good

to see you. Thank you for joining us.

>> Thanks. And proud owner of 24% chance that there's going to be a nuclear bomb in the next year. I can't wait.

>> We'll be right back. And if you're enjoying the show so far, be sure to like and subscribe to the Profod YouTube channel at the link below.

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We're back with property markets.

Defense tech startups are raising billions and they are reshaping an industry long dominated by a handful of old economy giants. Defense tech company Anderil is currently raising $4 billion

in a round that could double the startup's valuation to $60 billion. At

the same time, the Pentagon is negotiating contracts with OpenAI and of course, Anthropic, pushing to bring Frontier AI into defense workflows.

Seronic Technologies is building autonomous boats for the Navy, and Shield AI is building an AI pilot that's being tested in Air Force efforts. All

told, defense tech startups had their best funding year ever in 2025. venture

capital deals jumps to a record $50 billion, up from $27 billion in 2024.

So, here to discuss this new wave of defense tech companies, we're joined by Dan Primac, business editor at Axios and author of the Pratta newsletter. Dan,

thank you for joining us on Profy Markets. I want to start with Anderil's

Markets. I want to start with Anderil's fund raise. Uh I mean just a giant round

fund raise. Uh I mean just a giant round $4 billion $60 billion valuation. You

reported on this. Tell us what we know about this round. Yeah, it's not completely done yet, but the but the broad strokes of it are. I think you know some other investors might come in and they haven't finalized all the

paperwork. But yeah, look, just for some

paperwork. But yeah, look, just for some context here, prior to this round, Andrew had raised a total of just over $6 billion total, which by the way is an enormous amount of money for any startup, but they're going to put 4

billion more on top of this, which means they'll have raised over 10, be valued at over 60. Look, this basically means it would be valued at more than some defense primes are valued at in the public market.

>> What does Ander actually do? This is I mean it's a name that we keep on hearing. And for those who who don't

hearing. And for those who who don't know about Ander, like what are they building? What are they trying to do?

building? What are they trying to do?

>> The the real kind of nub of Andre is autonomy. The idea of making autonomous

autonomy. The idea of making autonomous weapons. Uh some fully autonomous, some

weapons. Uh some fully autonomous, some autonomous, you know, but with a human in the loop kind of. And and with that, uh, think of a lot of self-driving right now, which is self-driving, but you actually have somebody sitting, uh, at

the, you know, in the driver's seat who can hit the brake or can grab the wheel if need be. That that's really the the guts of it, uh, is what they're doing.

And and that means also, you know, applying AI or applying machine learning to weaponry um, and to other sorts of detection technologies, security technologies.

>> So, uh, valued at $30.5 billion last year, the valuation has doubled. Now, is

a is part of this story the fact that there is more warfare happening in the world?

>> Part of it is there's more uh warfare, more defense spending in the US, right?

If you look at the if you look at the what most people view as the tax break bill, the big beautiful bill that got passed last year by Congress and the Trump and signed into law by the Trump administration, huge increase in defense

spending. So, there's that. There's a

spending. So, there's that. There's a

recognition that uh that new technologies just like they're trans, you know, transforming every other part of our society also can trans transform what were kind of some stayed uh weapons

and and you want to keep up obviously with the other countries and and your adversaries. But look, yes, we are

adversaries. But look, yes, we are fighting more than we have before in the US and our allies are whether whether that be arming people in Ukraine, whether that be what's happening right now in Iran, whether that be what

happened uh you know a month or two ago in Venezuela. Yeah, we we are in more

in Venezuela. Yeah, we we are in more theaters than the US has been in in for a long time.

>> What about Silicon Valley's role in this? Because that seems to be also

this? Because that seems to be also something that has changed. You had all of these very legacy prime defense companies north of Grummer and Loheed

Martin etc. and they have their own histories. But now it seems as though

histories. But now it seems as though investors VCs in Silicon Valley who invest in like consumer tech apps who invest in things like Door Dash and

Uber, they're also investing in the weaponry of tomorrow. Is this not becoming a larger story in Silicon Valley? And is that a new paradigm?

Valley? And is that a new paradigm?

>> It is definitely new. I mean, I remember going out to Silicon Valley uh I'm going to guess it was about eight years ago now uh over to Founder Fund's offices and Founders Fund was one of the earliest investors in Andural and and

they actually led uh this most recent or not the new round but the prior one at $30.5 billion and it was a conversation in front of a bunch of valley people kind of quote onstage private

conversation about venture capitalists investing in uh defense tech and military tech and how the military was trying to partner with Silicon Valley.

By the way, this isn't necessarily a right-left thing. Uh the Obama

right-left thing. Uh the Obama administration, the Trump administr the Biden administration, uh Biden, Ash Carter, who was defense secretary at the beginning of the Biden administration made tons of inroads and tons of visits

to Silicon Valley. So, this is something that's both sides, but historically the valley and valley engineers haven't wanted to provide things to the military. They've been concerned about

military. They've been concerned about how they would get used. Uh I don't think that's completely changed.

Definitely look at what's happened with Anthropic in the Pentagon over the last week. But there has been a shift among

week. But there has been a shift among venture capitalists. And by the way, it

venture capitalists. And by the way, it wasn't just an ethics thing or a morals thing for venture capitalists. It was

also a uh feeling that we don't want to h back companies whose primary customer is the federal government because there becomes all sorts of procurement issues there and all sorts of concentration

risk there and and look Anderl has that.

They sell to US allies also, but they have enormous concentration risk with the US government.

>> It is very interesting that we're now at this point where the backers of of our weaponry of tomorrow, I mean, these are Silicon Valley investors. They're tech

people. I I guess I don't know the full history of defense in the US. But my

understanding is this was more in the in the realm of government to be funding these companies, funding these weapons.

Um, does that just as someone who's who's been in these rooms, who knows these people, does that concern you at all or is this just, you know, it's just money from a different place?

>> I think it's just money from a different place, honestly. And and look, and it

place, honestly. And and look, and it really does make sense, right, when you think about the way that uh weaponry or even view it more defensive than than weapons, whether that be things like

interceptors, etc., these are all technology plays, right? This isn't, you know, training a bunch of guys to be able to go storm a beach, right? That

that's a that's a physical thing, you know, put them all in shape. The this is technology that everything throughout the stack, right? Everything from the chips to to the software. So much of what we're drone, think of drones,

right? You know, drone technology has

right? You know, drone technology has largely been funded by Silicon Valley for both consumer use and now for military use.

>> Now that we've seen the strikes in Iran, um I mean, people are saying it's going to last maybe a couple weeks, maybe a couple of months. I I don't think anyone actually knows. Um

actually knows. Um >> what do you think happens next for the defense sector and especially for defense tech, this burgeoning industry

that is that we're seeing? Andel is one of them. Does this mean that we're going

of them. Does this mean that we're going to see larger and larger rounds from companies like Andre? Does this mean more money going forward?

>> I think it most likely does. Um I think it most likely does. You know, we we don't know, for example, exactly if and technology has been used so far in the strikes in Iran. We don't know that for

sure, although uh defense secretary Hegath did today uh speak at a press conference and he talked about the use of autonomous weaponry. Uh so one can assume that andal technology was used or

stuff very similar to that. So yeah,

look, and and if for no other reason, the United States is going to have to replenish stock piles, right? We're

spending an enor, you know, we're spending an enormous amount of money, but also physical hardware on the ground in Iran. Every time we drop something,

in Iran. Every time we drop something, that's something that we ultimately have to replace. And particularly if we're

to replace. And particularly if we're using autonomous drones, etc., those are going to get replaced most likely by companies that are backed by venture capitalists and Silicon Valley companies.

>> All right. Interesting time to be in Silicon Valley. Dan Primac, business

Silicon Valley. Dan Primac, business editor at Axios, author of the Pratta newsletter. Dan, appreciate your time.

newsletter. Dan, appreciate your time.

Thank you.

>> Thank you. We'll be right back. And if

you're enjoying the show so far, be sure to like and subscribe to the Profod YouTube channel at the link below.

We're back with Profy Markets.

Well, as you've probably noticed, the only thing we've really talked about on the show this week is war. We talked

about the energy implications of war, the inflation implications of war, the investment implications of war, and while there are other things happening

outside of war, the reality is war is what people mostly care about right now.

And so that is what we're talking about.

every headline, every article, every podcast for the next few weeks, maybe months, you can safely assume that they will all pretty much be about war. Now,

why am I saying this? Well, for one, I think we should just note that this is going to change the complexion of our conversations in everyday life. We will

be thinking less about tariffs and less about AI and more about guns and missiles and Iran. That is just the reality of the news cycle. It changes

what we think about. Now, the second reason I bring this up is perhaps more relevant to this podcast, and that is this is also going to change the way we

think about our investments. And in the same way that war is now taking a larger position in general conversation, it's also going to start taking a larger

position in people's portfolios.

investors are going to be thinking across every sector. What are the potential defense applications for this company? How could war be a tailwind for

company? How could war be a tailwind for this company? Are there any other

this company? Are there any other military applications and defense angles that maybe other investors aren't seeing? In other words, the way we view

seeing? In other words, the way we view the investment world will increasingly be shaped through the lens and by the reality of global warfare. And in fact, we're already seeing this. And just a

few months ago, we all thought the main use case for AI was white collar grunt work, emails, memos, decks, etc. Well, now we're learning that AI can also be

used by the Pentagon. In fact, it is being used by the Pentagon. It's being

used for intelligence in Venezuela. It's

being used for air strikes in Iran. And

suddenly companies like OpenAI and Anthropic, they have been reccast not just as AI companies but also defense companies. These are the kinds of

companies. These are the kinds of companies that are proving to be actually useful in warfare and as a result they are in very high demand right now. And so I think that this

right now. And so I think that this could become a trend. If you can position yourself as a company that can protect lives and indeed maybe take

lives, well then in a time of war, that is an entirely new and interesting value proposition. That is something that

proposition. That is something that investors didn't care about 2 years ago, but suddenly they care a lot about it now. So my prediction as we end this

now. So my prediction as we end this episode is that defense is about to be the new AI. Not just in the sense that it's going to receive a lot more

investment, which it will, but also in the sense that it will receive a lot more hype. Every VC, every startup,

more hype. Every VC, every startup, every tech company will now be asking themselves the same question, and that is how do we position ourselves and

brand ourselves as beneficiaries of war?

Now, this is not something to be celebrated. It's not something to be

celebrated. It's not something to be excited about, but it is what it is.

Just as war has become the focal point of our attention and our conversations and our social media and the news cycle, all of these things, it would then

follow that war is about to become the focal point of our investments, too.

Thank you for watching Profy Markets from Prof Media. If you like this episode, subscribe to our YouTube channel and tune in tomorrow for a conversation with Steve Iceman.