Ep 287- FairSquare CEO Dave Gilbert

**John** (0:01)
Hey, it's the FinTech Newscast. My name is John, and with me, as always, we're lucky to have Steve. Welcome.

**Steve** (0:08)
How's it going, John? Spending all this money?

**John** (0:11)
Are you applauding yourself?

**Steve** (0:13)
No, no, that's me. Just throwing money away. Making it rain.

**John** (0:17)
Yeah. All right.
And we are very lucky to have this week a special guest, Dave Gilbert, the CEO and founder of FairSquare. Welcome to the podcast.

**Dave Gilbert** (0:30)
Thanks, John. Nice to be on.
Steve, I like that Money Show.

**John** (0:38)
There's never anything actually in his hands when he does that, but someday, someday, Steve.
All right. Our new story for the week. I've been seeing a lot in the news about prediction markets and how they're kind of working their way into the financial system. JPMorgan and Goldman Sachs specifically have been talking to Caoshi and PolyMarket and how they can coordinate, and maybe they and other FinTechs are going to get ready to jump into what has been a very profitable market at the expense of the people jumping in there. What do you think, Steve? Are Caoshi and PolyMarket real FinTechs, or is that more like a Las Vegas casino?

**Steve** (1:25)
Oh, I think it's definitely on the Vegas side. I think that even with the oversight from the SEC or the Commodities Trading Commission, I think these are not FinTechs by any stretch of the imagination. I think that it's a hot market. And speaking of that, I actually saw earlier how, speaking of a company that was chasing after the latest trend, Meta recently announced that they're building something called Project Arena, which is basically their way to build a separate app to enter the prediction market space. So once Meta goes into an industry, you can pretty safely assume that it's pretty saturated.

**John** (2:03)
You could probably use your Meta glasses to get into the metaverse and start betting on things in their platform.
And then you share and have people share and like your... You can crowdsource your...

**Steve** (2:19)
You can crowdsource your predictions.

**Dave Gilbert** (2:22)
I do think on the FinTech side, I mean, there is a lot of people that are addicted to prediction markets, right? It's a person's dream to predict and gamble or to make a position, which allows... It's in the same with the stock market to some level, with puts and calls, and it's just kind of going big where you have big institutions involved. So while it's gambling, you could say Vegas was gambling, the regulation came in and then kind of legalized it and put better infrastructure. And so it is kind of interesting times where FinTechs are getting involved in distribution of unique stuff, right? Just to help the flow of money or information.
Who better to do that than people that are tech-driven FinTechs? So, it is a weird period of men is getting in it. I mean, that's what people, they love it, so.

**Steve** (3:26)
They love it, but it's also, you know, to your point that you mentioned earlier about Vegas, unlike Vegas, this is gambling that you can do in your underwear, from your bed, 24-7, right?

**John** (3:37)
This is not a picture I want painted when you're saying it, Steve.

**Steve** (3:40)
Well, this isn't me, this is the hypothetical guy.
And it's also something that, you know, it's built to garner your attention, to keep you hooked on the other as well, and it's something that you do socially. So I think it's actually much more pernicious than the gambling that we saw in Vegas. It's also interesting because there's all these studies that, you know, that demonstrate how the legalization of gambling can actually have significant bad outcomes for people. For example, I know that there's a study in Pennsylvania where they tracked bankruptcies and rates of suicide. And basically, every negative outcome you could have has actually increased after gambling was legalized. Now you add to that, you know, the pull of social media, look at what I gambled, etc. And also the fact that you can gamble on everything now, right? Famously from Iranian missile strikes to what words the president will say, etc.
I don't think it's a good look. And it's hard to see that these companies are going to answer.

**Dave Gilbert** (4:36)
Their history of gaming, I think, is kind of biblical, right? In terms of betting, right? And so the, you know, how do you flow with people that want to consume something? And then is that a problem? So you look at the history in the US, you have a lot of Indian reservations, you have a lot of local casinos that you're kind of like, why is she, why are they in these specific communities?