The Original Prediction Market Was Betting on the Pope

SPEAKER_2 (0:02)

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Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:24)

Joe, prediction markets.

Joe Weisenthal (0:25)

Yeah, I love them.

Tracy Alloway (0:27)

I know you do. I find them mostly entertaining versus insightful. And I like looking up things that people are betting on. So I saw today, people are betting on the temperature in New York. There's one pool for Will Doge and Elon Musk claim there's missing gold at Fort Knox before May. There's political stuff, obviously, like who will be the next German Chancellor. But we haven't actually done that many prediction markets episodes. We did one with Nate Silver late last year, but we should talk about them more.

Joe Weisenthal (0:58)

No, I totally agree. And I'll say two things in their defense. One is, to the point, like it's interesting to see what people are betting on, is sort of an interesting news filter in and of itself, because I'll look at, say, Polymarket, and I'm like, I didn't even know people were talking about this. Whatever it is, is someone going to have a baby? Is so-and-so going to be with so-and-so on Love is Blind or whatever, which I don't watch. But it gives you a read on like, okay, this is interesting right now. And I do really think there's something to be gleaned that's in the price, in several of these. And it's not that they're right or wrong. And I've never thought about the usefulness of prediction markets from a right or wrongness standpoint, but more like if you have an opinion on something, how does it differ from conventional wisdom right now? Is there a big gap between your sense of something happening and the market sense of something? And so sort of taking the temperature of the betting public. And it is a narrow slice, not everyone bets, but generally speaking, there isn't gold lying on the ground, right? Like generally speaking, there aren't tons of obvious opportunities to make money from these markets.

Tracy Alloway (2:14)

So I will just say one of the big debates is whether or not this has social value. If you add financial incentives into betting, the betting mix, do you actually get better predictions? As you say, there tends to be a certain type of person who is betting on something like Polymarket and Cal-She. So maybe it's a good thing for getting a read on a particular slice of the population, but I definitely have questions.

Anyway, all of it kind of got me thinking. We've probably had some form of early prediction market way, way back before we had things like Polymarket and Cal-She. And I guess getting philosophical, all markets are essentially prediction markets. People think a company will do well or bad, but there must be some early examples of people betting on very specific social things. And it turns out there is one. There's a really good example. And it is the papal prediction market.

Joe Weisenthal (3:09)

This is crazy to me. I had no idea this existed.

Tracy Alloway (3:12)

Yeah, so in Renaissance Rome, betting on who would be the next pope was a thing. And in fact, a very interesting market was built around it. So we should talk about that. And I'm glad to say we have the perfect guest to talk papal prediction markets. We're going to be speaking with Ryan Isakow. He's the author of the No Dumb Ideas sub stack. So Ryan, welcome to the show.

Ryan Isakow (3:35)

I'm thrilled to be here.

Tracy Alloway (3:36)

Why did you decide to become an expert in Renaissance papal betting markets?

Ryan Isakow (3:41)

It's a good question. It goes back to, I was writing a sub stack about prediction markets in general. I typically write about economic or social ideas through the lens of a business pitch. And I wrote one about the idea of paying lobbyists through prediction market contracts. And that got me on to polymarket regularly to check what the latest bets were. And I saw when the pope was in the hospital, and I'm glad to say he's doing better, that one of the top markets...

Joe Weisenthal (4:05)

We're recording this March 11th.

Ryan Isakow (4:09)

One of the top markets on polymarket was New Pope in 2025 And that just seems so shocking to me. It's such an outrageous thing to bet on. And when I went to the comments, which were a mix of compassionate and tasteless, I saw this idea that you could be excommunicated for gambling on this market. And while that's actually no longer true, that led me down this rabbit hole of trying to understand what were the dynamics around this? Why was this put into place? What did it mean? And I started looking to the academic literature, and I saw there wasn't a lot of public-facing writing that went any deeper than this market existed, and you could be excommunicated for it. And so I figured, if not me, then who else? So I started writing about it.