Good morning. The New York Knicks are N.B.A. champions for the first time in 53 years, after defeating the San Antonio Spurs, 94-90, in yet another come-from-behind win. Jalen Brunson, who scored 45 points last night, was named finals M.V.P. The series energized New York in a way few other events have, with celebrations in the streets after every victory. (See photos from last night’s party.) And it resonated far beyond the city, with higher TV ratings than any other N.B.A. finals this century. The games also attracted more than $700 million in bets on the prediction sites Kalshi and Polymarket. At the start of the series, the Spurs were the favorites. Bettors on those sites put San Antonio’s championship odds at over 60 percent. The Knicks proved them wrong. Betting is fundamentally about risk: You might win, or you might lose. But what if you could game the odds so that you’d always come out on top?
Net gain
For the first game of the N.B.A. finals, my friends and I went to a bar offering a deal that seemed too good to be true: If the Knicks won, the bar would cover every customer’s tab, up to $100. As tipoff approached, young people variously clad in starched button-downs and Brunson jerseys galloped from nearby Midtown offices for a chance at free booze. The line snaked around the block, and the bouncer made a show of blocking the front entrance. People screeched at one another. My buddy, already inside, shooed me in through a side door. (I heard someone whine, “Why does he get to go in?”) Three hours later, when the Knicks overcame a 14-point deficit to take down the Spurs, strangers in the crowd were hugging and high-fiving. Outside, a passing garbage truck honked its horn in celebration. The entire city seemed to be shouting with joy. And at the Jeffrey, which bills itself as a neighborhood spot for “craft beer, cocktails and bites,” 726 beers, 385 cocktails and 175 smash burgers were on the house. Over the hedgeWhen someone hands you a freebie, by all means: Take it. But you and I both know there ain’t no such thing as a truly free lunch. So while downing drinks, I kept asking myself whose money I was taking. Turns out, it belonged to Kalshi users who’d bet on San Antonio — in other words, deadbeats and turncoats who had it coming. (Kidding! Kind of.) Before the game, the bar’s owner, a 50-year-old corporate lawyer, had used the prediction market to bet $5,000 on the Knicks. Since the Spurs were the favorites, that position netted him around $8,000 when New York prevailed — enough to cover nearly everything the crowd had consumed. If the Knicks had lost, the bar would’ve been out the $5,000, but it could have covered its losses with all those drinks and smashburgers. (Plus the free publicity — you’re welcome.)
As I nursed my first beer, overhearing a guy behind me flirt with two women who work in finance, I flirted with my own idea for a hedge: What if I placed a small bet — $25, say — on the Spurs, so I, like the bar’s owner, could make winning a sure thing? Let me walk you through it.
I told my friends about my brilliant plan, and they were mortified. It promised a financial coup, sure, but it was also a betrayal: Didn’t I believe in the Knicks? I closed Kalshi and ordered another round. Risk-free throwIf you’re willing to take both sides of the same bet (and, let’s be honest, are not a true fan) then there’s a world of sure things waiting for you on prediction sites like Kalshi and Polymarket. And there’s a world of bettors profiting from them. I’ve spent the last few weeks digging into this phenomenon with Katherine Chui, a graphics reporter. This weekend, we published a new story about a popular betting strategy, called arbitrage, that takes it to the extreme. Folks in finance have used it for decades to game all manner of markets — stocks, derivatives, crypto. When President Trump’s tariff threats sent U.S. gold prices soaring last year, some traders made money by buying gold cheaply in London and selling it for a higher price in New York. Now savvy bettors use the same underlying strategy to make a killing on prediction sites.
Take Ryan Noel. He worked as an actuary after college but quit last year to arbitrage-bet (or “arb,” as he calls it) full time. He has made more than $1 million since late 2023, almost entirely on live sporting events. “I don’t care about sports at all,” said Noel, 25. “I think watching sports is the most boring thing you can do with your time. I’m a mathematician.” The math is pretty basic. It involves finding two sites with different odds for the same bet. Then you buy one position on one site, and the opposite position on the other site. Because of the disparity, you’ll turn a profit when the bets resolve — regardless of the game’s outcome. When done correctly, and fast enough, there’s almost no way to lose; it’s that elusive free lunch. But more and more Wall Street institutions are pouncing on the opportunity, deploying armies of bots to arb for them in fractions of a second. That speed and volume makes the disparities on prediction sites disappear almost instantly, which in turn makes it harder for human bettors like Noel. Read our story on prediction-market arbitrage here. We made diagrams to show how it works. More on the Knicks
It’s Trump’s 80th birthday — and America’s 250th — and he’s celebrating the milestones with an Ultimate Fighting Championship cage match in his backyard. A towering, 600-ton steel claw has been built on the White House’s South Lawn, along with seating for 4,300 people, swiveling lights and video screens. Seven pairs of U.F.C. fighters will face off in the octagon at the center tonight, starting at 8 p.m. Eastern. Off in the corner, members of the U.S. Marine Band have set up amplifiers and drum sets. “We’re expecting Super Bowl-type numbers for this fight,” said Dana White, the chief executive of U.F.C., which expects to spend some $60 million on the event. Will that many people really tune in? We’ll have to wait and see. According to a new poll by Reuters and Ipsos, just 16 percent of Americans said it was “appropriate” for Trump to hold the fights at the White House. “It seems a provocative, P.T. Barnum-esque gambit for the president to be pulling at a time of high gas prices, low poll numbers and open war,” Shawn McCreesh writes.
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