Railbird Exchange’s founders waited three years to be certified by the Commodity Futures Trading Commission (CFTC) as a designated contract market, allowing the startup to launch a prediction market.
The announcement was made June 18, a notable nugget to a prediction market news cycle that seemingly churns everyday on what legal filings are being made by or against Kalshi as it defends its asserted CFTC-backed right to offer sports events contracts nationally.
The news has since gone silent on the Railbird front. The company has so far eschewed media interviews, leaving two press releases and LinkedIn as the only source of information for so many questions, including, “Who’s the horse racing fan over there that came up with the name?”
Details are scarce beyond press releases, bios
Railbird, by the bullet point:
- Railbird was founded in 2021 and secured initial funding through the Winter 2022 Y Combinator accelerator program, which matches startups with seasoned investors and mentors.
- Crunchbase is fired up about it.
- A Railbird press release announcing certification noted an expected launch date for trading of “later this year.” The real-world events markets it expects to offer range from “economic indicators to entertainment and cultural moments.” Sports aren’t specifically listed. Sports markets, of course, are why Kalshi and other exchange markets like Crypto.com are the bane of state sports betting regulators.
- Railbird co-founder Edward Tian said in the inaugural press release: “Event contracts represent a largely untapped opportunity for individuals and businesses alike to hedge risk. We are looking forward to allowing our users to apply the power of capital markets to everything from daily news to societal changes.”
- Miles Saffran, the co-founder and chief executive officer, is a former investment research analyst at Point72, an American hedge fund founded by New York Mets owner Stephen Cohen. He worked in fintech and gaming, according to the Railbird website.
- After graduating from Yale with a degree in computer science, Saffran, a Floridian, built machine learning models to augment the Orlando Magic’s scouting and in-game play. He also appears to have been a bit of a do-gooder while attending Trinity Prep in the Orlando suburb of Winter Park.
- Tian, who received a B.A. in Mathematics-Statistics and Financial Economics from Columbia, also worked at Point72 – focusing on fintech, internet, and business services – before co-founding Railbird and becoming chief operating officer. Among his listed passions in his company bio is sports. Clue!?
- With the membrane between regulation and capitalization particularly porous in both the gambling and finance industries — Donald Trump Jr. is a Kalshi board member and another, Brian Quintenz, could soon be confirmed as the new CFTC chairman — Railbird has secured what appear to be key insiders, too.
Railbird board member Dawn Stump is a former CFTC commissioner who was involved in crafting the Dodd-Frank Act in 2010. The CFTC, empowered by the act, can abolish certain events contracts it deems contrary to the public interest or unlawful under any federal or state law. That is a key sticking point between Kalshi and state regulators attempting to bar it from offering controversial markets, particularly involving politics or sports.
Here’s Stump on the topic:
- Fellow Railbird board member Ron Oppenheimer is a long-standing member of the executive committee and chairman of the membership committee with the National Futures Association, which describes itself as an “industry-wide, self-regulatory organization for the U.S. derivatives industry, providing innovative and effective regulatory programs.”
- Railbird Chief Compliance Officer Anne Loranger is a former chief regulatory officer at Coinbase.
- And finally, a bunch of Railbird employees took in a Mets game last week, according to a LinkedIn post. Team-building is important. Let’s hope Saffran and Tian’s old boss from Point72 comped those seats.
Railbird Exchange’s unanswered questions
Among Railbird’s few public proclamations since earning CFTC certification was the announcement of QC Clearing as its clearing services provider.
Connamara Technologies was named last week to Railbird’s EP3 exchange platform.
Beyond those factoids and the bios, are plenty of questions.
Key among them is why the company has been so uniformly mum. There’s not been so much as a Contessa Brewer sit-down as another combatant prepares to enter a prediction market landscape very much in flux.
Why?
Observers note that even with years to prepare for certification, readying to launch is an entirely different matter. No one outside of the company knows when the clearing service or platform deals were actually struck, so Railbird may be very much slow-walking toward launch by necessity.
There also stands to reason that in a very complicated period in the history of legal gambling in the United States, with Kalshi likely spending millions to contest a multi-state legal campaign against a slew of cease-and-desist orders, Railbird’s founders could consider it prudent as a startup to maintain a low profile and let some future rival either take the body blows or clear the path without them incurring ill will. And expense.
Or maybe they’re still at the Mets game.
At least they could shoot us as an email on what the name’s all about.
