Can a Mexican cartel stronghold host the World Cup?

0:02Good morning from the Financial Times. Today is Friday, June 5th, and this is your FT News Briefing. Elon Musk is cozying up to retail investors. And can a bunch of cockroaches upset Indian politics? Plus, the World Cup kicks off next week. We'll take a look at the challenges one host city is facing. Guadalajara is a place with a lot of cartel presence and a lot of cartel control. It's not really the ideal image for a football tournament. I'm Mark Filippino, and here's the news you need to start your day.

0:41SpaceX expects to go public about a week from now, and CEO Elon Musk wants to prioritize everyday investors. About one-fifth of SpaceX shares will be reserved for retail investors. That's according to sources familiar with the matter, and it's unheard of for such a large IPO. Musk expects the company will raise around$75 billion. Then again, this isn't entirely out of character for Musk. He told his social media followers in 2020 they'd get top priority for the SpaceX listing. Individual investors own more than 40 % of Tesla's stocks. SpaceX will set the final IPO price on June 11th, and it's expected to go public the next day.

1:26It's not unheard of to use an animal to symbolize a political party. Here in the U.S., the Democrats use a donkey and Republicans use an elephant. And in India, a youth protest movement is aligning itself with the cockroach. It's gone viral, and it's challenging the ruling party of Prime Minister Narendra Modi. I'm joined by the FT's South Asia Bureau Chief, Michael Stott, to tell the story of the Cockroach Janta Party. Hi, Michael. Hello. So, Michael, how did this movement originate and why did the party choose a cockroach as its emblem? So, this party appeared almost out of nowhere. It was the brainchild of an Indian doing post-grad studies at Boston in the U.S.

2:07His name is Abhijit Dipka. And he said he had the idea for this movement after he had read in the papers of India's chief justice calling unemployed young people cockroaches. And he was so outraged by this that he decided to start a satirical online protest movement called the Cockroach Janata Party. Now, that's a play on the name of Prime Minister Modi's party, the Bharatiya Janata Party. And that's where this thing began. Now, Michael, you spoke to Abu Jut Dibka. What's his background? And how does he plan to capitalize on this moment? Well, he told me that he'd finished his master's degree in public relations in Boston, and his plan was just to apply for jobs in the States and stay there.

2:52And then this whole movement has changed his life. He's got 22 million followers on Instagram, and they've been telling him they want him to turn this satirical online protest movement into a proper political movement in India. So he's decided to respond to that by coming back to India. He plans to lead protests demanding the resignation of the education minister, who's been implicated in some scandals over public examination problems. Yeah, what are the problems in the education system that Dipka says need to be addressed? These exams are crucial for millions of Indians who take them every year, who spend years of their life and sometimes borrowed money studying to pass them because it's their big chance to gain a decent job.

3:37And some of these exams have had to be cancelled after people have taken them because it's emerged that the question papers haven't been secure or that mark sheets have been leaked or that papers have been marked wrongly. So Dipka, he says the first thing he does after getting back to India from the US will be to go to a police station in central Delhi and ask permission to hold a big rally in the government quarter of his supporters to demand the education minister's resignation. That's one of their main demands. One of the others, of course, is young people should no longer be treated as cockroaches, but should get proper support from the government and that the government needs to take seriously the crisis in youth unemployment in India.

4:18Has the government said anything about this? Well, the government has responded by saying it doesn't believe that the sudden explosive growth of this cockroach movement is genuine. It thinks this is a campaign of bots. They believe these are bots originating in Pakistan. They're arch enemy. Cockroach Party says that isn't correct. they've published data from Instagram showing that 94 % of their Instagram followers are from India. But the government is insisting that it doesn't believe that such rapid growth in numbers can be genuine. Michael, do you think that this movement can last? And does Dipka think he'll get a big turnout for the protests that he's planning?

4:57He says he thinks tens of thousands of people will show up. What I'm told here by people who follow youth movements in India is that there is genuine discontent. There is a feeling that problems of youth unemployment and of problems in the exam system and in public education have not been addressed by the current government adequately over its 12 years in power. So we may see India come up with a sort of youth protest movement of the type that some neighbouring nations like Bangladesh and Nepal have seen. There are also other people who say India's different. It's not something that will take off here.

5:30And they think this will be a flash in the pan. I think we're just going to have to see over the coming weeks and months how this plays out. Michael Stott is the FT South Asia Bureau Chief. Thanks so much, Michael. Thank you.

5:47Soccer fans around the world are gearing up for the World Cup, but there's one host city that could be a tough sell for soccer tourists. It's Guadalajara in Mexico, home to one of the country's most powerful criminal cartels. And lots of people are wondering whether it'll be safe for fans. Here to discuss how the city is preparing is the FT's Kira Nugent. She traveled there earlier this year. Hi, Kira. Hi, Mark. So I've never been to Guadalajara. It's hosting four group stage games in the World Cup. Tell me a little bit about what the city is like. Yeah, so it's a big city. One of Mexico's biggest economic centers.

6:22It feels pretty leafy. There's lots of shopping malls. You know, I would say it feels safe and like a normal city for tourists. But there's also this other side to it that people are concerned about. Well, Guadalajara is the capital of Jalisco State, which is the home of the very powerful Jalisco New Generation cartel. And security forces killed the leader of that cartel in February, and it started a big reaction in Guadalajara. There was at least a day, a bit longer, of very violent protests. They burnt cars and businesses and killed some National Guard members. And I mean, those protests extended across the country, but they really drew attention to how Guadalajara is a place with a lot of cartel presence and a lot of cartel control, where they're capable of these kind of coordinated attacks.

7:03It's not really the ideal image for a football tournament. No, it seems on its face like it might be a pretty risky place to host the World Cup. So I think, yes, on the face of it, it definitely seems that way. But I would say everyone I spoke to in Guadalajara, experts, law enforcement officials, almost all of them agreed that it's just not in the cartel's interest to disrupt the World Cup. Fundamentally, these are businesses, illicit businesses, And killing or attacking tourists or big events is not going to earn them any money. Actually, if they were going to earn money from tourists, it would be by selling them drugs or prostitution or trafficked alcohol and cigarettes.

7:41So they wouldn't want to drive those customers away. It would be very illogical and a lot more trouble than it's worth. There's no reason to be worried about violence because why would you hurt your customer base? That makes a lot of sense. What have government officials said about the safety concerns? Yeah, I mean, first of all, you can't rule out like any kind of crime, obviously, visiting any big city and anywhere in the world, and especially in Mexico, there is some risk. But President Claudia Sheinbaum has been very insistent that there is every guarantee that tourists are going to be safe during the World Cup.

8:13The national government is deploying almost 100 ,000 extra security forces around the country to make sure everything goes smoothly. State governments are also pulling out all the stops. They really want this to be a moment to show the world that Mexico is in control, the state is in control, and it can be a big celebration for the country. I guess the question I have is, does Guadalajara have a track record of hosting games that maybe we could pull precedent from? Yeah, they hosted the Pan American Games in 2011, which, if I recall correctly, was during quite an intense period of inter-cartel fighting.

8:50But everything went off without a hitch. They host the world's second largest book fair every year that goes smoothly. I also went to a qualifier match in March in Guadalajara's Akron Stadium. I think it was very boring in every respect and there was no kind of unpleasant excitement. People had a good time. I think one goal was scored. That's exciting for a soccer match, isn't it? Yeah, absolutely. That's the FT's Kira Nugent. Thanks, Kira. Thanks, Mark.

9:26As we just heard, public safety for soccer fans attending the World Cup is one focus for the tournament that starts next week. So is the rivalry between betting markets and online gambling companies. To chat more about this mega event taking North America by storm, I want to bring in Victoria Craig for our regular Friday chat. Hi, Victoria. Hey, Mark. So this is not just a battle on the pitch during the game, but also a battle for the dollars that go toward betting on the outcomes, right?

9:52Ciara Nugent: Bingo. And this is what bosses in the sports betting industry are describing as the biggest betting opportunity in history. It's one that brings huge potential to attract new customers to their platforms. So traditional bookmakers like Flutter's FanDuel are increasingly moving into prediction market style products because they're trying to compete with the likes of Kalshi and Polymarket. And so that is really where things are starting to heat up. And for folks who don't know the difference between these two, the main difference is with sports betting, you're betting against the house. With prediction markets, you're betting against other traders.

10:27Right.

10:28Ciara Nugent: And the other key thing to note is that some U.S. states actually ban sports betting, whereas with prediction markets, they are able to bypass these bans because instead of being considered gambling products, they're considered derivatives markets. So this is the first World Cup to take place since prediction markets have really emerged as a major rival to the traditional sports betting industry. So what does this mean when betting on the World Cup games? Well, the two biggest prediction market operators now make most of their income from sports wagers, and contracts on the World Cup winner are already the biggest prediction market bets on record, nearly$1.5 billion on Polymarket already.

11:11Ciara Nugent: So the platforms, as you can tell, are in a real battle for the bucks. They're all rolling out discounts, deals, rewards, new features, all to attract all of us World Cup watchers sitting around waiting for ticket prices to fall. We might be waiting a while. I think so. Victoria Craig, thanks so much for breaking this down. Thanks, Mark. You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News Briefing was produced this week by Sonia Hudson, Safiya Ahmed, Katya Kumkova, Fiona Simon, and Victoria Craig.

11:47It was edited by me, Mark Filippino. Our show is mixed by Alex Higgins, Kelly Gary, and Sam Giovinco. We had help this week from Peter Barber, Michael Lello, David Da Silva, and Gavin Coleman. Our intern is Colvin Miltenberg. Our executive producer is Topher Forges. And our theme song is by Metaphor Music.

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