00:00All right. So sport event contracts, prediction markets, the story of the year for us here when we talk, Sam, and everyone over at Legal Sports Report, some states say, okay, no problem. Other states say you got to pay your taxes like everybody else. So in this case, our latest story is the state saying no go, got to pay taxes, got to be like the rest of the sports gaming operators. I guess we'll just have to see what happens here.
00:21Yeah, it's a similar story when we were, you know, when I was on the show last year talking about daily fantasy sports and sort of the parlay products that they had that a lot of states said were sports betting. Now we're doing the same thing with these prediction markets, which companies like Kalshi, Robinhood, Crypto.com have been basically using to try to skirt sports betting laws, offer a very similar product.
00:43Tennessee is just the latest state to get involved in this, but they're actually the first one to ask the federal regulator to step in and shut down the sports prediction markets, which puts new pressure on the markets themselves.
00:58The Commodity Futures Trading Commission has been basically trying to figure out how they regulate this. It's under a new regime under President Trump. So it's been a while since they really have gotten all their ducks in a row.
01:11Meanwhile, you know, you've had nine states now take some action against them. A lot of them have sent cease and desist, arguing that what these companies are offering is actually real money wagers.
01:21And they're doing it in 50 states without sports betting licenses, without protections, without any of the taxes that we just talked about briefly.
01:29So you have the industry watching it to see if this can continue. And they're not, they're frankly, they're not subject to the same regulations on both fronts.
01:37So, you know, now momentum is basically building against these companies, all while we wait in the CFTC to intervene here.
01:46We've had the federal court case in Nevada, where the state just sent a cease and desist letter telling them to get out of the state.
01:53A judge overruled that saying they can keep going until the CFTC really chimes in here.
01:58But meanwhile, they've handled a lot of money and they keep expanding. We had $500 million just on Calci, was wagered on March Madness.
02:07And then they just launched MLB markets this week as well. So they're expanding basically while the CFTC is trying to figure out how to do things.
02:14And meanwhile, states are pushing back, telling them, you know, if you're not licensed to do sports betting in the state, we want you to not offer this product.
02:21So we'll see, you know, this is going to be a story we keep watching here, but we'll see when it all comes to a head.
02:26We'll see if anything, you know, actually happens as a result of this.
02:30I would imagine there'll be a lot more lawsuits and eventually it's all going to be decided in a court.
02:34But this is a very interesting development in this process that, again, only started in January is when they first started offering these sort of sports prediction markets,
02:43which are very similar to sports betting, but they say don't want to be regulated as sports betting.
02:48It only started in January and we're only a couple of months into the year and already it's rapidly expanding.
02:52We have now nine states taking some kind of action against them.
