00:00Now, the prediction markets are the other hot topic of the year here with Kalshi and many others stating that they're not sports betting companies and they're doing things differently and they should be allowed to compete with some of these other companies in the space.
00:13And Sam, I think what's most fascinating is, is they keep winning in a lot of states and they're able to operate in a lot of states.
00:20And it feels like the sports betting operators have caught eye of this and said, well, look, if they're going to be allowed to operate, why not get a little piece of the pie?
00:28And it feels like that's what's next for DraftKings here.
00:32Yeah, I think you're spot on with that assessment, Craig.
00:34Originally, it was kind of just, oh, wait, these prediction markets are offering sports.
00:38That looks very much like sports betting and that will probably get cracked down on.
00:42And, of course, we had, I think, seven states filed lawsuits, Nevada, New Jersey, to stop this.
00:48Basically, the regulators in those states saying, hey, this is sports betting.
00:51You need to get a license. You can't just open up shop here.
00:54And notably, they're in states where there is no sports betting like California as well.
00:58But like you mentioned, those lawsuits, they were all allowed to, there was preliminary injunctions which were issued, which basically allowed these companies to keep operating while the lawsuits play out.
01:10The CFTC, which is supposed to regulate prediction markets, really has done nothing.
01:15They've kind of just kept their hands free.
01:16And I think, yeah, now you have sports betting operators who maybe in the past were, you know, afraid to piss off a state, piss off a regulator, you know, kind of work in bad faith if they want to, don't want to jeopardize their business elsewhere.
01:29Now they're starting to say, OK, maybe this is a huge way for us to get in these states instead of spending, I don't know, billions of dollars in California to try to get it legalized and signing a deal with the tribes to give away 50 percent of your revenue.
01:44Why don't we just launch a prediction market and start taking business there?
01:48That certainly seems to be kind of where the breadcrumbs are leading us.
01:51There was a report this week that DraftKings is in talks to acquire RailBird, which is a CFTC regulated prediction market.
01:57It actually just got its regulation about a month ago.
02:01So the timing is really interesting.
02:03It just became a thing.
02:04And, you know, DraftKings apparently is already going after it.
02:07DraftKings had actually previously filed to run its own prediction market in April called DraftKings Predict.
02:13But all of a sudden they pulled their application.
02:16That happened a few weeks before there was supposed to be this big roundtable,
02:19which the CFTC called their first step in kind of figuring out what's going on with these prediction markets.
02:25You have states, you have gaming companies, you have lawmakers angry at them saying, hey, this is sports betting.
02:31You've got to crack down on it.
02:33And then they suddenly just pulled the roundtable.
02:36It's not happening.
02:36There's no reschedule date.
02:37So I think that is also maybe one of those hints that a company like DraftKings took and says, OK, maybe, you know, this is going to be allowed.
02:45Maybe there is no crazy crackdown.
02:47So, you know, if DraftKings gets involved, if they buy this, if they go in a state like California where there is no legal sports betting,
02:53that would certainly have a lot of ramifications.
02:56FanDuel hasn't ruled out doing something like this.
02:58I imagine they would follow right after DraftKings.
03:00Of course, they are in talks with the tribes.
03:02They're actually closer to a deal than they've ever been to get sports betting legalized.
03:06But the tribes really do not like sports prediction markets because they view them as sports betting.
03:11So if DraftKings starts doing that, it would probably piss them off.
03:15And then maybe you have sports betting fall apart in California.
03:18It never becomes legal.
03:19There's so many different kind of ramifications here and kind of consequences of this whole thing.
03:24And kind of the overarching shadow behind it is it feels like something will come eventually that declares what Kaoshi, what, you know, Robin Hood, what predicted, what this company Railbird, what they're doing.
03:37It feels like something will come to declare that as sports betting and not okay.
03:42We just don't know when.
03:43And I think, you know, for DraftKings, they want to jump in if there's, you know, uncertainty around it.
