Arizona's Tight Grip on Sports Betting and Prediction Markets

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00:00the state of arizona as you guys wrote about over at legalsportsreport.com it appears as though they

00:06are another state that is you know saying hey look you know where's our cut where's our money

00:11where's our tax and if you don't pay it and you're operating in that space and you already have a

00:16legal license in terms of sports betting you may lose it entirely if you don't come and make sure

00:22that you operate properly here i don't know if properly is really the way the word for it because

00:27i don't think any of them are operating anything properly but you tell me yeah it's a great thing

00:33to outline first that one of the reasons the states are so pissed off and concerned is because these

00:38companies aren't paying the taxes and the fees that you know the first that's the first reason

00:42these states legalized sports betting to begin with uh but arizona coming out this week not suing

00:48calci and robin hood but rather telling every licensed sports betting operator and every licensed

00:53fantasy operator in the state hey if you guys do the sports prediction market business doesn't

00:57matter if it's in arizona or california texas these huge markets without sports betting which is really

01:03where the bulk of this business has been happening if you do them anywhere you risk losing your license

01:08in arizona so that obviously applies to companies like fanduel draft kings and even underdog sports

01:14which is a licensed fantasy operator in arizona now fanduel draft kings have so far not gotten

01:20into the prediction market business they have not ruled it out their executives have said hey you

01:25know if this keeps happening it might be something we have to do to get to these big markets where

01:29we haven't been able to legalize sports betting like a california like a texas fanduel meanwhile has

01:34said they're going to do prediction markets later this year but not with sports at least to start

01:39drafting is also making moves to acquire a prediction market company but neither has gotten into the

01:44space yet now you do have underdog is the only licensed fantasy operator that's actually gone into

01:50this space earlier this month they launched a sports prediction platform with crypto.com in

01:56about 16 states mostly where sports betting isn't legal so not in arizona but notably in the letter

02:02that the arizona regulators sent they said even if you do it elsewhere you risk losing your license here

02:06so for these sports betting companies that are kind of not being able to jump in on the sports

02:12prediction market space while they wait to see how everything shakes out they kind of have this

02:16dilemma if do we go in do we try to cater to a market and capitalize and make money you know kalshi

02:21has already surpassed a billion dollars in monthly trading volume pretty much because of sports and

02:26these sports books are forced to wait on the sidelines do we jump in and try to you know take a cut of

02:31this business or do we risk losing everything that we spent years building with legalized sports betting

02:37lobbying you know getting states to be on your side uh you know license you approve you to be it's kind of this

02:44dilemma do we come in and get money now or do we wait until maybe the environment looks a little bit

02:49more clear in a year but who really knows what's going to happen with this stuff uh but it is very

02:54notable we see more states kind of taking action to say hey don't do this ohio has also done something

02:59similar as well of course those states with the cease and desist and the massachusetts with its lawsuit

03:03as well as the other lawsuits so there is mounting pressure here but at the end of the day we still

03:08don't really know what's going to happen