00:00One of the biggest sports betting operators has decided officially not to say they're going to join the space, but to launch their prediction market app.
00:08So let's talk about that and what it could mean in some states that actually have regulated sports betting.
00:16Yeah, DraftKings announced today that it's going to launch prediction markets in 38 total states, which is pretty much the same number that they have a legal sports book in.
00:26And they're going to go into 17 states specifically with sports event contracts.
00:31Of course, prediction markets aren't as limited to sports.
00:34You know, as a matter of fact, they kind of started off not being in sports where you could offer, you know, things on the outcome of the awards, different ceremonies that kind of earlier this year.
00:49Sports prediction markets emerged out of the space, giving companies like DraftKings an avenue to reach states like California and Texas where sports betting remains illegal.
00:59It's going to be there first just with spreads and alternate spreads and then traditional game winner money line betting options on the NBA, NFL and college basketball in the NHL to start.
01:13So that's different from platforms like Kalshi and Polymarket, which have already expanded into other sports like boxing.
01:19And I'm told from a source that, you know, if this goes well for DraftKings, they're going to expand with more sports and potentially more options down the road.
01:27It comes after Fanatics made a similar move last month to launch specifically in states where it cannot offer sports betting.
01:34And the product looks and feels very similar to sports betting, but at a much more kind of limited phase right now comes as multiple states have threatened companies like DraftKings, companies like FanDuel, that if you offer sports prediction markets in any state, not just in our state, we might revoke your sports betting license.
01:53And earlier this week, we talked about that happening with underdog in Arizona, which lost its fantasy license for offering a sports event contract.
02:01So it seems like this kind of gray regulated industry, which looks like sports betting, but isn't technically, according to a lot of people, is here to stay right now as multiple states challenge it in courts.
02:14But, you know, those lawsuits are taking up a long time.
02:16Meanwhile, the CFTC, which a lot of companies say is in charge of this thing, really has not done much and it does not look like we'll really interfere with this.
02:25So we now have this landscape of where these companies, these sports betting companies like DraftKings are going in and launching this product, reaching states like California and Texas, again, with basically a sports book that's not regulated like a sports book.
02:40So it will be really interesting to see how this reshapes the whole industry going in the next year.
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