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00:00Let's get started with the sports betting topic of the day, which is the first person
00:04sentenced in that NBA scandal involving Terry Rozier way back when. Timothy McCormick, a
00:11self-proclaimed gambling addict, he got a two-year prison sentence Wednesday. He's the first
00:15defendant to be sentenced for his role in the conspiracy involving Rozier and to some degree
00:20Jonte Porter. Federal judge in Brooklyn handed down the sentence to McCormick. He defrauded
00:25sports betting platforms by using non-public information to place bets. Naturally, this
00:30is frowned upon and to the point where you're going to get a prison sentence. No one else
00:34has been sentenced yet with this investigation still ongoing. In baseball last night, the
00:39New York Mets have had a peculiar offseason, but it's looking better and better by the
00:42day. Just 24 hours after acquiring Luis Robert to play center field for them for the foreseeable
00:48future. They also made a trade yesterday with the Milwaukee Brewers that gives them a front
00:51end starter. They end up getting Freddy Peralta, one of the aces or ace of the Brewers, depending
00:57on how you look at it, giving up a couple of prospects in return, including Brandon Sprout,
01:01very young, nice, up-and-coming prospect for the Mets. Of course, a lot of discourse back
01:05and forth from Mets fans, Brewers fans. Some people think they gave up too much. Some people
01:08think they gave up too little. Regardless, the Mets have now added Bo Bichette, and they
01:13have added Luis Robert, and they've added Freddy Peralta over the past week. So they're offseason
01:17looking a lot better. Brian Flores, defensive coordinator of the Minnesota Vikings, is waiting
01:22to see if he gets a coaching opportunity on the head coaching side. If he doesn't, he
01:26says he will return to be the defensive coordinator for the Minnesota Vikings moving forward. Still
01:33TBD, though, on that. How about Eric Bien-Ami? Left for a hot minute. Kansas City now is headed
01:39back. He's going to run their offense. And Andy Reid, once again, Zach Robinson is going
01:43to be the offensive coordinator of the Tampa Bay Buccaneers as they were looking for a
01:48new OC after firing their OC this past offseason. And how about this one? John Lynch, the general
01:53manager of the San Francisco 49ers, with his year-end press conference, seemingly pretty
01:58unhappy the way things went down with Brandon Ayuk, who did not play a down for them this
02:02past season and may not ever play a down for them again.
02:06You know, the plan in terms of the transaction, that will come in due time. I think it's safe
02:10to say that he's played his last snap with the Niners. It's unfortunate, you know, a situation
02:18that just went awry. And, you know, I will look long and hard at, you know, what could have been
02:25done differently, but sometimes it just doesn't work out. And I think that this was a case where
02:30that happened.
02:31I think that's fair to say. How about Shea Gilgis-Alexander, still the favorite on FanDuel
02:36to win the NBA's MVP, although Luka Doncic is gaining some ground. Maybe after last night,
02:41some separation. 40 points last night for SGA. 11 assists. Thunder were 11.5-point favorites.
02:47Who did they beat? The lowly Milwaukee Bucs. That's kind of hard to say in this day and age,
02:52but that's where they are. Giannis did his best. 19 points, 14 rebounds, 7 assists, but the Bucs
02:58still lost by 20. Is there an exit coming for Giannis? That still remains to be seen.
03:03But in the meantime, he says, working hard.
03:06We're not playing hard. We're not playing hard. We're not doing the right thing. We're not
03:10playing to win. We're not playing together. Our chemistry's not there. Guys are being selfish.
03:19Guys are trying to look for their own shots instead of looking for the right shot for the
03:23team. Guys try to do it on their own. A lot of times, I feel like when we're down 10,
03:35down 15, down 20, we try to make it up in one play. It's not going to work. We just
03:39got to keep on chipping away, possession by possession, especially when we're playing
03:44a team like OKC or a team like Minnesota or a team like San Antonio. Overall, Russell
03:50Wise is better than us. So you got to know that you got to compete for 48 minutes and
03:55try to get the best shots available for 48 minutes. And if you don't do that and you
03:59try to get the first shot available on one pass shot, it's not going to work with those teams.
04:04Last night, also in the NBA, largest victory in the history of the New York Knicks. That's
04:12a big one. 120 to 66. Doesn't look right to me, but that was the final score. They beat
04:17the Nets. Knicks were 12 and a half point favorites. They won by 50. So they got the job done. 66
04:23points, by the way. Fewest scored by an NBA team in a single game since 2017. Let's focus
04:29on the good. Here's Jalen Brunson on the victory. We just had to refocus and get back to who we
04:34are. And this is a good set for us. But we got to continue to press the issue of getting
04:40better every single day. What do you think the key was to refocusing? Just sticking together,
04:45talking it through, having each other's backs, worrying about the little things on the court.
04:52I mean, not just like obviously the stats and all the other stuff. Just like the stuff that
04:59doesn't make the stats cheat, the stuff that actually makes a difference in a close game
05:02that can break teams. And so that's what we got to continue to focus on.
05:06We can have positive energy. So I believe in the players. I believe in the coaches. And
05:11this doesn't stop the plan that we have. It's just, you know, obviously a tough experience
05:17to go through, but we'll be better. Me, the first one.
05:21Only one way to go. That's up for Brooklyn. After last night, Jalen Brown, 30 points, 10 rebounds.
05:28As Boston beats the Indiana Pacers and covers the 10 and a half point spread, 119 to 104.
05:34Austin headed toward the playoffs. Indiana now 10 and 35 without Tyrese Halliburton this season.
05:39Joe Mazzula never seemingly very happy after a win, but did have some positivity for his team.
05:45You know, to the point that we always talk about, you know, tomorrow in film, we shouldn't know whether
05:50we won or lost because we can clean up a bunch of stuff, you know, and, and, you know, there'll be
05:5610, 15 possessions that we know we can get better at. And I think when you can say, hey, these are the
06:01things that we have to get better at here, the things that we will, it gives you chances to kind
06:04of win games in different ways. And so I think it's a credit to the guys and their mentality being able
06:08to impact the game in different ways. Like tonight, you know, Nimi had five blocks. So he did a great job
06:13protecting the rim for us. I think his growth defensively is helping us get better. So we
06:18just have to keep it in that, you know, tomorrow in film, you know, we shouldn't know what the
06:22result was. We should get better at those possessions. They had made more threes percentage
06:27wise. And, you know, we just, we had some opportunities that didn't go in and it, it just
06:36kind of, uh, piled on in a couple of stretches. Um, but second half was much better and the
06:44guys stuck with it, got it down to nine at one time. And so there's some, there, there
06:50are some positives, um, but we're trying to win the game. So
06:53Cavs win 94 to 87 over the Hornets. They cover the three and a half points. By the way, how about
07:00this stat? LaMelo ball for the Hornets. Oh, for 10, three point shooting yesterday. Again,
07:07like Brooklyn, only one way to go up. Speaking of up Arizona, still the number one team in the
07:12country won easily last night. Keep blowing everybody out last night. Cincinnati took it
07:1677 to 51 wildcats, 13 and a half point favorites, 19 and Oh, on the season, looking for 20 later
07:23this week. Here's Tommy Lloyd on a team that appears to be unstoppable so far. I mean, I
07:29think we hung with it and maybe warm out a little bit. You know what I mean? I mean, that's the
07:33hope. I mean, you know, I mean, I don't know what their response would be and I haven't watched
07:37the film. So, uh, yeah, I think we just hung with it. And I thought Toby and that stretch
07:41early in the second half, you know, got some offensive rebound putbacks when we had some
07:45kind of big moment, kind of momentum type, you know, either half court execution or transition,
07:52you know, layup attempts that missed. And I think he was there to kind of pick it up and put it in
07:57a couple of times in a row. And then that really kind of got us going.
08:01Also in college hoops last night, Nebraska matched Arizona. They're 19 and Oh, also number 17 in the
08:07country beat Washington by 10. They were 11 point favorites. So didn't cover that. Uh, also Notre
08:11Dame man, ton of injuries for the Irish and basketball this season. I don't think they're headed
08:15toward any post season. North Carolina dismantles them 91 to 69. Always great to catch up with Dan
08:21Wallach covering this latest on prediction markets. That's part of Dan's operation here. By the way,
08:26you could listen to their great podcast, Dan Wallach and Dan lost on conduct detrimental,
08:31which I'm sure is breaking this all down constantly. It is, it was the big story, Dan,
08:35uh, these prediction markets of 2025. And here we are in 2026. We're right there as well. Great to catch
08:40up with you. Let's start off with the story that you're covering even currently as we speak here.
08:44And I know there's news too. You can tell us more about it. Uh, it does appear that
08:48Massachusetts wants Calci and these prediction markets out. And this is a big state to take
08:57that leap here. And thus far, I know, uh, Calci wants to fight back. They want to stay alive in
09:01this state. And the reason why Dan probably isn't so much about Massachusetts, it's that they probably
09:06think everybody else is going to follow suit if they end up winning this. So what's the very latest?
09:10Well, we're up to 12 lawsuits now, but the trend line is now favoring the state governments. The
09:15last six decisions that have been issued by federal courts as to whether these prediction
09:20markets are allowed under federal law, they've all gone in favor of the states. And it all began back
09:25on, on, on August 1st, when the Maryland federal court, uh, denied Calci a request for a preliminary
09:31injunction. Several other states have since followed suit. Nevada, but Massachusetts is the latest one,
09:36but it is the first state in which an injunction has been entered against Calci to bar Calci from
09:42offering event contracts in, in, uh, Massachusetts going forward. And I think this is the, uh, this
09:48could be the pivotal decision because it provides other states now with a roadmap with what the other
09:53states have been doing. Neglectfully has been giving Calci an advanced notice, a cease and desist
09:57letter, which has allowed Calci to jump the gun, file lawsuits in federal court and frame the issue
10:04around jurisdiction. Whereas Massachusetts just went for the jugular, no advanced notice,
10:09no cease and desist letter, filed the lawsuit in state court and focused on the legality of the
10:16underlying contracts under state law. And that was the secret to the success in Massachusetts. And I
10:22think it may provide a blueprint for other states going forward. So, so Dan, you know, simply put here,
10:28and it's more probably of a prediction, no pun intended than anything else. Uh, I mean, I just
10:35don't see why prediction markets can't live in the United States and abroad, if they chose to go the
10:41same route as the sports betting operators, which is basically go under regulation, pay some taxes,
10:47et cetera. Do you think inevitably that's where we are headed? Isn't there enough money for everyone
10:52in this industry, or are they just going to continue to try and operate like this and,
10:56and simply put, just do things differently than the betting operators?
11:00Well, they don't want to be licensed, Craig. And that's, that's the heart of the matter.
11:03They want to bypass state regulations and operate without having to pay license fees,
11:08without having to pay state taxes, without advertising restrictions. And crucially,
11:12they, they market their product, uh, to those 18 years of age and over, and they market it as a
11:17financial product. The moment, uh, that they, um, you know, deign to be licensed by a state gambling
11:23agency, they're all but admitting that what they're really offering is gambling. And aren't
11:27they admitting that anyway, through their marketing materials, but, um, the, the barriers to entry in
11:32states are, are kind of vast. In New York, there are only nine operators and that's set by law.
11:37In New Jersey, you have to be aligned with a racetrack or a casino. And in Florida,
11:42you can only go through the Seminole tribe. So, uh, they may not necessarily have an easy path to
11:48entry in certain states, uh, but their business model is predicated on being an exchange and not
11:53having to pay the onerous regulatory costs, licensing fees, or taxes without, with, without
11:59the federal scheme of regulation that doesn't really exist over sports. They don't really have
12:05anything. And this isn't an attack on prediction markets overall. There are plenty of other prediction
12:11markets, elections, weather, economic conditions, politics, uh, the full range of it. Sports has
12:18always been sort of the prerogative of state governments and Congress has long recognized
12:23that states should have a free hand in determining whether and how to regulate the conduct of sports
12:30wagering within its borders, not just outside of CFTC regulated exchanges. Uh, sports betting has always
12:37been, uh, a major issue for Congress. And with respect to gambling, uh, legislation, Congress has
12:44always spoken clearly, expressly, explicitly, never with ambiguity, which is what the prediction markets
12:52are basing their entire legal argument on. Nevada is another state, Dan, that, you know, certainly is not
12:59going to play around here. And, you know, we've seen different operators pull out of Nevada for the simple
13:04reason of what you just described. So what is the latest here? I know that this isn't Calci. This is
13:09Polymarket involved in this, uh, suit with Nevada. Can you catch us up on their situation?
13:16Yeah. Polymarket just entered, uh, the sports prediction market space. They had a little bit of a delayed launch.
13:21They went live, uh, recently. And the reason why Nevada was the sort of the first jurisdiction to go after
13:27Polymarket is that Nevada has the, uh, the tailwind of a favorable court ruling in its favor. The Nevada federal
13:33uh, district court over a span of two months in October and November issued three rulings against
13:39crypto.com, against Calci and against, uh, Robinhood declaring that federal law does not, uh, displace
13:47state sports laws. And with that, with that, with those trio of rulings, uh, Nevada had a clear path
13:53to sue Polymarket directly in state court to seek the same kind of relief, a preliminary injunction and a
13:59TRO to force them out of Nevada that, that Massachusetts has just obtained in, in the
14:04Commonwealth against Calci. So you're going to see more of these quick strike lawsuits by states like
14:09Nevada and Massachusetts and surrounding states, which can benefit from some of these favorable
14:14court rulings. And the big battleground going forward is the Ninth Circuit U.S. Court of Appeals.
14:19There are four appeals involving those three Nevada cases and the California tribes. And the battle right
14:24now is over whether Calci and these other companies can get a stay to permit them to continue to
14:31operate in, in, in, in Nevada. If the Ninth Circuit denies the stay, uh, Nevada will become the second
14:38state that Calci will have to exit. And it could start a feeding frenzy from some of the other states
14:43within the Ninth Circuit, such as California, where the tribes are influential, Arizona, Oregon,
14:49and Washington states. So the Ninth Circuit decision, not just on the appeal, but on the, uh,
14:54imminent ruling on a motion for a stay pending appeal that will determine how quickly Calci may
15:01have to exit, uh, as many as four or five states within the Ninth Circuit. So 2026 could be a, uh,
15:07a big year, uh, for some of the state governments if the, if the decisions keep going in the state's
15:13favor as the last six have. Hmm. Dan, we'll, uh, catch you on the podcast, Conduct Detrimental.
15:20We always appreciate you making appearances with us. And we, uh, would say, don't be a stranger to
15:25this show because you do a fantastic job breaking it all down for us. Thanks again for coming on.
15:29I'll see you soon. My pleasure. Thank you very much for having me back on, Craig. It's always a
15:33pleasure to be the emeritus, uh, legal analyst.
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