00:00National Basketball Association about a week and a half ago saw one of their players with a very
00:04small, albeit minuscule, honestly, ownership in prediction markets. That was Giannis Antetokounmpo.
00:12And then the questions started to rumble. Will the NBA get deeply involved with prediction markets?
00:20I still don't know the answer, Sam. Do you think you have any clarity on this yet?
00:26Yeah, to your point, Craig, that it's been hard for us to avoid talking about prediction markets.
00:31That's kind of the case with the leagues right now, certainly the NBA. You know, this past year,
00:36they actually were among several leagues that wrote a letter to the CFTC that warned that prediction
00:42markets lack the safeguards that their sports betting partners have, you know, things that monitor games,
00:49any suspicious betting because they're fundamentally regulated by the CFTC, which has pretty much been
00:56understaffed for the past year. A lot of people questioning if there is actually a regulator at
01:01the CFTC policing all this stuff, which is certainly booming. But it's been hard not for the leagues to
01:06mention them because they're booming and they're such a hot topic right now. And, you know, this week,
01:11Adam Silver coming out acknowledging Giannis Antetokounmpo's ownership stake in a prediction
01:16market, basically saying he's treating it as a gambling company, which, you know, until recently,
01:22players were banned from owning any stake in gambling companies. They actually changed the
01:27collective bargaining agreement a couple of years ago to allow players to own gambling companies.
01:33That was probably because they already let team owners have stakes in gambling companies. So
01:38there was kind of, you know, a calling in the player community to equal the playing field there.
01:44But Silver's stance on prediction markets certainly seems to be different than it was a couple months
01:49ago when, you know, the league was telling the CFTC to do something about them. He said they're
01:54monitoring them. You know, it's certainly a really interesting space. They actually invited members
01:59of Kalshi and Polymarket to a tech summit that they had over the weekend. So that's a big change from,
02:05you know, we're not getting involved in prediction markets. Now we have some of the,
02:08you know, their executives at our biggest stakeholder conference. Sportsbook executives were there too.
02:13It was invite only. So we don't know exactly what was talked about, but, you know, definitely a sign
02:17that they're more on board with them. You also had the NFL come out recently as well at Super Bowl
02:23on Radio Row. Jeff Miller, who's their spokesperson, basically called them an interesting fan engagement
02:30tool, said it could be, you know, a good opportunity for the NFL to explore. That's also a sharp, you
02:35know,
02:36pivot from what the NFL had said to the CFTC a year ago when it said it was troubled by
02:41the massive
02:41expansion of these prediction markets that don't have the safeguards that fall outside of state
02:46jurisdiction and purview. And then the MLB, you know, recently as well, Manfred at those owner
02:51meetings recently came out and said he actually briefed teams on how these work. He views them as
02:57an interesting tool they can maybe use to better monitor betting and integrity, you know, issues
03:04within the league. Obviously, the MLB has dealt with its own betting integrity issues with the,
03:08you know, the recent Cleveland Guardian scandals, which we continue to learn more about by the day,
03:12but, you know, not kind of lost in this whole story or picture development or whatever you want
03:17to call it, is the CFTC came out just this week and said it's going to fiercely defend the legality
03:23of prediction markets, which is a sharp turn from just, you know, a couple months ago when we had
03:28no commissioner at the CFTC, when the CFTC basically was not doing anything about prediction
03:33markets. The incoming commissioner, Michael Selig, said he'd probably look to the courts to figure all
03:37this out and have a hands-off approach. But, you know, he came out with an op-ed this week,
03:41said he's going to fiercely defend it, said he's going to stop states from trying to, you know,
03:45stifle these innovative products. He mentioned them as a great resource for everyday Americans to
03:52hedge risk against the weather and climate. He actually didn't mention sports at all, which is,
03:56you know, the big kind of the big issue here. It's why 30 states are enjoined in lawsuits trying to
04:02stop what they call illegal sports gambling that infringes on their rights. And it makes up about
04:0886% of Kalshi's total platform volume. So really notable that he didn't mention the sports,
04:13but he signaled that he's definitely trying to defend prediction markets. So I think what we have
04:18here is kind of similar to what happened with sports betting back in the day. You know, the leagues
04:22had sued to stop New Jersey from legalizing sports betting. They said that was going to be a huge
04:27integrity risk. And then eventually, you know, they got on board. Adam Silver wrote an op-ed in support of
04:32sports betting famously at the time. And now the leagues obviously make hundreds of millions of
04:36dollars from their sports betting partnerships. So this could be a similar kind of development
04:40where, you know, once it's going to become legal, once it looks like everyone is going to inevitably
04:45get on board, the leagues are going to kind of pivot and say, oh, well, you know, now maybe we're
04:49happy to embrace them and definitely happy to take the money as well. But it's obviously developing
04:53circumstance. We'll see what happens with all the court cases. Eventually, if it goes to the Supreme
04:59Court, I would be surprised if leagues don't continue to kind of soften their stance and
05:03inch more in support of prediction markets. But we'll have to see.
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