00:00All right. The CFTC initiating some action against some of the states that don't want
00:05the prediction markets operating there. And so we're getting some landmark movement here
00:10in legislature. You can read all about this over at legalsportsreport.com. But Sam, if this ends up
00:17coming to fruition, this is a very big win for the prediction markets if they reverse
00:24some of these dealings by the states. Yeah, so far in this kind of prediction markets versus
00:32sports books versus states, whole legal battle, which spans almost 20 cases, it's really been
00:38Kalshi and Polymarket versus the state gaming regulators. But yet for the first time just
00:43late last week, the CFTC, which is the federal agency that says it's supposed to be the one
00:50regulating sports prediction markets, they came out and they sued Arizona, Connecticut,
00:54and Illinois, which are notably just three of the many states that are suing Kalshi
00:59and Polymarket to stop them from operating. CFTC basically trying to assert its exclusive
01:04federal jurisdiction over these markets. It's arguing that these are federally regulated
01:09derivatives, while the states are arguing that those are actually just sports betting products
01:15indistinguishable from what their laws say they can offer. They have to pay taxes, they
01:19have to follow their rules, etc. So it's notable that this is really the first time we've seen
01:24a federal agency get involved in a case like this. It's really only been companies versus
01:28the states. The CFTC is now kind of trying to defend its jurisdiction going forward. Certainly,
01:35you know, we have no idea how this is all going to end up with a myriad of cases. We
01:39just had
01:40New Jersey ruling in favor of Kalshi in a two to one split decision, basically allowing the product
01:45to keep existing in New Jersey while these court cases unfold. States have largely won most of the
01:52other cases about 14 out of 16, at least in the initial early rulings part where basically a state
01:58is trying to stop them from currently operating while the cases play out. So that's a long way
02:03of saying this will all probably be decided by the Supreme Court eventually, maybe in a year,
02:08maybe in two years. But now that the CFTC is, you know, going on the aggressive launching its own
02:12lawsuits, it kind of changes the dynamic a little bit and really shows that they're aligning themselves
02:17with these sports prediction markets. And I'll also note too, it's pretty interesting to note that
02:21these three states out of the, you know, 17 or 20 suing, all Democratic governors and all states
02:27have taken action against these prediction markets. Obviously, the new regime in the White House has
02:32been very pro prediction markets, opposite of kind of the previous regime. So probably a lot more
02:37legal fees and lawyers on the way, but we'll keep monitoring it.
Comments