00:00I would say that Illinois is one of the more interesting states as well, because certainly they get so many
00:05people in Chicago and close by betting on sports.
00:09And certainly what they want to do is tax sports betting, and they've accomplished that.
00:14And I know they even raised the tax in the past, but now prediction markets are coming into play.
00:19And I'm not sure about fantasy sports, honestly, Sam.
00:22I don't know why fantasy sports is lumped in with prediction markets and sports betting, considering fantasy sports is a
00:28much smaller number.
00:29But you tell me, do you think that this is realistic here for something to pass in Illinois?
00:33Because it seems like whatever they want in that state, they get passed.
00:38Well, with regards to passing it, that part is done.
00:41The new budget has been sent to the governor.
00:43It's already set to take effect in July.
00:46The $56 billion budget.
00:49So to answer your question why fantasy sports are getting lumped in, I think anytime you're trying to raise $56
00:53billion, look for any way you can do that.
00:57The fantasy sports part of it is going to tax fantasy sports operators about 1.75% of the revenue
01:04they make on daily fantasy sports.
01:06So it's not that much.
01:08It's about $6 million of, again, the $56 billion budget.
01:12It just kind of got lumped in.
01:13I would say it was probably something easy for them to do.
01:16There's not much resistance.
01:17Like you mentioned, it's not a huge kind of industry at this point.
01:20So a lot of the focus lobbying-wise is on other stuff like sports betting, where Illinois has passed a
01:26number of tax increases.
01:27And now in this budget as well, a large majority of that money they're attempting to raise over the next
01:33two years is from a potential tax on prediction markets, which is obviously complicated.
01:38Because you have, you know, over 20 lawsuits happening right now between prediction markets in states, the CFTC involved as
01:46well.
01:47Essentially prediction markets saying we don't have to follow any state laws, any state rules, because we're solely regulated on
01:54the federal level.
01:55The CFTC is the only one basically who gets to tell us what to do, who gets to impose new
02:00rules like the one Illinois is trying to pass.
02:02So whether or not this actually gets paid is a different story.
02:06It has been passed.
02:08What's probably going to happen now is there's going to be another lawsuit where companies like Kalshi, Crypto.com, Robinhood,
02:15who are already in legal battle with Illinois, filed to stop this tax from being implemented.
02:19And then eventually, maybe it all gets figured out by the Supreme Court someday.
02:23Now, if the Supreme Court eventually does rule that states actually do have the authority and power to tax and
02:30regulate prediction markets, just having this law on the book in Illinois would help the state easier kind of flip
02:37that switch if and when that eventually happens to be able to tax them.
02:42But I would look at it from a bigger kind of higher level thing of just another instance of states
02:48trying to take measures to impose their jurisdiction over prediction markets.
02:53You know, obviously, they're arguing that this is basically sports betting that's bypassing our laws.
02:57So bypassing more laws to kind of regulate it.
02:59I think they're trying to, you know, solidify the position to eventually one day maybe rein in this industry.
03:05But if they lose that battle, we can see this law repealed and taxes not paid.
03:09So it's a lot of if, you know, maybe we don't know what's going to happen with this industry right
03:14now.
03:14But certainly it's catching a lot of action of states, especially Illinois, which, again, you know, is lawsuit with Kalshi,
03:20lawsuit with the CFTC.
03:21And I wouldn't be surprised, Craig, if more states try to do this kind of proactive passing of attacks while
03:28the court cases play out.
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