00:00All right, let's start off in the state of Illinois. You can read this article over at
00:04legalsportsreport.com, by the way, a $56 million budget, new taxes, fantasy sports,
00:09and prediction markets. So am I led to believe here that prediction markets have to pay taxes
00:14now? Pat, is that what we're saying here? Or is this just something that they decided and
00:18prediction markets are going to say, no, not so fast. That's what J.B. Pritzker is hoping.
00:25This is a whole kind of pie in the sky hope for Illinois, which, you know, coming into this
00:31legislative session, I heard from a lot of sources saying, hey, we've got federal funding drying up
00:37for states. So they're going to try to come back and look for new ways to raise revenue. Of course,
00:42one of the easiest ways to do that is look at gambling. And Illinois has done that the past
00:46two years, you know, raising sports betting taxes in various forms, first creating a tiered tax system
00:52and then implementing their strange per bet fee for sports book operators. And so this year,
00:57I think they came back and they were like, all right, let's leave sports betting alone. We don't
01:00want to do that. What is out there that we can figure out in tax? And while prediction markets
01:05is the obvious one, and we know all about how state regulators and, you know, lawmakers are looking
01:10at these, for lack of a better term, unlicensed sports books is how they're viewing them and saying,
01:17hey, we got to rein you in. We got to either figure out how to license you. You can't be
01:20offering what
01:21sports books are paying a lot of money to the state for, for free for us. And so in Illinois,
01:27that's one way they're going to look at it is creating a tax system. And it is, they're hoping
01:32that the prediction markets will pay. It would generate quite a bit of revenue for them.
01:38But ultimately for right now, it's just kind of a budget list item to make everything,
01:43make the ends meet. Because to your point, so far prediction markets are just saying no to state
01:50regulators and state legislators saying, you know, we don't have to comply to your laws. We're
01:55federally regulated through the CFTC. So we can offer whatever they say we can offer anywhere in
02:00the country. And you can't do anything about it. So why would a state tax law change that? So I
02:06think
02:06what's going to happen is they'll probably sue Illinois and say, hey, we don't want to pay these
02:09taxes. So we're not going to, and you can't do anything about it. And so this is just going to
02:14add to
02:14the long list of lawsuits that prediction markets and the CFTC are fighting with states.
02:21And ultimately nothing will matter until the Supreme Court rules on what can happen. So,
02:27you know, we've seen a couple other, you know, Minnesota filed a regulatory law for prediction
02:31markets and we saw the prediction markets go, nope, we're not going to follow that for now.
02:35Right. And so we're just going to kind of go in circles, I think, for a while still with this
02:40industry. But also of note, they weirdly finally have decided on a tax rate for daily fantasy sports.
02:48And so now that there's going to be regulatory language in Illinois for fantasy sports, which
02:54there was not really before.
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