00:00So this is a very interesting story. If you are on the anti prediction market side of things,
00:05if you were on the pro prediction market side, you're going to quickly point to the third
00:10district and say that was two to one. And now we're going to the Supreme court for a layman.
00:16Where are we after this ruling from the ninth circuit? Did it change anything?
00:21It definitely changes some things. I think most importantly,
00:24does get everything closer to the Supreme court. That inevitably is where this is going. There's
00:32been so much disagreement between different courts. The Supreme court is going to have to settle
00:39whether or not prediction markets are allowed to offer sports. And, you know, initially Calci got
00:45that third circuit ruling. That was the first circuit court to make a decision. And they went
00:49Calci's way. Now we've got one that's gone against Calci, New Jersey, which was fighting the third
00:56circuit ruling has already been trying to get the Supreme court to take it up. So now that there's
01:01another circuit court going the other way, feels like it would just make a lot of sense for the
01:07Supreme court to take it up. There's, there's reasons why maybe they'll wait it out because
01:11some of this ruling depends on some things that'll become outdated. There's no doubt this is going to
01:16the Supreme court. And this gets it closer in the shorter term. I mean, it, you know, allows a lot
01:22of States covered by the ninth circuit. California would be the most notable if it happens, gives them
01:28an easier path to potentially banning Calci's sports contracts the same way Nevada did.
01:34I know this is really in the weeds, but I think it's important because your article on in game talks
01:39about the CEA, which is the act that is defining what a swap is, as you write, it's dependent on
01:48the
01:48occurrence, non-occurrence, or the extent of the occurrence of an event or contingency associated
01:54with potential financial economic or commercial consequences. It's wordy. It's really tough to
02:00follow it, but how do sports get looped into that? That's what everybody has a question as to like,
02:07wait a minute, when you start to do the research, how do we have a loophole like this where sports
02:11are now part of the CEA? Yeah. And I suppose, you know, the, that, this wording, the definition
02:18of a swap, that's, that is what it all came down to. Cause the main part of Calci's argument is
02:23the CEA says that CFTC has exclusive jurisdiction over swaps. Calci says that means state gambling laws
02:31don't apply. And the wording, there's different ways you could read it, like potential financial
02:36economic or commercial consequences. You could argue that's really broad, like anything with a
02:40potential, I mean, you know, a sports bet, you can say, yeah, that does have potential financial
02:45economic or commercial consequences. Cause you could come up with different financial things
02:50that could happen based on a sports result. And that's what the third circuit said, but the ninth
02:56circuit read it in a different context. They said, well, you know, you look at how this appears
03:01within the CEA, it doesn't make sense to read it broadly. You have to read it more narrowly and
03:06say, it's about more inherently financial events. I mean, I think in a, you know, more like real
03:12sense, if you take away like the legal sense, both sides make very convincing arguments. And I think
03:20the court has kind of just said, this is kind of clear if you read the opinion that they've gone,
03:25well, you know, CalShe's sports betting platform, this, these are a form of sports bets, even if
03:31they're different to what you might see on a sports book, and then kind of backfill the argument with
03:37what are some pretty good reasons why it might not be a swap. You know, you can, any court can
03:45go
03:45either way. And I think they, they're kind of just going off what felt right, which is they felt that
03:51sports bets on CalShe should be subject to sports betting laws.
03:56It's funny to me because I was waiting for, and you talk about common sense. So the, the, the,
04:03judges brought up the advertising for CalShe, which I think to me, I couldn't believe it took this long
04:10to get there where CalShe was advertising themselves as legal sports betting in all 50 states. They were
04:17running advertisements in Texas, Florida, in California, saying sports gambling is now legalized
04:23sports betting combat sports at CalShe. It feels like finally there was a court that went, okay,
04:31you guys are calling yourself this yourselves. How are you claiming that you're not sports gambling?
04:37Did, did it feel like we finally got to some level of common sense?
04:40I think so. Yeah. And like, cause I think it's important to understand like CalShe's argument
04:46doesn't really depend on them not being sports betting. So like the, the legal sports betting
04:52in 50 states thing isn't really like a contradiction, but I think there is just a case of, you know,
05:01if you do that, the judges are going to look for a way to have you regulated like sports betting.
05:10And there's good enough arguments that, you know, based on the wording of the CEA and the context
05:17of it, that they should be. So judges will choose that argument. It's a sort of an, I suppose it
05:25was
05:25maybe a bit of an overconfidence in their legal argument that it could, that they could call it legal
05:33sports betting.
