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SportsTranscript
00:00Certainly, we've seen a lot of cease and desist, some companies winning, some companies losing.
00:04And the bottom line is we're just in a new world of sports betting with these prediction markets, companies finding different ways to offer possibilities of predicting the future.
00:14They don't call it sports betting, although it's very similar.
00:17And based on the numbers here that I'm reading from this article over at Legal Sports Report, specifically from this company, Kalshi, that's been very successful,
00:24I would assume, Sam, that they're going to continue to fight to operate because there's just too much money to go around.
00:31Yeah, that's exactly been the case here, Craig.
00:33We're talking about these prediction market trading platforms like Kalshi, who has partnered with Robinhood, like Crypto.com, a bunch of other websites,
00:42which started doing this in January ahead of the Super Bowl, getting ready to offer markets on whether or not one team would win or lose a particular matchup.
00:51That kind of drew some scrutiny and ruffled some feathers, but they had a lot of success doing it then.
00:57And they rolled it over to March Madness and really haven't been stopped on any actual level that's going to enforce them.
01:04And what happened with March Madness and Kalshi, they took over half a billion dollars on the men's and the women's tournament combined.
01:12So a ton of money. And instead of people actually just betting on the outcomes of things, users are buying and selling contracts on the outcome of the sporting event.
01:22So they're describing it as event trading. But for many states, to your point, Craig, that looks an awful lot like unlicensed sports betting.
01:29They're doing this basically in 50 states right now without any sports betting license, without any fees, without any consumer protections.
01:36So the money that they took on the tournament is actually about 16 percent of the entire amount of handle that the American Gaming Association estimated was going to be bet on March Madness.
01:47So it's a colossal amount. It's about 34 times the amount that they took on their next closest prediction market, which is cryptocurrency,
01:54and about 15 times more than they took on the Super Bowl.
01:57So it's been very fruitful for them on that front.
02:00Many sports books have also come out and reported figures.
02:02Now, it might be a little bit different than the sheer volume Kalshi is taking, because in this case, sometimes you can have users buying in or buying out of a contract.
02:12So some of the money in there could be, you know, I'm wagering on this team, but I want to buy out of that position.
02:17So that still counts towards the total handle.
02:19But it's still more than FanDuel, more than DraftKings took.
02:22And it would also be silly to pretend that a lot of this isn't coming from states that don't have legal sports betting options.
02:28There's still about 12 without any real sports betting options.
02:32Florida as well only has the one sports book.
02:34So I'd have to imagine a lot of volume comes from there.
02:37And unlike traditional sports books, where a lot of time the outcome is reliant on who wins a matchup,
02:44you know, we certainly have talked about a streak of favorites winning not only in the NFL season, but with March Madness as well.
02:50With these prediction market platforms, they're basically pitting users against each other, functioning as an exchange.
02:56They make money off of the trading fees that happen as opposed to the actual outcome of an event.
03:01So it wouldn't be crazy to say that perhaps they could have weathered this very chalky March Madness tournament better than some of the sports books and even taking more money than some of them.
03:11So, you know, going forward, it's going to be a really major issue.
03:15We're going to continue to talk about in terms of, you know, these new platforms that have popped up.
03:20And we'll get into a little bit right here about what is happening on the regulatory and legal level beyond just the sheer popularity that we're seeing with these platforms.