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SportsTranscript
00:00As we've talked about here on the show, for people unfamiliar, the state of Nevada does not want prediction markets in their state, and they don't want them in Las Vegas.
00:07They certainly feel like they're skirting around some of the rules, regulatory advisories, and also, of course, tax money.
00:15So that's what they feel, but it doesn't feel like the state of Nevada is in agreement with that, because as of right now, it feels like these companies are still going to be able to operate.
00:25Yeah, it's no surprise that Nevada took action against basically what they see as a new form of sports betting operating under a different name.
00:34They did it with fantasy sports. They even have been very resistant against online sports books, you know, taking away from their in-person betting operation that really runs the city.
00:43But you now have six states, Maryland, Illinois, Ohio, Montana, Nevada, and New Jersey have all sent cease and desist letters to these platforms, asking them to stop operating, telling them that this is unlicensed sports betting.
00:55Kaoshi and these prediction markets actually got their first win in what is expected to be a really long legal fight here.
01:01A federal judge in Nevada granted them what's called a preliminary injunction.
01:05So Kaoshi, when they were told to stop offering these platforms, filed a lawsuit in Nevada.
01:11The judge said, we're going to allow Kaoshi to continue doing this while the lawsuit plays out, which is really major news here for a state like Nevada, which pretty much thrives off of legal gambling.
01:22The judge came out here and said, you know, because the CFTC, which Kaoshi contends is the one who should be governing this, not the states, because the CFTC hasn't come out and said, you know, yeah, we shouldn't be governing this.
01:37They've essentially been quiet on the issue. They're going to allow them to continue to proceed.
01:41It's worth noting that Kaoshi got in a fight with the CFTC a few years ago about prediction markets on the election.
01:49They lost, the CFTC lost that fight, allowing Kaoshi to persist and offer these markets.
01:54So the previous CFTC regime wasn't very kind to them, even though they ended up losing.
01:58The new CFTC regime has been much more favorable.
02:02One of Kaoshi's key investors is the president's son.
02:07So that plays a factor in this as well.
02:09And the acting director has come out and said, we want to provide a framework for this to exist and to be regulated.
02:15We still haven't had much development in that actually happening.
02:19They have been saying they're going to have a round table where they're going to hear everyone talk about the issues and gather feedback.
02:25But that still hasn't happened. We don't know when that's going to happen.
02:27So it's kind of in this weird landscape right now where we're seeing now six states take action, Kaoshi firing off with lawsuits and then federal judges having to figure out whether or not they're going to allow them to proceed.
02:37But I would imagine, you know, if this happens in Nevada, you know, New Jersey, there's a lawsuit as well.
02:43If judges keep saying we're going to continue to allow them to proceed while these lawsuits play out, it's going to be great for Kaoshi.
02:49It's going to be great for Robinhood to continue taking these wagers and that will really maybe push the industry to take even more action and try to unite a coordinated push against what they see right now is kind of an infringement on their business where they don't have to pay the same taxes.
03:03They don't have to pay the same fees, but it's going to be a very, very long legal fight and definitely not the last we're talking about these prediction markets.