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SportsTranscript
00:00For those of you who are living in states where sports betting is not legal, it seems like there's some different ways that some of these companies are trying to get around that.
00:09I want to bring in Sam McQuillan from Legal Sports Report to talk about this.
00:12Sam, this is the year of discussing the prediction market.
00:16There's no question about that.
00:17It almost feels like operators are joining the space specifically to do two things.
00:24One, potentially join states that you can't bet legally in.
00:27And two, maybe even sort of backdoor the taxes that you have to pay of being a sports betting operator.
00:34So I think we're just scratching the surface of this.
00:37And it seems like a lot of companies are watching some of these others as to whether or not they're able to operate.
00:44And if they do, they're starting their own.
00:48Yeah, I'll leave the intent of that up to them, up to other people to decide.
00:52But there's no question that that very reason you're talking about is what's raised flags with operators now in three states.
00:59We have Massachusetts just yesterday, less than a week after New Jersey and Nevada.
01:05All three states have now taken some action against these prediction markets, which are being offered by Robinhood and Calshi, specifically on March Madness.
01:13But other things now as well, which we've talked about time and again on this show, essentially allow you to buy in on the stake of something happening, sort of like a stock market.
01:22They want to function like they're not sports gambling, but they are very much catering to the same audience that attracts sports bettors.
01:30And to your point, Craig, that means being available in states where sports betting has not been legalized, bypassing essentially years of state law.
01:38And I mean, it took forever just to get sports betting legalized.
01:41Now you have these companies basically entering immediately, flipping a switch, taking millions of dollars on March Madness.
01:48And in New Jersey, that's what set off the red flag there.
01:50They're hosting the Sweet 16 in New Jersey.
01:54So you're not allowed to bet on college events in New Jersey that take place there.
01:58But if you're wagering on these prediction markets, you're essentially betting on it, even though they're not calling it betting.
02:03Now, it's a very, very murky space, to your point.
02:06This is not the last we're going to talk about this.
02:08This is probably going to be the biggest story of the year.
02:10I wouldn't be surprised if this ended up in court and even the Supreme Court at some point, because you have these companies like Robin Hood, which are huge entities, say they want to be regulated federally.
02:19The states are now saying, wait, no, we think we should regulate you.
02:22So when you don't know who regulates you, you go to the courts and you try to figure it out there.
02:26But in the meantime, they're offering these markets.
02:30They're taking millions of dollars.
02:31And to your point, they're not paying the same taxes.
02:34A lot of critics are saying that they are not doing the same guardrails.
02:37There's no safe betting monitoring because they're not calling it betting.
02:40So it's going to lead a bunch of different crazy ways.
02:44We'll be here to follow it all.
02:46But now already three states taking action against them.
02:49It's starting to mount the momentum against them.
02:52We'll see how it shakes out, what pushes the other way.
02:55There's a federal roundtable that's going to be discussed later this month to essentially try to figure this out, get on the same page.
03:01But even then, it's going to be a really long story of who does this?
03:06How do we figure it out?
03:07What is this even?
03:08But millions of dollars at stake.
03:10So it's definitely something we're going to be paying attention to.