00:00News of the industry.
00:07Okay, news of the industry.
00:09Connecticut's in the news.
00:10Actually, for doing something positive.
00:14A judge has rejected every major Calci argument in a comprehensive ruling against sports contracts.
00:24A federal court in Connecticut denied Calci an injunction that would have protected it from enforcement from the state gaming
00:31board in Connecticut.
00:33This is interesting now.
00:36Rejecting every argument on almost every possible question in one of the most comprehensive rulings against prediction markets to date.
00:45U.S. District Court for the District of Connecticut on Monday denied Calci an injunction that would have protected it
00:52from Connecticut's enforcement wing for claiming that sports contracts are sports gambling.
00:59The two main questions, like other state versus prediction market lawsuits, are whether or not the Commodities Exchange Act, CEA,
01:07preempts state gambling laws.
01:09And if it does, whether sports contracts, sport event contracts, can be classified as swaps in order to be covered
01:16by the preemption.
01:18Calci argued yes to both, and it needs to win both to win an injunction to shield it from enforcement
01:24from Connecticut's gambling wing.
01:27A court ruled against Calci on one argument.
01:30It wouldn't need to find the decision on the other.
01:34Yet the judge, Vernon D. Oliver, ruled against Calci on both arguments, even noting that he did not need to
01:41make a decision on both questions in order to issue an opinion.
01:45Even within each question, Judge Oliver found multiple reasons to side with Connecticut over Calci.
01:52Does this change anything?
01:54Well, it's just another story in the long list of losses for prediction market companies against states.
02:02Novig sued Massachusetts yesterday in a lawsuit that looks very similar to other prediction markets because Novig is now a
02:1250-state prediction market company, and Novig would like to be able to operate in football season.
02:19So what Novig did was they sued Mass preemptively because they knew Mass would come after them, and so now
02:25it's at least 90 days until their court case is going to be heard with the lawsuit against Massachusetts, which
02:33means they're going to be able to operate in the state for most of the NFL football season, and that
02:39is what they are looking for.
02:40They sued four other states, I believe, or three other states that they sued as well for the same purpose
02:45because you can have a football season and make a lot of money right now in the prediction market space,
02:49and if you lose, you lose, but all the prediction market companies, DraftKings and FanDuel included, are all tied together
02:56with this about whether or not they can offer sport event contracts.
03:00Prediction markets are not going away.
03:02I think that needs to be pushed really heavily by a lot of people because I think there's a question
03:11about all prediction markets.
03:14That's not the case.
03:15It is only the sport side of things.
03:18It is not all.
03:19Whether you want to bet on the price of soybeans or you want to predict the weather in California, those
03:25things will exist long after this fight.
03:28It entirely comes down to whether or not you can bet on the Red Sox and the Blue Jays game
03:34tonight, on Koushi, on Polymarket, on Novig.
03:38That is the conversation.
03:41Once that's done, those companies can still operate, and I think that's why you've seen DraftKings and FanDuel and other
03:49big sportsbook properties go ahead and launch prediction markets because they're going to be available for people, and they won't
03:55be bet like they are now,
03:57but they'll be available for people to wager on those markets, elections, as long as those aren't banned, for the
04:04upcoming midterms, for the upcoming presidential election.
04:08Those are things that will happen in 50 states, and no one is going to court to stop that.
04:13No one is suing Polymarket or Koushi for anything other than stopping them from offering sport event contracts.
04:21Those swaps is what everybody wants them to stop offering.
04:26It's 90% of the handle.
04:29So clearly, the business goes away, and clearly, the overall evaluation changes dramatically, but Koushi is not going away.
04:39Now, they're going to have to find different things to offer, but they're not going to be out of business
04:43per se.
04:44So I think that needs to be talked about a lot more because I think there is this level of
04:49like, Koushi is going to disappear.
04:51When the Supreme Court takes the case, Koushi is going to disappear.
04:54That's not the case, okay?
04:56These guys are too big to fail.
04:58They aren't going anywhere.
04:59The question is going to be, what are they allowed to offer?
05:04Period.
05:05What are they allowed to offer?
05:07And if they're allowed to offer what they currently are offering, okay, that changes a lot.
05:13But if they lose sports, you're not going to see the advertisements.
05:17You're not going to see anything.
05:19I read an article this morning from Jay Snowden of Penn, who believes that this football season is going to
05:28be an arms race, unlike anything we have seen since 2017 and 2018, right at the start of legalization for
05:38sports gambling.
05:39Where these companies are trying to acquire as many shows as they can possibly acquire.
05:45It's kind of funny.
05:46No one's called my number yet.
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