Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Arizona has filed criminal
Speaker 1: charges against cal She, accusing the company of operating an
Speaker 1: illegal gambling business. To Max Tim snowk joins us now
Speaker 1: with Kaushi Kofouna and CEO Tim take it away. Hi,
Speaker 1: We're joined by Tarak Monsieur. He's the CEO and co
Speaker 1: founder of Call She. Tarak, good to see you. Thanks
Speaker 1: for joining us on this.
Speaker 2: Look.
Speaker 1: Even though other state regulators have taken steps to crack
Speaker 1: down on what they say is unlicensed betting on call
Speaker 1: She's site, Arizona appears to be the first to escalate
Speaker 1: to criminal charges. What is your response to these charges?
Speaker 2: Look, I mean, these charges have nothing to do with
Speaker 2: gambling or the merits. If it was about gammling or
Speaker 2: remote they would let the judicial process fright its course
Speaker 2: in the federal courts. You know, five days ago on Thursday,
Speaker 2: CALCI filed suit against Arizona and federal courts on the
Speaker 2: mets on whether Calshi is subject.
Speaker 3: To exclusive jurisdiction of the CFTC.
Speaker 2: And you know, we're gone from an opposition and wanted
Speaker 2: to let the court process play out.
Speaker 3: And instead of letting that happen.
Speaker 2: The Arizona Attorney General decided to subvert the judicial process
Speaker 2: and weaponize it and go to state court and file
Speaker 2: these criminal charges, which you know, we view as merit
Speaker 2: lists and basis. We see this as a total overstep
Speaker 2: and we look forward to finding it in court.
Speaker 1: Well, experts are saying this could be the first of
Speaker 1: many charges such as these from other states too. How
Speaker 1: does it change your legal strategy.
Speaker 2: Well, this is the whole point of federal preemption. So
Speaker 2: this is not about camera. The charges that the attorney
Speaker 2: general filed are not about gambling, they're not even about
Speaker 2: sports only. They're about prediction markets writ large. It's just,
Speaker 2: you know, attacking the entire business model. And nothing prevents
Speaker 2: from the same attorney general or others from fighting the
Speaker 2: same criminal charges against derivatives markets writ large. They could
Speaker 2: file the same exact charges under the same analysis against
Speaker 2: CME or Ice or NASTAC. And that's the whole point
Speaker 2: of federal regulation of these financial exchanges is to prevent
Speaker 2: this sort of chaos and these sort of attacks on
Speaker 2: these businesses that could be political in nature or or other.
Speaker 3: And that's a very important distinction.
Speaker 1: Well, I read the charging document from the Attorney General
Speaker 1: as twenty charges. They're mostly about betting and wagering when
Speaker 1: it comes to sports, there's some election stuff in there.
Speaker 1: Would you ever consider limiting your business in Arizona or
Speaker 1: other states to things that these ags don't seem to
Speaker 1: have problems with, like economic data, the price of bitcoin,
Speaker 1: what markets are going to do predictions around those things.
Speaker 2: Look, I mean the AGE also claimed that we have
Speaker 2: war markets, which is incorrect. It's either flat out to
Speaker 2: lie or it's misinformed take which is unfortunate for someone's
Speaker 2: you know, filing criminal charges against the company. What's more
Speaker 2: important here, again is this is not about the merits.
Speaker 2: If it's about the merits, let's let the judicial process
Speaker 2: run its.
Speaker 3: Course in federal courts.
Speaker 2: This is about something other than the merits, which is
Speaker 2: what I'm focused on. I don't know what the AG
Speaker 2: is focused on, but you know she is off for reelection.
Speaker 2: You know, it does, it did some press, It does
Speaker 2: seem to be making some buzz. But what I'm really
Speaker 2: focused on is building create product for URM lends of customers,
Speaker 2: out of which close to four hundred thousand are in Arizona,
Speaker 2: and fighting any of these basless cases in courts, which
Speaker 2: was which we're going to continue doing.
Speaker 1: So you're fighting the cases. As I mentioned, Arizona is
Speaker 1: not the only state to take issue with your business.
Speaker 1: What happens ultimately if courts do side with states, what
Speaker 1: does it mean for the future of your company.
Speaker 3: We believe in the rule of law.
Speaker 2: Right, we will always abide by court decisions.
Speaker 3: The law applies to us, but it also applies.
Speaker 2: To the government, including state governments, and that's a very
Speaker 2: important thing.
Speaker 3: Right.
Speaker 2: This is really not about our business model. Again, if
Speaker 2: it was about our business model, we would be focused
Speaker 2: on the federal courts and the lawsuit about the merits.
Speaker 2: This is a broader attack, and you know many states
Speaker 2: have sided with us and have granted us a preliminary
Speaker 2: in junction agreeing with our legal analysis. We have spent
Speaker 2: four years getting regulated by the federal government, and we
Speaker 2: have a federal government in the CFTC that is come
Speaker 2: strongly in favor of our position. Following these charges is
Speaker 2: a total total overstep and an overreach from an ag
Speaker 2: that's up for reelection, and we find that unfortunate. But
Speaker 2: we will stay focused on what we do best, which
Speaker 2: is building a great product.
Speaker 1: So certainly the CFTC. We know where the CFTC stands,
Speaker 1: and we know where Michael Mike Selig stands on this.
Speaker 1: We don't know where courts stand on this. And I'm
Speaker 1: wondering if if we see a state like Nevada, for example,
Speaker 1: block access to your business, what will you do? Will
Speaker 1: you continue to operate or will you will you say, Okay,
Speaker 1: we're not going to operate in Nevada.
Speaker 2: Well, first of all, let's let's get to that point,
Speaker 2: and you know, we'll have to make a decision as
Speaker 2: the company what we do. What I can reiterate is
Speaker 2: we will one hundred percent abye by the law.
Speaker 3: That's what we will do as a company. It's always
Speaker 3: been our position.
Speaker 2: That's why we spend four years getting regulated upfront, regulatory
Speaker 2: first as a company and.
Speaker 3: Always abide by the law.
Speaker 2: But what I always say, the law applies to us
Speaker 2: as much as it applies to the government. And government
Speaker 2: oversteps the law and goes out of bound, We're going
Speaker 2: to fight that in court, which we look forward to.
Speaker 1: How long does that process take? Because it seems like
Speaker 1: there's a regulatory limbo happening. You're you're it's almost like
Speaker 1: your legal team is going to have to play whack
Speaker 1: the moll with all these states that are that are
Speaker 1: filing suit or bring in criminal charges. How long is
Speaker 1: this going to take?
Speaker 2: And gladly we have a legal team to handle these
Speaker 2: types of things and they're going to be focused on
Speaker 2: and you know, maybe it's a question for them. I mean, look,
Speaker 2: whatever long it takes, we're going to fight for prediction markets.
Speaker 2: I spent eight years building this company, four out of
Speaker 2: which I have a which are getting regulated upfront.
Speaker 3: I really believe in this marketplace.
Speaker 2: I'm very excited about the growth that we're seeing some
Speaker 2: of the fast growing company companies in America right now.
Speaker 2: And so what I'm going to be focused on is
Speaker 2: keep building a great product, and that's what's sort of
Speaker 2: most important for me. The more important sort of question is,
Speaker 2: you know, when it comes to this is not really
Speaker 2: about you know, whether this is gambling or not. This
Speaker 2: is not really about state versus federal which are both
Speaker 2: co existing and both growing both models. This really is
Speaker 2: turning into sort of some special interests that like the
Speaker 2: status quo.
Speaker 3: The status always worked.
Speaker 2: Very well for monopolies, but not for the consumers that
Speaker 2: are flocking to prediction markets right now.
Speaker 3: Which we're going to keep plighting for Tark.
Speaker 1: There is this perception though that people think this is gambling.
Speaker 1: An IPSOS survey from just a few weeks ago, for example,
Speaker 1: show sixty one percent of adults safe prediction market trading
Speaker 1: is closer to gambling. Eight percent say it's closer to investing.
Speaker 1: So there is this public perception that doesn't necessarily match
Speaker 1: with what you say. The platform is how do you
Speaker 1: respond to that and how do you battle that? Like,
Speaker 1: how is this not gambling?
Speaker 2: I haven't really looked at these polls, you know. The
Speaker 2: thing I will say is there's always been a battle
Speaker 2: of whether financial derivatives are gambling. Great features were called
Speaker 2: gambling and the eighteen hundreds, and there was a Supreme
Speaker 2: Court decision that you know, said even though there's speculation,
Speaker 2: these you know, products have financial our structures the financial markets,
Speaker 2: and thus are going to fall under financial market jurisdiction.
Speaker 2: So I always say this, you know, whether it's something
Speaker 2: feels and looks like gambling doesn't necessarily make it gambling.
Speaker 2: Speculation exists in all financial markets. If we're going to
Speaker 2: take a line that speculation is gambling, then the stock
Speaker 2: market with retail participation is gambling, then buying options for retail,
Speaker 2: or is your data to expire options is gammling, then
Speaker 2: retail buying crypto is gambling. The more important line in
Speaker 2: the historical line that we've been taking under the law,
Speaker 2: but also as you think about it societally. Is the
Speaker 2: business model a gambling business model, which is a model
Speaker 2: where the revenue of the business and the profits are
Speaker 2: equal to the customer's losses, in which case the incentive
Speaker 2: is to promote more losses and blog the winners. Or
Speaker 2: is it an open, free and fair marketplace where people
Speaker 2: can enter in and out freely and transparently, which is
Speaker 2: a financial exchange, in which Calci falls under.
Speaker 1: Tark Monsieur Calci co founder and CEO. Tark always good
Speaker 1: to speak with you. Thanks so much for joining us.