Not investment advice. Analyst, regulatory and antitrust law, Hedgeye Potomac Research. [email protected]
Washington, DC
Joined May 2022
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More social media addiction trials underway in California, two teenagers claiming mental and physical harms from compulsive platform use (Meta and Snap). Zuck testmony on Nov. 10. Recurring question: what did you know about platform usage risks and when did you know it?
Supreme Court arguments today in case affecting alt asset mgrs access to $14 trillion 401(k) market. But bigger potential boost for alt asset players like Apollo, KKR and Blackstone is Labor Dept litigation safe harbor protection for plan fiduciaries offering alt assets like private equity, a new rule that could land by year-end.
Kalshi loses another federal court case, the Sixth Circuit ruling — as we expected— that prediction markets sports bets are not swaps under exclusive CFTC regulation. The Supreme Court will probably rule the same way when it finally addresses the issue. Ohio, Tenn and Mich can now shut down Kalshi sports bets. More good news for state-licensed sports betting operators and traditional casinos.
Paramount-WBD settlement with state AGs getting close, days before the ticking fee kicks in. Lots of pressure on AGs to settle, reinforced by a fundamentally weak antitrust case on the merits. Post-closure market concentration metrics will adjust, affecting prospects for future streaming consolidation.
Robinhood has appealed a court ruling allowing Nevada to prohibit prediction market sports gambling. NJ has an appeal already in the Supreme Court in a fight with Kalshi. The Court really needs to resolve this and probably will by next year.
As expected, a fed court opted for conduct remedies in the Google ad tech monopoly case, rejecting DOJ’s requested divestiture of Google’s ad exchange AdX. Still, closer integration of Google Ad exchange demand with rival publisher servers should benefit rivals like Magnite and PubMatic.
Ninth Circuit appellate court just ruled against Kalshi, a green light for state regulators in the Western U.S. (Ninth Circuit states) to shut down prediction market sports betting. Bad news for Robinhood too. Better news for DKNG and FLUT that have state-licensed OK for online sports bets. Traditional Casinos gets a boost too. We saw it coming.
State settlement with Meta for $17 billion and regulatory conditions to protect kids from compulsive platform usage. Enforcement will be an issue. Personal injury claims in federal and state courts (thousands of plaintiffs) with big potential compensatory and punitive damages remain the primary risk.
Supreme Court Justice Kagan denied Apple request to stay commission rate proceeding for linked-out app transactions (payment on developer’s website). In that proceeding, Apple now proposes 15% commission for standard apps compared to 30% when purchased in the App Store.
Apple filed emergency request with Supreme Court to halt federal court proceeding that could further compromise AAPL’s commission revenue model. High court seems receptive but AAPL warns of adverse global impact if lower court action moves forward.
Paul Glenchur retweeted
WILD: #NFL legend Lawrence Taylor says Joe Montana is the GOAT over Tom Brady because of the era he played in.
“You bring Brady to the ’80s or ’90s, we’d knock the GOAT out of him real quick.”
LT says Montana took BRUTAL hits and still dominated.
WOW 👀
FCC reasons to nix the 39% TV ownership cap yesterday make sense; long overdue. But uphill legal fight ahead over 2004 congressional act that told FCC to impose cap at 39%. Nexstar bounced on Tegna inclusion. That unwinds if court rules against the FCC.
States have sued to block President Trump’s Sec. 301 tariffs. The Court of Intl Trade ruled against IEEPA tariffs two months after Trump imposed them. Court can expedite and move quickly on Sec. 301 tariffs.
Apple services revenue in recent quarter was adversely impacted by court-ordered ban on commissions for linked-out app transactions. Supreme Court could overturn the ban next year. Arguments perhaps this fall. Ripple effects on global commission revenues.
Tough morning of oral arguments for Kalshi’s lawyer before a fed appeals court in Ohio. Court very focused on whether Congress really meant to confer fed reg power over sports gambling in Dodd-Frank Act, a law targeting causes of 2008 financial crisis. Judges skeptical.
This morning , a fed appellate court in Ohio hears another legal challenge to Kalshi, Robinhood and other prediction market sports betting platforms as state regulators claim power to prohibit them as unlicensed gambling. Several upcoming rulings likely muddy the legal waters in weeks ahead, potentially shrinking the market for prediction market sports bets and setting up Supreme Court review as early as next year.
Trump announced section 338 tariffs, max at 50%, on selected Canadian imports, effective in 30 days. Sec. 338 of 1930 Act has never been used before so this is novel. Legal question whether Sec. 301 tariff law limits or effectively repeals 338. May invite challenge.
PSKY/WBD slapped with TRO, essentially a judicial administrative freeze to hold status quo for prelim injunction battle. Not a big surprise. Uphill fight for states to win the injunction.
Upcoming FCC order to lift outdated broadcast ownership cap has plenty of economic and competition policy support. But FCC authorization from Congress is the problem and courts no longer defer to fed agency views of statutory power. Big fight ahead.