Squawk Pod: Regulating prediction markets & Meta’s $375m lawsuit - 03/25/26 | Audio Only
Speakers
Becky Quick -- Host
— CNBC Squawk Box host
Joe Kernen -- Host
— CNBC Squawk Box co-anchor
Andrew Ross Sorkin -- Host (Not Present)
— CNBC Squawk Box host
Summary
- A bipartisan group of senators, led by John Curtis (R-UT) and Adam Schiff (D-CA), is introducing the "Prediction Markets Are Gambling Act" to ban sports-style betting via these platforms, arguing they are unregulated gambling that undermines state authority and enables potential insider trading.
- The senators argue prediction markets should be regulated at the state level, not by the CFTC, citing a billion dollars in trading over the Super Bowl and reports of a bettor with 93% accuracy on the Iran war as suggestive of insider trading, especially on blockchain-based platforms.
- The Department of Homeland Security (DHS) funding is stalled in Congress, with Democrats insisting on ICE reforms (e.g., body cameras, warrants) before approving funding, leading to unpaid TSA agents and long airport security lines.
- Senator Adam Schiff defends "sanctuary city" policies as a local decision to prioritize violent crime enforcement over immigration enforcement, while both he and Senator John Curtis express opposition to using government shutdowns as a negotiating tactic.
- A New Mexico jury ordered Meta to pay $375 million in a civil case, finding the company liable for misleading consumers about platform safety and endangering children by ignoring internal safety warnings and implementing features like end-to-end encryption.
- New Mexico Attorney General Raúl Torrez claims Meta prioritized profits over safety, and a second trial phase in May will seek injunctive relief (e.g., age verification, algorithm changes) and further financial penalties.
- Meta plans to appeal the verdict, with the process moving through New Mexico state courts.
- OpenAI is shutting down its viral video generation app, Sora, to focus on business and coding tools; a reported billion-dollar deal with Disney for character integration never closed.
- China is reportedly preventing the Singapore-based co-founders of AI company Manis from leaving the country amid a regulatory review of Meta's $2 billion acquisition of the firm.
Trade Ideas
Senators Schiff and Curtis are advancing bipartisan legislation to classify and ban sports-style "prediction markets" as gambling, arguing they enable unregulated insider trading (citing a 93% accurate better on the Iran war) and circumvent state authority. They claim the CFTC is wrongly treating them as futures contracts. The proposed "Prediction Markets Are Gambling Act" represents a clear, bipartisan regulatory threat aimed at shutting down or severely restricting the core business model of companies operating in this niche (e.g., Kalshi, Polymarket). AVOID due to existential regulatory risk. The sector faces a high probability of increased scrutiny and potential federal ban, which would directly impair or eliminate the business models of companies operating prediction markets. The legislation may not pass or could be watered down. The sector may adapt or find alternative regulatory pathways.
A New Mexico jury ordered Meta to pay $375 million for child safety violations, finding it liable for misleading consumers and endangering children. The Attorney General states Meta's own safety team warned for years about dangerous design features (e.g., algorithms, lack of age verification, end-to-end encryption) but were ignored by executives. This landmark loss in a standalone state case weakens Meta's traditional Section 230 defense and sets a legal precedent. A second trial phase seeks injunctive relief to force product changes. WATCH due to increased and tangible regulatory/legal risk. The case demonstrates a successful legal strategy against big tech's liability shields, which could inspire other states and lead to costly operational changes and further financial penalties. Meta's appeal could overturn or reduce the verdict. The company's vast resources may allow it to absorb the financial penalty without material impact.
Up Next
This CNBC video, published March 25, 2026, features Adam Schiff, Raul Torrez discussing XLK, META. 2 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Adam Schiff, Raul Torrez · Tickers: XLK, META