Power Lunch - Stocks rally to end the week 12/19/25

Episode Date: December 19, 2025

Nike stock gets hit hard after earnings. Former governor of New Jersey Chris Christie joins the show and discusses sports betting and prediction markets.  And an update on who may succeed Jerome Powell as the next Fed Chair. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Stock staging a comeback this week, but one closely watched market indicator is flashing a warning sign. Welcome to Power Lunch, alongside Kelly Evans. I'm Mike Santoli, filling in for Brian Sullivan. And just sell it. Nike deep in the red after warning of a sales decline this quarter, but one Wall Street analyst says this is a buying opportunity and one of his best ideas for 2026. Copper is on pace for its strongest year since 2009. A stock picker is stepping up with his best idea in the trade, while he believes this mine are already on track for its best year since 2021 still has meaningful upside ahead.

And former New Jersey Governor Chris Christie, a pivotal figure in the expansion of legalized gambling is now turning his attention to the rise of prediction markets and we'll hear directly from him with his take coming up. While turning to the markets, the major averages are trading higher across the board, as investors wonder if the Santa Claus rally is perhaps starting to take hold and whether this means the markets are in store for a positive 2026. Meanwhile, Bank of America's Bull and Bear indicator rose into the extreme bullish territory, signaling to investors perhaps that it's time to sell, at least on a tactical basis. So what should investors be expecting heading into next year and how should they navigate an elevated market? now on set to give his take and provide some value stock picks.

It's Chris Grisanti. He is chief market strategist at MAI Capital Management. Chris, good to see you. You too, Mike. You know, so there's been a glimmer of life from value stocks. They've actually outperformed this month. Right. Actually quarter to date, I think S&P value is winning.

On the other hand, we've seen these headfakes before. How are you just thinking about the overall market behavior, what it means for the outlook? Well, you're absolutely right. A lot of people don't realize that only two of the Mag 7 have outperform the market this year. And even our dog health care has been catching a bid in the fourth quarter of this sector. So you're absolutely right. But more broadly, how should an investor navigate such an expensive market? Well, we have a three-way course to do that.

And it's stay invested. So don't try to time the market. You've got to be invested. Don't get scared out of it. But stay unpopular. And by that, I mean, go towards those places. that aren't leading the market, that aren't so expensive. Health care is my favorite spot right now.

Not only is it cheap, but it's also not economically sensitive. So if the economy slows, you can make money there. And finally, and this sounds weird, stay behind. And what I mean by that is don't try to catch a speculative market. Imagine you're running a marathon and you're staying in that pack that's behind that front-paced runner that's going way too fast. So stay there, and nobody remembers who's winning halfway through. They remember who wins at the end.

And so that's how you stay. Is that a formula for actually outperforming a very top heavy index, or is it something that is just going to mitigate risk if, in fact, the overall market hits trouble? Well, I think it's actually both, Mike, because what happens, as it did, for example, in the early 2000s, the very heavy index went down, led by the same folks that brought it up. Yet if you had the unpopular group, you were still not just outperforming, but you had an absolute positive return in a negative market. And that's how you win the marathon. Yeah, because I don't even want to talk about your stock picks. UPS. I know.

Kimberly Clark? Yeah. Dell, okay, maybe, but. Stay on. You only like Dell because it's technology. Right, exactly. Right. So I like two stocks that are down by almost 50% each, and that's UPS and Kimberly

Clark. Kimberly Clark's a great example. So there's a sleepy toilet paper maker buying a sleepy Tylenol maker, but a PE of 12, when it's usually a PE of 19, a safe dividend of 5% while you wait, And believe me, that will outperform a terrible market if things go south. But is that when you say, you know, you've seen the Wall Street strategist targets. I don't know if you have your own, but they're very bullish. And not in an aggressive way.

I mean, even JP Morgan's global econ team is talking about this kind of profit upswing that they foresee. So profits go higher, the forecast go higher. A lot of us obviously feel like it can't be that easy. But don't you share that kind of big picture? And I'm not advocating 100% into Kimberly Clark and UPS. But what I am saying is if you're like most folks, you've become tech heavy. And so be careful about that, especially with the more expensive stocks. So diversify because things happen like in the first quarter of this year.

Or as Mike pointed out, are even happening now in the fourth quarter where value is coming to the four. There's more than one way to make money and some are less risky than others. Something like UPS. Obviously, it used to actually trade at a premium. It used to be this kind of, you know, this quality play. Now it has looked very cheap, but, you know, pretty elevated dividend yield and things like that. Is that not an economically cyclical play, or you think it's kind of priced for it doesn't matter? No, absolutely economically sensitive.

But I do think that there's so much risk has been taken out. The stock's down 60% from its highs. But also the big thing happening there, of course, is they're moving away from Amazon. And, you know, you're ripping the relationship with your biggest customer. And that's hurt for seven or eight quarters in a row now. And that's finally moving on. And so I think that's going to be a sleeper that can perform well, even if the economy softens. Any thoughts on gold, on the metals, on, you know, what do you do with kind of materials and

ag and all of these trades on the weaker dollar that we've had this year? Sure. I think that trend actually continues. As you know, Kelly, those trends don't last for a quarter or even a year. They last for half a decade, things like that. I do think we're in an era now of more inflation than there used to be. I'm not going to pick a number. But I do think we're, you know, think about the 70s.

Materials did well, commodities did well. And I think that trend continues is not over with 2025. So when you hear those, we were talking to Scott Croner about this last hour, he these 375 on the 10 year next year. You know, we have possibly a few more Fed cuts coming. That is why people are looking for this tailwind, right? That they say fundamentally we're coming down from the inflation mountain and that's going to support equities. What do you think about that?

I kind of would push back there because I really think. that I don't want a Fed cut, and I'm an equity guy, because I think right now, after the last cut, which was called the, you know, the hawkish cut, I think the only reason they're going to cut further is if they really see some weakening. And I, as an equity investor, don't want to see weakening. I'd rather have current interest rates. But productivity, we have strong parties, so we can have poor labor markets and productivity growth and GDP growth and lower rates. That's the argument, the sort of happy argument. That is the happy argument. But I, you know, this is rarely a happy place.

So I think there's lots of ways that have me arguing can go south. Look, I'm a value investor. I don't believe in happiness. And when you're hedging for the future, I would say inflation is probably the sleeping giant that is still out there somewhere. All right. Chris, thanks very much. Chris, Chris, I scrooge from MAI Capital. Meantime, the race to become the next Fed chair is heating up because according to the odds on Kalshi,

Kevin Hassett is still the favorite to replace Powell, but only at 53% odds. Morse is in second place. Waller is closing the gap after a strong interview with Trump. Steve Leesman, it joins us now. And Steve, I guess Waller made a strong case. Well, it was described to us as a strong interview. The president met with Governor Waller. Just before he got out there in front of the nation and talked about the economy,

we're told the two talked about jobs in depth. and it was sort of a sign of interest by the president. And more than just, what are you going to do with rates? Apparently, you know, the president looks to be turning his attention more to specifics in the economy. As you know, Kelly, the jobs numbers have been pretty concerning as well. And the poll numbers for the president have not been all that great when it comes to the economy. So it looks like the discussions are expanding. Steve, I guess it's hard.

to quantify this in any real way, but what are the stakes here? I mean, just how big a gulf do we expect there might be in the policy course under any of these folks if they were chair? And I guess maybe I wonder if it comes down to not so much what they think rates should go to right now, but how they might navigate a committee, you know, of mixed opinions and things like that. You know, Mike, that's a great question and one I think everybody ought to be thinking about, but there's a couple equations you have to throw into there. The first is how much pressure will the president put on the Fed and what will the form of that pressure be? And then the second question, I think, is how strong institutionally is the Federal Reserve to resist that pressure? If both of those,

if the first one is well, not very much, and the second one is very strong, then the answer would be it doesn't matter a whole lot because the institution of the Fed will guarantee a continuity between the way policy was made and the way policy will be made. But if the president is able to exert an enormous amount of pressure on the Fed and such that the Fed chair can really get his or her way when it comes to policy and the committee matters less, then we're in for a new paradigm for how policy is made, Mike, and the market should perhaps have additional concern.

So I don't know the answer to both of those questions. It looks to me like the president has backed off a little bit, in a sort of heavy-handed way of running the Fed. And I would just point your attention to January 21st when the Supreme Court will decide how much latitude the president has to fire a Fed governor. Right. I guess there's maybe an extra step there is you'd have to probably do the thought experiment of

under what conditions would the president seek to exert whatever maximum pressure is. And that would probably be the economy's struggling, stock market's not doing well. You know what I mean? Like it's not necessarily in a vacuum that the president might say, put interest rates at 1% right now?

No, it's the opposite of that, Mike, where the concern would be, right? If the economy is in a bad way and it's clear and there's not an obvious inflation problem and the interests of the president and the obvious course of policy are the same, there's nothing to worry about. It's when those two things diverge. And that's, by the way, why I'm looking very closely and will be more so on Monday at this notion of how the Fed is going to treat productivity and how much, as I talked to John Williams today, how much productivity is a part of factoring into their forecast for

next year? Because that could bring rates down even amid high growth, which you know the Fed can get worried when the economy runs faster than what it perceives to be potential to be. But if potential is higher and the Fed can let the economy run hot, it has something less to worry about, which is a really important question here. The other issue is the extent to which if those interests do diverge, can the committee sort of hold the line and say, you know what? This is how we do policy over here. And thank you very much, Mr. President. We hear what you're saying, but we need to do something else. And just remind us quickly about where John Williams came down on that productivity hope. He's pretty optimistic. I've now

had a chance to ask that question, I think, of four or five different Fed folks in the last week or so. And they all seem to some extent to be thinking about factoring in productivity and high productivity into their forecast for next year. Now, remember, it also, as the chair said, raises the newture rate a little bit. But it also could allow the Fed to run a hotter economy, essentially, and not do as, you know, and follow along with a green spend in the 90s, which was let it run and not raise rates. Now, there's a lot of differences, and I'll talk about these on Monday, maybe a little bit more risk in letting it run hot this time around. All right.

We look forward to it. Steve, thanks very much. Steve Leasman. See you then. Let's check it on the bond markets now while the U.S. is cutting rates. The Bank of Japan raised interest rates to 30-year highs, and that health yields on the move globally, pushing its 10 and 30-year to multi-decade highs, as you can see there.

Rick Santelli is tracking all the action in the Bond Report. Rick, what can you tell us? Absolutely, and we'll get to the foreign global interest rates in a second. But, you know, this morning, University of Michigan sentiment, it was definitely weak. Current situation was the lowest in history, and the history I have goes back to the 70s. If you look at the headline number on this chart, back to the 70s, you can definitely see this was the third lowest number, the third lowest number at 52.9. But what's odd here is, is that this used to correlate with equities.

When confidence was low, equities were usually going south. When confidence was high, equities were going north. Equities have definitely been heading north. They're already up to the North Pole. Now, we're not at records, but we're very close. University of Michigan has kind of lost its magic. And if you look at the inflation numbers, they seem too high. But nonetheless, the market kind of looked past it.

What it didn't consider was yesterday's CPI. Listen, I can't tell you how inaccurate it was, but the market's weighing in. Here's a two-day of twos and tens. Both maturities have higher yields today than they did yesterday. I'm definitely higher than that short window when interest rates went down right after the 830 release of that question. CPI. Now, to foreign rates, yes, the Japanese raised a quarter point all the way up to three quarters of one percent, but it isn't the sound of that low number. It's where they have

been, negative numbers, all the things they have done coming back to Roos. If you look at the French, the same scenario all throughout Europe. Now, the French tenure closed at 361 today, a 14-year high. I picked the Japanese tenure. We can pick any maturity, but the 10-year now over or two percent, a 26-year high. The overnight rate, you pointed out, a 30-year high. Why should we pay attention? Well, it isn't only the carry trade borrowing cheap yen and going out and making investments. It's more. It's a whole tightening up and arbitrage globally and how much the distortions of the past 15 years, especially out of Japan, may affect the rest of the world's global sovereigns. Kelly, back to you. Rick, no one takes us on that kind of a tour to force like

you. We appreciate it. Rick Santelli. Up next, when will this stock actually start to run? It's our mystery chart today. Tag me, you know what? Tags Sully on X with your guest. This blow up his phone in the break and make him think what's going on. And we'll reveal it right after the break. Welcome back, a major development over the future of TikTok. The company, has signed an agreement to create a new U.S.-based joint venture, a move aimed at addressing those longstanding national security concerns and regulatory issues in Washington. The question is how this will all actually work.

Julia Borsden promises to tell us those answers, joining us from Los Angeles. Julia, what's the deal? Well, right now, there's a transition going on. This deal is going to close on January 22nd. And now that the ownership deals have been signed, including with the likes of Oracle, the company is managing the transition of its U.S. data and various other things over into this new U.S.-based organization, including employee contracts. What I've heard from sources is employees are getting their paperwork changed right now. The key thing is that Oracle is going to be responsible for

the security of the U.S. data. Their cloud servers are going to be used. We saw Oracle shares go up on this news, despite the fact that we already knew that Oracle was going to be playing this role. I think the key question here, in terms of the future, not just for TikTok, but also for the entire social media landscape is how well this transition goes. TikTok essentially needs to retrain its algorithm on U.S.-based data. If that goes well, users won't be able to notice any difference about their experience. Neither will advertisers. And then, Kelly, there's another key factor here that we need to watch.

It's not just about creating this new U.S.-based entity and training that algorithm and making sure it all operates seamlessly. that entity is also going to have to integrate with the global version of TikTok because that global company is going to be handling things like advertising and e-commerce, which are, of course, essential and they need to function on a global scale, not just on a domestic scale. Yes, good reminder. Julia Borsden, thanks so much.

Well, one of the concerns about TikTok has been its ties to the Chinese Communist Party. Does this new structure actually satisfy U.S. lawmakers, regulators, and the Chinese government and does this deal actually get done. Eunice Yunn joins us now. So, you know, Eunice, there probably was some measure of skepticism that we'd even get to this point. I mean, it seems like there's been some follow-through. How does it fit into really this kind of complex dance of U.S. China trade relations? Well, by chance, direct stake is going to be capped at under 20 percent. So that's in line with U.S. national security requirements. So that could be seen as something that would satisfy American lawmakers. But at the same time,

it's still unclear what Beijing's intent really is. Overnight, the foreign ministry was directly asked about this, dodged a question about it, just making a boilerplate statement saying that a Beijing's position is consistent and clear. Of course, not too clear. But there are some reasons why one could be encouraged by some of the signaling that's been coming out of Beijing. The Chinese state media has been quoting this pro-Beijing professor who said that this arrangement is in line with Chinese law. saying that the sale, that there is no sale of the algorithm, saying that Oracle is only going to be monitoring or reviewing this algorithm

but won't be able to steal the algorithm, which is one of the concerns of the Chinese public. So you're seeing that the Chinese government is kind of signaling that they want this deal to go through. And so if that's the case, and arguably it's kind of one of the issues that the Chinese government is willing to sort of give a little, slack to, where else are we not doing that? You know, it seems as if there's, yes, we're buying, you know, the Chinese are buying some

soybeans, and yet there's still this managed disengagement process it appears between the two countries. Well, I think it's interesting is that it's, this movement is consistent with what we're hearing a lot in China, which is that the Chinese government wants to keep President Trump on what they consider to be the right path. So that means throwing President Trump something that is politically important to him, but not really strategic to China. So TikTok, for example, or soybeans. China buys a lot of soybeans from other countries in Brazil.

So not so important, but maybe very important for President Trump. And at the end of the day, China gets more soybeans. So what we're seeing today is consistent with China trying to keep President Trump in, in its own good graces. It reminds me a little bit about NVIDIA, where you sort of want the other nation hooked on the product, but without, you know, in a way that almost each side thinks they're winning. So we seem to be kind of doing this dance across a multitude of areas for the Chinese also.

It's exports, right? Those traditional exports, like we talked about, they're still flowing. They're maybe flowing more to Europe, but they're still flowing here. So we remain hooked on that. They continue to win. And yet we're, you know, so it feels like everything is getting resolved in this weird frenemy kind of way. Yeah, right. I mean, I think that there's also this kind of stalling tactic by the Chinese, that there are a lot of bigger issues that are difficult to solve.

But in the meantime, you know, while they're developing their AI or looking for other ways to kind of outpace the U.S. when it comes to chip technology or something, that they're able to kind of resolve some of these other issues and keep President Trump closer to them from their perspective. Or to the Taiwan point, which is kind of, you know, lurking in the background as well. where they, you know, so you're saying we shouldn't read into this, that somehow relations between the U.S. and China over TikTok have come to some happy point. It's almost, sounds like they're, each side isn't even talking to each other, but somehow kind of looking the other way and allowing this to move forward. Right. Well, I think that there are tradeoffs. So China sees that there are multiple points where they have friction with the U.S., but then they're looking at certain issues that are important for President Trump, but maybe not so important for China, which they could give on.

I think that they're also doing what is, they're just so good at it, which is dividing and conquering. So they do that with the Europeans, for example. And then here I just, you could really see that they're really focused on President Trump, giving him what he wants, but maybe not necessarily what the U.S. national security community wants or what even members of his own administration want. It feels like the Wall Street consensus going into next year is, well, there's a meeting plan in April. And so therefore, maybe both sides will de-emphasize conflict, at least up to that point. Yeah, no, that's definitely what we have been hearing a lot, that this meeting has to come through, that President Trump or his administration wanted to happen, and so we probably won't see a lot of disruption up until April. Eunice, thanks so much. Great to see you.

Really appreciate it. Well, we've been hitting on it all week. Lots of the medals are having a pretty banner year, and our next guest has a copper play for you that he's been buying more of for his clients. We'll reveal it after the break. Welcome back. It's power check time. And today we have Shikiar asset management co-CEO, Sam Shikiar. It's amazing. You work at a firm with the same name, you know? Thank you. Funny how that works. Anyway, welcome. You've got a bunch of different names for us as everyone's trying to get out their playbooks for 2026.

And some of them you think of as more defensive plays in this market, which is interesting, because we're going to start with Freeport MacMaran, the copper producer, obviously. You know, I had an angry note from someone today that's that angry, but they said, look, I held this, but it's underperforming copper this year, admittedly only by about seven points. Why do you like this one? Sure. So in these a little bit more volatile markets, we think a little bit of these defensive companies can be better. Freeport is the largest U.S. producer of copper, and they're also a top 10 producer of gold.

And I'll quickly run you through their earnings model. It's pretty simple. It costs them about a dollar and a half to pull the copper out of the ground, and they're selling, it for $5.5.5. That's a pretty good spread, $4. And by the way, they're going to mine four billion pounds of copper in the next year. So that's about $16 billion in operating profit. So we have them trading it six and a half times next year's EBITDA. And by the way, there's been M&A in this space, more around the 10 times multiple. So we could see them as a target for some of the larger mining companies. And as far as copper goes, we still see upside

from here. AIs, EVs, data centers, you name it. They all use the metal. So we're pretty bullish on the same. All right, Sam, and, you know, we can't get away from AI. Nextera Energy. Obviously, owns a regulated utility, but there's also a big data center component here. Yes. So three reasons we're excited about next year right now. Number one, they're the largest producer in the U.S. of clean energy. Number two, they own Florida power and light, which powers 11 million homes in the state. I think we all know someone has moved to Florida. And then what we're most excited about, number three, is that they just signed a 25-year agreement with Google to power AI data centers by restarting a nuclear facility in

And then they just signed a similar agreement with meta. So there's a lot going on there. So really you get a stable core utility company with a bit of an AI power kicker, which we're excited about. All right. So then that brings us to the mega caps. Sure. You own a lot of them, Apple, Amazon, but no NVIDIA. Bernstein today has a note saying NVIDIA's valuations are remarkably cheap.

I mean, it's obvious. Is that enough to make you want to get in? Great question. So, look, we think NVIDIA is one of the great American companies can only say amazing things about what Jensen and and his team has done. At the moment, we're pretty full on with other AI slots in our portfolio that we're equally excited about. But we're continuing to watch what's going on. The stock has pulled back a little bit on the TPU competition. But look, if it continues to get more attractive in value, I think it could be something we'd start to believe. I mean, it's down at, you know,

almost to the same multiple as the S&P 500. I guess the question when it comes to WNVIDIA is if there's a cliff out there where a lot of this forward order flow seems like it's not going to come through. Sure. Well, they continue to innovate, Ruben, Blackwell, doing a lot of of great things. And as far as AI goes, I was reading that 495 companies in the S&P 500 are all using AI now. Beggs the question what the other five are doing. Exactly. I know I'm using it every day. It has a billion users globally. It was adopted faster than the internet, computers, cars, electricity, you name it. So it's pretty remarkable what's going on. And it's lifting, to Mike's point, the AI-related trades today that Open AI is doing in a more

fundraise that you and I, what's your preferred platform? Exactly. I use chat GPT a lot. So do I. Yeah, I love it. It's great. Sam, thanks so much. Thank you for having me. Sam Shikyar. Thank you. All right. Let's go over to Dr. Christina Partes-Nevilus for ACNBC News Update. Hi, Christina. Hi, Mike. Well, Secretary of State Marco Rubio says he may join talks tomorrow on ending the war in Ukraine. Russian and U.S. negotiators are due to meet in Miami to try to push through an agreement to end the nearly four-year conflict. The White House says U.S. envoy Steve Whitkoff and President Trump's son-in-law will be in attendance.

They were in Berlin just earlier this week for talks with Ukraine's president and European leaders. A Paris court rejected the government's bid to suspend Chinese fast fashion company Xi'in in France today. Authorities requested this three-month suspension after allegedly finding childlike sex dolls and illegal weapons for sale on the platform. The court said a suspension would be disproportionate. French officials say they will appeal. And our federal judge blocked the Trump administration today from restricting more than $3 billion in grant funding used to provide housing and other services to homeless people. 20, mostly Democratic-run states in Washington, D.C.,

sued the federal government over the housing and urban development changes that they said would put 170,000 people at risk of losing housing. Mike? Dr. Tina, thank you very much. Well, coming up, sports books, prediction markets, and more. The former governor of New Jersey,

Chris Christie, who championed legalizing sports betting in New Jersey, joins the show. Welcome back. The rise of prediction markets has upended the betting landscape. Today, Draft Kings launched a predictions platform that is live in 38 states, including Texas and California, the two biggest states that have not legalized traditional sports betting. And a well-known and influential voice is weighing in, raising fresh questions about the role prediction markets are playing in gaming. Contessa Brewer joins us now in the New York Stock Exchange. Hi, Contessa.

there, Mike. Yeah, the spectacular rise of these prediction markets has led to a nasty fight in the gambling industry with the American Gaming Association issuing an ultimatum. If you offer prediction markets, you got to leave. Fandual, Draft Kings, and Fanatics did. Today, we can exclusively report the AGA is bringing in former New Jersey Governor Chris Christie as a strategic advisor to spearhead its fight against prediction markets. Governor Christie joins us now. It's good to have you. I know you've had a lot of experience around these fights around gambling. You pushed for the Supreme Court to overturn PASPA, and that opened the door not only for New Jersey to legalize sports gambling, but for other states as well. Why are you fighting prediction markets? Well, first off,

because they're illegal. So let's start there. They are clearly illegal in the sports gaming space. And here's why. The Supreme Court turned us over to the states to do. And the fact is, doing it through the states gives you two things. One, it gives availability to people, two, in a regulated market. And when we've seen some of the things that have been going on lately in the sports gaming area, we know that regulation is really important. The problems we've seen both the NBA and Major League Baseball were only discovered because states were working in conjunction with licensed sports books to look for irregularities and get those corrected immediately. And so you won't have that in these predictive markets.

They do not work with regulators anywhere. There's no monitoring of what's going on there. And in fact, one of these predictive markets just said they're going to offer who will enter or not the portal in NCAA football in January. Imagine how much that could be manipulated for gain. These are folks that are not being regulated. It's not in compliance with the law. And it is hurting the 40 states where this is going on.

And in those 10 states that don't have sports gambling right now, Contessa, those folks had made a decision not to allow it in their state. And these folks are flouting state law and going in there anyway. The tribes are also arguing that it supersedes. tribal sovereignty, and they're fighting it as well. They've joined in this battle. The Kalshi and Polymarkets and even Draft King CEO was on with us last hour governor and said, look, they're not offering sports in states where it's been clear. The regulators have made it clear they won't tolerate it, and Draft King's offers sportsbook. I'm just curious. Do you see all prediction markets as

illegal or just those around sports? Are you fine with trades on the outcome of elections, for instance? I think this is restricted at the moment to sports. And let me say that back a few months ago, in court, counsel for one of the prediction markets companies said what they were trying to do on presidential elections was legal. It would only be illegal if they came into sports. Now they're into sports and claiming that what they said in court no longer counts. Look, the states have occupied the space to regulate sports gambling. They were given the opportunity to do that by the United States Supreme Court in a case that I fought six years to bring to the U.S. Supreme Court and to win.

And the result of it has been growing interest in all four of the major sports leagues and college sports because of the opportunity to wager on them. It's been done in a way that is regulated and monitored to make sure that the integrity of the game is protected. and we're not having folks go out there in states where the citizens of that state don't want it. You know, it's easy for anybody to say, well, we're only going in the states where sports gambling is not authorized. Well, it's not been authorized in those states

either because those states didn't want it or because they were protecting tribal sovereignty as you see in Florida. And so this is a problem. They're violating the law. And this is a problem for consumers and for the leagues. And I think that's why you'll see.

consumers and the leagues come together on this and stop prediction markets from doing what they're doing. That's fascinating. Governor Christie, it's Kelly jumping in here. And I appreciate it because just to point out a number of things I'm thinking as I hear, first of all, your involvement tells me the people in traditional sports betting, even though they deny that they, you know, are worried about this and they're getting into it themselves, they're obviously worried it's going to kind of come in against their profits.

Number two, I guess it's just one person's opinion. I don't really love the impact that sports betting has had on all of these sports. and even if the states can opt their consumers out, you can't opt out the impact that's having on the way that the game is being played and the way that people are being manipulated, number two. And number three, I find it a little ironic that the prediction market example

you're most bothered by is a sports-related one. So it seems like for much of the rest of it, the prediction markets, I think they're helpful. They're a good source of information gives you a sense of what's going on. Do you think they're really subject to more manipulation than the world of sports betting? In the world of sports, they are

because no one's regulating them. Right, but outside of that. I mean, you're just making the point that sports betting remains a problematic thing. So maybe they have to ring fence that. But we're talking kind of about news, politics, who's going to be the next Fed chair, that kind of thing. Look, I'm not here to object to that. I'm here to object to what they're doing in violation of state law across this country in two different ways. One, trying to go into places where the states have authorized and licensed people.

And these companies that are licensed in each individual state have gone through a regular. review process. They've paid significant money for their license. And now you have a company coming in and degrading the value of both the regulatory review and the license fee for that reason, not to mention the tax revenue that goes to these states. Secondly, what you're looking at here is something that's a real risk to the integrity of the game. The things that happen in NBA and the MLB were discovered because the sports books licensed sports books are in partnership with state regulators to look for irregularities. No one is looking for irregularities in sports prediction markets.

There is no one who is overseeing that, and it leads to real problems. And the example I gave about the transfer portal in the NCAA, imagine how rife that can be with corruption if someone tried to influence a student athlete to either go in or not go in based upon what they're betting in the prediction markets. operating as futures exchanges and therefore the CFTC is there in theory? In theory, but CFTC has made it very clear that they're not regulating it with any of the rigor that it's being regulated with by the gaming institutions in conjunction with state regulators. And the U.S. Supreme Court looked at this in the case we brought, and they found that the states were in best positioned to do it. So CFTC is not doing the job regarding sports at all, nor do they claim to be doing the job of overseeing.

Every day in every state that is licensed gaming, they are monitoring, along with the sports books, the moment-to-moment betting that's going on on each individual wager that's being offered by those sports books. And if they see irregularity, much greater betting in one particular area than normal, that immediately triggers investigations by the regulators and by the sports books. themselves. And those get reported to the right law enforcement authorities if something's been done wrong. And that's how you found out about the problems in the NBA and the MLB. Those problems aren't happening because of sports betting being legalized. They're just being found out for the first time because sports betting has been legalized and regulated. And the sports books have high tech in place to monitor that aberrant behavior. There are more than 8,000 regulators in states across the nation who are focused on gaming.

I got to ask you, though, you've got Kalshi, with whom this network now has a business relationship that has refused to take no for an answer. It is just going full steam ahead. Polymarket, Robin Hood, CBOE, CME, ICE. You've got now exchanges coming in to do this market work. Is it too late for anything, say, but a Supreme Court decision in this case? Look, I'm a former federal prosecutor. Just because people brazenly break the law, doesn't mean they should be permitted to do so.

And that's what your argument is. Well, they're all doing it regardless of what the law is. They know it's against the law. They're doing it anyway, so is it just too late to stop them? Answer, in my view is no. There are lawsuits going on in dozens of states across the country right now, many of which have already been won by those state regulators. And that's why I think you saw Draft Kings today say they're not going into it.

of the states where there's currently licensing and regulation of sports books. But that violates the decision made by those individual states not to permit sports gambling in their state. That's a decision as well that these folks are violating. Governor Christie, thanks so much. And, of course, thanks to Architella Brewer as well. We are right back after this. We've been speaking about gambling.

Check this out. Vegas is bracing for this weekend's fight on Netflix. Influencer Jake Paul will face off against former heavyweight champ Anthony Joshua. And here, the staggering number. Draft Kings tells us that if Paul wins, the sportsbook stands to lose $100 million. Joshua is the heavy favorite, but more than 80% of the bets are on Paul. So clearly gamblers in the public are swinging for an underdog payout here. Wow.

They have draftings would lose $100 million. Yeah, and they know it. And just they have to kind of go against the public. Should have asked Robbins about that last hour. Are you done for today or are we going to see you? I'll be around the next couple hours. All right. Well, thanks for joining us.

Mike. Appreciate it. That's it for Power Lunch. Closing bell starts right now.