“Please, Spare Me.” Chris Christie on Kalshi & Polymarket 2/20/26

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0:37Be a part of the action on FanDuel. All customers get a profit boost every NBA playoff game day. 21 plus and present in select states. Opt-in required. Bonus issued is non-withdrawable profit boost tokens. Restrictions apply, including any token expiration and max wager amount. See full terms at FanDuel.com slash sportsbook. Gambling problem? Call 1-800-GAMBLER. 1-800-MY-RESET. Bring in show music, please. This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, the Supreme Court is set to decide on President Trump's authority to enact tariffs. The U.S. is poised for a potential attack on Iran, private credit stocks are sliding, and Hollywood giant James Cameron is weighing in on the Warner Brothers discovery deal that we cannot stop talking about.

1:27What do you call that when it's both options are really bad for Hollywood? It's a double-edged sword? No, it's worse. It's a conundrum? Conundrum, it's a lose-lose. They don't like Netflix or the Ellicott's. Plus, former New Jersey governor Chris Christie is now a strategic advisor to the American Gaming Association, and he's taking aim at Calci and Polymarket, both of which are firm on the distinction between sports betting and prediction markets. Please, spare me. What they're trying to do is avoid regulation and avoid being taxed at the state level. Guess what? DraftKings would like to do that.

2:07FanDuel would like to do that. BetMGM would like to do that. But they're following the law. These guys are breaking the law. And Palantir is joining the wave of companies and wealthy people who are moving to Florida. The software giant is once again moving its HQ. It swapped Palo Alto for Denver back in 2020, and now it's headed to Miami, sitting governor of Florida Ron DeSantis on the tax-driven influx of new residents. I saw you in California, and I will tell you, this wealth tax is having a huge impact on people fleeing to Florida. You know, six months ago, everyone was talking about Mindami causing New York to flee.

2:48I don't know that we've really seen that, but on this California thing, these are really, really big folks. It's Friday, February 20th, and Squawk Pod begins right now. Stand, Andrew, bye. In three, two, one, Q, Andrew. Good morning. Welcome to Squawk Box on this Friday morning right here on CNBC. We're live at the NASDAQ market site in Times Square. I'm Andrew Ross Sorkin, along with Joe Kernan. Becky's still off today, but we're not. We're here and we're still going. We're watching shares of private capital manager Blue Owl. They fell close to 8 % yesterday. The company said it had sold$1.4 billion in assets from several funds and would return some cash to investors.

3:30Blue Owl also saying it's going to prevent investors in the fund from withdrawing money every quarter. Shares of private equity firms losing round yesterday, as you can see, pretty significantly. And a statement blew out, said contrary, though, to what has been reported by some, we're not halting investor liquidity in OBDC2. In fact, we're accelerating the return of capital. This asset sale will return 30 percent of OBDC2 investors' capital at book value to shareholders equally on a pro rata basis. instead of resuming a 5 % quarter tender, we're only tendering investors that get a small portion of the capital back.

4:14We're returning six times as much capital and returning it to all shareholders over the next 45 days. And that's their statement. In the coming quarters, we will continue to pursue this plan to return capital to the OBDC2 investors. We just had the president and the CEO, rather, of Blue Owl on two weeks ago, and he said everything is hunky-dory. in the universe. And of course, everything is not hunky-dory. It can happen quickly or it can be whistling past the graveyard. I have a solution, by the way. I want to propose to you. Not about watches. Oh, I thought you were going to... Well, we can talk about the watches in a moment.

4:50No. On this blue owl business. It's out of my price range. The semi-liquid, what they call semi-liquid instruments, where basically you can buy it on any day, but you basically can't necessarily sell it on any given day. Right. And they can put these gates up if they want, which, by the way, is supposed to be a feature and not a bug of the program. Right. I think that they should only be offered in almost like a target dated approach to investors. So if you are 20 years old, 30 years old, 40 years old, it may very well be that you can live without the money on the other end. Right. And this is actually, on a long term basis, a great way to do it.

5:32Right. It seems to me that if maybe you're 50 years old or 60 years old or 70 years old. I don't like where you're going now with this. 80 years old. Start with 80. Start with 80. Because you might only live to 95. Let's say you're 60 years old. Maybe you should not be allowed to be in these funds. Right. That's, well, I mean, 60, 80, at least go 70. You could get it out within five years probably, right? Well, that's the question. And this is the whole issue about these semi-liquid instruments. And a lot of different instruments like that. There are many. Even life insurance. Some universal life doesn't really help that much until...

6:10But most people aren't buying... I mean, look, Blue Owl Capital, which we're just wearing on the screen right now, this is not a semi-liquid instrument, let me just be clear. But some of these funds that are underneath Blue Owl are. And so the question is, if this is the future, by the way, of where we're going to allow these private, either credit instruments or private equity instruments or real estate instruments or other kinds of instruments that look like this. You've got to get used to the illiquidity. We've got to get used to the illiquidity. And the question is, how should you live with that?

6:42And I think it's about a target dated approach. Anyway, that's my thought of the morning. Well, you could, you know, you've got a future in finance. Thank you. Sticking with private credit this morning, some new reports, this one coming from Bloomberg, saying that Bank of America is going to use$25 billion of its own money on deals with agreements originating in BV's Capital Markets Division. The report says the Bank of America tapped new leaders for the private credit drive. So the space is still heating up. Meantime, oil prices in focus. We've got to tell you about where things are happening, or what's happening now with some of the increased tension in the Middle East.

7:21President Trump saying he's going to decide in the next 10 days whether to launch military strikes against Iran. We're either going to get a deal or it's going to be unfortunate for them. I would think there will be enough time, 10, 15 days, pretty much maximum. That was President Trump on Air Force One yesterday. The U.S. has been building a major military presence in the Middle East, an aircraft carrier already in the region, with a second one on the way. The Wall Street Journal reporting the president is considering a limited strike on Iran to pressure the country to make a deal on ending nuclear enrichment.

7:56If Iran doesn't respond, the journal says the U.S. could launch a broader campaign. It seems like Iran is taking it seriously. They're doing, you know, the leadership, they're making sure that it's dispersed in cases. They're doing a lot of things in preparation for what they think is coming. On our side, it seems like it's a very limited option that's being considered. The legendary Hollywood director James Cameron now weighing in against Netflix's proposed acquisition of Warner Brothers Discovery. In a letter obtained by CNBC that Cameron sent to Utah Republican Senator Mike Lee, the Titanic director said the potential deal could lead to massive job losses in Hollywood, decimate the movie theater business, and affect one of America's biggest export sectors.

8:43Senator Lee chairs the chamber's subcommittee on antitrust. I trust in response to a request for comment, Netflix pointed to its written testimony at a congressional hearing earlier this month, which said under that deal, Netflix would increase production investments. Separately, Reuters reporting that Netflix has what sources called ample cash and could increase its offer for Warner Brothers if Paramount Skydance ends up deciding to bid. And we're going to find out in literally just days how this is all going to shake out. I think this is the weekend. It was a deal weekend tier. But it was weird when it was announced.

9:22Some of the people that said they weren't as concerned about Netflix. I can't remember. I think even Adam Aaron may have said that he, remember, I don't think he said that it would be the end of AMC. So some people, it seems like the knee jerk take would be the James Cameron take. That it would be bad for the movie business. Unfortunately, Hollywood was faced with Netflix or the Ellisons, which is for people in Hollywood, anyone that doesn't think Trump is Satan, they don't want him running. So what do you call that when it's both options are really bad for Hollywood? It's a double-edged sword?

10:05No, it's worse. It's a conundrum? Conundrum, it's a lose-lose. They don't like Netflix or the Ellisons. Oh, yeah. No, they would much prefer just to keep all these things separate. That would be the better path from a creative perspective, probably. And the Supreme Court could rule as soon as today on President Trump's authority to impose tariffs. And Eamon Javers joins us now with more. There's been so many tea leaves to read. as the Supreme Court had a chance. How many times previous to this, Eamon, we were waiting and they didn't. And a lot of people thought, because of the urgency that everyone said around the decision, everyone thought that they would do it much sooner.

10:55But it's a mystery. It's a mystery. The Supreme Court, they like that. Everyone did think that, Joe. They like that, though, don't they? It's a mystery. It's impossible to figure out. It's kind of a judicial flex. Is it? Right? So what do you think? Today's the day? That's the power. Yeah. I don't know. We've been through this drill a few times now already in 2026. As you say, Joe, the Supreme Court announces a decision day, but we just don't know what cases are going to be decided until the notices start coming out at 10 a.m. Eastern time. So it's possible that we'll get a ruling on the legality of President Trump's Liberation Day tariffs this morning or a ruling on whether the president can fire Lisa Cook from the board of the Federal Reserve.

11:36but there's just no guarantee. So let's start with tariffs. There are literal billions of dollars at stake in the decision on whether the president's use of the International Emergency Economic Powers Act, which people in Washington call IEPA for short, was appropriate because that statute authorizes a president to regulate international commerce in an emergency, but does not mention tax or tariff power. Now, the decision won't affect all the tariffs that President Trump put in place last year because he used other authorities to impose some of those tariffs. But of the$293 billion in total tariff revenue collected in 2025 and 2026, so far, $133 billion of that was collected under IEPA.

12:24And that money would presumably have to be paid back to the American companies that it was collected from if President Trump loses this case. And then there's also the question of the president's attempt to fire Lisa Cook as a member of the board of the Fed. At some point, at some point, the Supreme Court is expected to weigh in on whether the president has the authority to fire her based on unproven allegations of mortgage fraud in her personal residence. The question will come down to what the definition should be of a four cause firing. Does that have to be adjudicated wrongdoing or can mere allegations even a president's whim, be enough to have the president have the authority to fire her.

13:08The way the Supreme Court decides on that could alter the future of Federal Reserve independence from the political system. So we're going to have to watch all of this and maybe we'll be all dressed up with no place to go again or maybe not. Could be a big news day, guys. We should always be prepared. But as I said, there are so many different ways to read the tea leaves. Some people said, well, you know, Chief Justice Roberts realizes all the ramifications and they're trying to thread some type of needle. And it's taking a longer time to figure out how to have some type of narrow or more narrow ruling than just a thumbs up or a thumbs down on the tariffs.

13:48And then the prediction markets move around based on how long it's taking. And the odds of I think at one point it was 90 percent from the questions that the justices had asked. I think it was 90 percent that it was going to be against. And then it takes a while and it goes to, you know, that drops to 75 percent. But nobody knows. I just think it's kind of cool that the Supreme Court of all the institutions is still. I know it's maybe not as revered, people say, as before in public opinion, but there's still something about it. and those robes and the mystery. And we just can't. Eamon, there's no cameras in there.

14:27Yeah. And there's no there's no we can't explain why it's taking a long time. It just is. It's it's a mystery. It's a mystery. I want to know how many Supreme Court clerks are placing prediction market bets on this. Right. I mean, how many insiders exactly know the answer to this and are already betting? Look, I mean, I'm not a Supreme Court clerk. I couldn't even begin to tell you the inner workings of the Supreme Court. My guess, and just a guess, is that the fact that the tariff ruling is taking so long, despite the urgency, despite the fact that companies are still paying billions every month on this, is that they're trying to build some sort of coalition behind the scenes.

15:03I don't think the legal research and reasoning takes that long. I think coalition building and getting everybody on board probably does. Eamon, so people talk about trying to get to 9-0. Maybe Justice Roberts is trying to bring everybody together on this. The other view, though, is that there's a dissenter, or maybe more than one dissenter, and that they're just taking their sweet time trying to right that dissent, and for whatever reason, want to keep it going. What do you think of that perspective? I mean, it could be 12 angry men behind the scenes in the Supreme Court, and we would have no idea.

15:40Right. Right. Right. Or, I mean, it makes sense to me if you can if you can decide on a complete embargo, why can't you decide on a 10 percent tariff? I mean, there are times you need to have that authority as the chief executive. Maybe they maybe they are sympathetic to that argument. Avin, thanks. Cheese will be next. Next up on Squawk Pod, we're digging into prediction markets, gambling markets and the regulation for both with former New Jersey Governor Chris Christie. They would say that they are not the house. There is no house. Yes, there is. They're taking a cut. It's the same thing. If it walks like a duck and quacks like a duck, it's a duck.

16:21You're telling me that betting on how many people... I'm not. I'm saying that's the position that they are taking. It's a ridiculous position. These days, Christie is a strategic advisor to the American Gaming Association. And he's coming up right after this break.

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18:31Welcome back to Squawk Pod with Joe Kernan and Andrew Ross-Organ. The CFTC filing an amicus brief earlier this week defending its right to regulate prediction markets in a Wall Street Journal op-ed. Chair Michael Sella criticizing state's legal attacks on the agency's authority. Joining us right now is former New Jersey Governor Chris Christie. He's been outspoken on the rights of states to regulate sports gambling and currently is advising the American Gaming Association. And a quick disclosure, we should tell you that CNBC and Calci have a commercial relationship that includes CNBC having a minority investment in that company.

19:05And, of course, we run lots of different Calci data on our screen and discuss it as we do others. But good morning. Good morning. I've seen you in quite some time. Good to see you, Andrew. So help us understand sort of where you land on this debate, this idea between the federal sort of umbrella over the country versus what states should be allowed to do in this context. You know, I'm confused that a Republican administration believes in greater federal regulation, greater federal oversight and overreach when the states are already doing a great job at what's happening. You have 40 states that have legalized gaming across the country.

19:46They set up their own regulatory schemes, their own taxing schemes, their own schemes to protect consumers and the integrity of the game. And it's working across the entire country. Now, all of a sudden, the CFTC wants to come in and become the National Gaming Board. How about if they focus on what they're supposed to be focusing on, which is things like derivatives in the agriculture sector and the things that they've been doing all along? Instead, now they want to become why? Because there's any problem? You don't hear any problem across the country from anybody. So what do you think is driving this?

20:19Look. Is this lobbying money? Well, look, I think there's lobbying money involved. I think what Cal Sheep, Holly Market, and some of the other companies have is a huge amount of cash. And they're spending that cash, as you can tell, on advertising. But also they're spending that money in Washington, D.C. Look, we fought for this. You know, this is a fight that I started in 2012 to allow states to make the decision of whether to have sports gambling or not. It was a six-year fight to finally get the Supreme Court to do it. And when they said we could do it, they said this was a states' rights issue.

20:52States went out and made the decision. What's going on with Cauchy and Polymarket now is they're violating laws in all 50 states. In the 40 states that have gambling, they say if you want to offer gambling to folks, come and get regulated and licensed and do what you need to do inside the state. For the 10 who don't want it, they're going over the top and saying, we're going to give it to you anyway. So in a state, for instance, like Alabama, a state like Georgia, who said, we don't want it. Utah, we don't want it. They're saying, too bad. You're going to get it anyway. Have you seen it? All of those states have not filed suits, though, yet.

21:25Not all, but it's coming. It's coming. It's coming. Because, and look, it's stupid when, you know, the head of the CFTC gets on and, like, challenges the nation's governors. and says, bring it on. We'll see you in court. I mean, does he really want 50 states to be filing lawsuits? And do you think about this in the context just of sports gambling, or do you think of this in the context of basically being able to, quote-unquote, bet on who's going to be elected? Or do you put them in the same category? No, not my issue. Why is that not your issue? Because part of what's happening here is— Because the states are not doing that.

21:59Look, Andrew, we'll be really clear about this. I have nothing against Cal State or Polymarket. If they want to offer sports gambling, fine. Then come into New Jersey, come into Iowa, come into any of the states that have it, register, get licensed, and pay your taxes. They would say they're not in the gambling business. Well, come on. So now, I heard this the other day. Just from a technical perspective, I'm projecting. They would say that they are not the house. There is no house. Yes, there is. They're taking a cut. It's the same thing. If it walks like a duck and quacks like a duck, it's a duck.

22:33You're telling me that betting on how many people. I'm not. I'm saying that's the position that they are taking. It's a ridiculous position. On opening day in baseball season this year, Yankee fans are going to be able to go on Cal Shea and Polymarket and bet the over, under, and how many strikeouts the opening day pitch drop. That's a derivative? You're a business network. That's a derivative? It's not. It's a sports bet. And that's fine if they want to be in that business. And by the way, it's 90 % of their revenue is sports betting. 90%. So please, spare me. What they're trying to do is avoid regulation and avoid being taxed at the state level.

23:07Guess what? DraftKings would like to do that. FanDuel would like to do that. BetMGM would like to do that. But they're following the law. These guys are breaking the law. Just to put it out there again, you are, though, being paid by the Gaming Association, which represents the interests of those who have already followed the state path. Absolutely. But let me say this. I'm also the one who fought to create this entire industry. No, no. I'm not saying you don't. You have an authentic claim on it. I just wanted to. My goal in this is to allow the states to have the rights I fought for them to have.

23:43Right. And they have those rights. And by the way, if there was a horrible bunch of stuff going on where the states were proving they could not regulate this appropriately, then I can understand why the feds would want to come in. There is no excuse for the federal government to come in. And how are we having a Republican administration who says they're for deregulation now decide they want to become the National Gaming Board? Let me ask you a related question to that, which is that Eric Trump happens to be the son of the president, happens to be an advisor to both Polymarket. Is it Eric? I thought it was Donald.

24:16I'm sorry, Don Jr. I apologize. Don Jr. Happens to be an advisor to both Polymarket and to Cal State. Does that present a problem to you? Look, I'm not going to be here this morning to discuss the various personal conflicts that the president's family has with federal regulation. It is what it is. They're doing it. And whether I would hope, I would hope that that does not have an influence on the chairman of the CFTC. But everyone can take a look at it and make their own judgment. I think this is a bigger position. Here you are saying the administration is doing the wrong thing. That's why I'm asking you.