Regulating Prediction Markets & Meta’s $375M Lawsuit 3/25/26

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1:06On today's episode, on Capitol Hill, a deal to fund the Department of Homeland Security has stumbled. As Democrats draw a hard line on ICE. And TSA lines at the airports keep building up. Two lawmakers join us. First, Republican Senator John Curtis of Utah. The false narrative is that you can't have rule of law and compassion. And I think that's what our country is built on. I know those are Utah values. And Democrat Senator Adam Schiff of California. Before we fund, for example, ICE agents or Customs and Border Protection, we should insist on certain safeguards, namely that they operate with the same standards we ask of a local police department.

1:49We're asking neither more nor less than a local police department. Then the first standalone case by a state against a social media giant. And the state won. New Mexico Attorney General Raul Torres on the victory against Meta, which was found liable for misleading consumers about the safety of its platform and endangering children. We want accountability. We want safety. And what we want fundamentally is a safer space and a safer experience for our kids online. Plus, Washington's push to regulate prediction markets. OpenAI shutting down its video app, Sora. And President Trump says the U.S. and Iran are indeed in talks.

2:33Though Iran denies it. We know about the fog of war. There's been a fog of diplomacy. It's Wednesday, March 25, 2026, and Squawk Pod begins right now. Stand back to bye in 3, 2, 1. Cue it, please. Good morning, everybody. Welcome to Squawk Box right here on CNBC. We are live from the Nasdaq market site in Times Square. I'm Becky Quick along with Joe Kernan. Andrew is out today. The Associated Press is reporting Iran has received the Trump administration's 15-point plan to reach a ceasefire in the nearly month-long Middle East war. We've been, since Monday, We've been talking, conjecturing, going back and forth.

3:19And there's a pretty interesting take, as we see a lot of times in the lead editorial and journal. It sums up everything we've been trying to sift through. And the title is The Fog of Diplomacy. So we know about the fog of war. There's been a fog of diplomacy in Iran. And it's interesting. They go on to say Mr. Trump's incentive was to calm the markets with news of diplomatic success. Iran's propaganda is to deny, deny, deny and keep the markets roiled. All this, though, has been happening as Marines are headed and the Air Force headed. And that's where they go on to say, call it Trump style diplomacy.

4:02One hand extends at the beginning of the week while the other hand visibly winds up for a punch. Was this his plan all along? And we've said that. Is it another one of those things where Iran can choose whether to test whether he's serious about this? They keep saying, we're not talking, we're not talking. Well, they may get a chance to see what the consequences are. Yeah, it's been really interesting because the fog of diplomacy includes the idea that we don't know who's in charge. You might be speaking with civilian leaders who aren't on the same page with the IRG. So it's hard to say how this works.

4:41The place has kind of been blown apart in some ways. They go on to talk about that, too. We know supposedly who the guy is. Would the guard follow him, the Revolutionary Guard follow him? The guard has some pretty strict rhetoric that they've been putting out themselves. It doesn't follow along with Mr. Galiboff, I guess his name is. Right, and the idea of what it would take to get to the table, what they're asking to get to the table, is almost non-starter on every one of the points that they've laid out. Everything from a legal agreement that the United States and Israel would never attack again, never attack them at all, to reparations, billions of dollars in reparations for the damage that have been done, to the idea that there would now be a toll booth that the Iranians run on the Strait of Hormuz.

5:24It's$160 a barrel is what it's going through right now. That's what people are paying for Jeff. They need it. They got it. They got to get through. And again, yesterday, New York Times, they like this word. Today, it's The Washington Post. This is the word. Whenever Trump says anything now in mainstream media, it's going to be. Well, I will say claims fits very nicely in a headline. It does. A one-power headline. It does. But it also, it implies he's saying this. We don't really believe it. What I would say is it shows that the Trump administration is saying this. What you're hearing from Iran is very different rhetoric and propaganda.

5:59You could call it whatever you want. But I will also say the market has been reading this as a repeat of what we saw last April with tariffs. And that was a situation where the president alone had the power to say this is on, this is off. It's a little more complex once you get into a wartime situation. And you have to deal with not only other nations, but the idea that we don't even know who's in charge in Iran. But for those people that have watched the president in the first term of this term, his critics say that if you're generous, he exaggerates. If you're nasty, it's lie after lie after lie is what you hear.

6:34But it's sad that we're in a default position now. We're mainstream media. And a lot of people, the first knee-jerk response is to believe Iran before you believe Trump. But I don't think using the word claims is suggesting you would believe Iran over President Trump. I'm not talking about just that. I'm talking about in general. You haven't seen it. I've seen it. I've seen it depending on there's different variations and different flavors. But this is a regime that for 47 years, all they've done is lie and kill people and support terrorism. I'm not defending that at all. Any move, the slightest bit to have empathy.

7:11I'm not defending that, and I understand the point that this is Baghdad, Bob, every time we hear them. It's just we don't know who the spokesperson is there. We don't know anything about what's coming. I've seen in certain political circles the default move has been to basically be defending Iran or saying, not defending him, but sort of taking the enemy of my enemy. If it has to do with Trump, I'll go with Iran. I don't know. That's a pretty big stretch to take enemy as my enemy with Iran. It is. That's why I'm saying it's pretty unbelievable. China is reportedly preventing two tech founders from leaving the country as regulators are examining whether Meta's acquisition of their company violated Chinese investment rules.

7:58The Financial Times says that two Singapore-based co-founders of AI agent company Manus were summoned to a meeting in Beijing earlier this month, but told afterwards that they couldn't leave because of a regulatory review. The FT says no formal investigation has been opened. No charges have been brought. Meta acquired Manus for$2 billion last year, but China is currently reviewing that deal. So I hope they like China. be there for a while, I guess. That would be scary. You've been. Note to self, don't go if summoned. Like, okay, no, I'm going to stay in Singapore. I often thought of people that, some people, the China hawks, I wouldn't recommend.

8:43Going and traveling there. Although I guess the question is, do they have family there too? Because that could be the threat. You've got to go back if you've got family. OpenAI will shut down its video generation app, Sora, as it focuses more on business and coding. Sora briefly went viral last fall, but also raised alarms about copyrights in Hollywood, as countless AI-generated videos were posted of celebrities doing some pretty outlandish things. Disney made a billion-dollar deal to bring its characters to Sora, but sources tell CNBC that that deal never closed. The cheese will be next. Coming up on Squawk Pod, bipartisan support for the Prediction Markets Are Gambling Act with Republican Senator John Curtis.

9:30We're not banning sports betting. We're just simply putting it in the right places to be regulated. And one of those places is in the state. And Democrat Senator Adam Schiff. We've seen reports, for example, recently that someone with 93 percent accuracy has has been predicting what's been going on in the Iran war, that's heavily suggestive of insider trading and what it could be done using blockchain. There's no way to really regulate that. Plus, the DHS funding debacle on Capitol Hill and at airports around the country. It all comes down to ICE. It is also a false choice to say, well, we can't have a strong border unless we also allow indiscriminate immigration sweeps that cause chaos in our streets like we saw in Minneapolis.

10:17We'll be right back.

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11:52Welcome back to Squawk Pod from CNBC, today with Joe Kernan and Becky Quick. Let's get to Washington, D.C., and the efforts there to try and hash out a deal to fund the Department of Homeland Security. Emily Wilkins joins us with the latest. Emily, got any good news for us? Becky, I'm not sure the news is good. It's probably not bad, though. Look, lawmakers, they're still hashing out these details for a proposal to end the homeland security shutdown and try to relieve those long lines for TSA at airports. Senate GOP leaders, they're really right now behind this two-part deal. First part would fund nearly all of DHS and the parts of ICE that address things like drug smuggling, human trafficking.

12:33It would end those long lines at airports. The second part, which would come later, would see Republicans go ahead and pass additional funding for ICE, as well as portions of that Election Reform Act. And that would be done through a process that doesn't require Democratic votes. But many Democrats have said that they don't like that first part. They don't want to fund any part of ICE. Talking with Senator Tim Kaine yesterday, and he told me that the agency already has plenty of funding to carry out all of its roles and doesn't need additional spending at this point. Here he is speaking with reporters.

13:08They pre-funded ICE. So the lines that are stressing people out, the fact that we have coasties who are deployed on Navy ships where the sailors are getting paid and they're not, that we have states that are planning on emergency prep and FEMA is closed. Just open the agencies, for God's sake. President Trump has also yet to firmly weigh in one way or the other on that proposal. He did say yesterday he has concerns about a compromise with Democrats but would take a closer look. Republicans told me they are confident that the president will ultimately back it. But it's clear that we have a ways to go before Democrats and Republicans have enough vote to pass a funding bill and stop these long lines at airports.

13:51Guys? Okay, you're not an official whip of either of the parties, Emily. But if you had to kind of do some math yourself and try and figure out when this might break, what would it take if we're still a long way off from being able to gather those votes? Yeah, I think, Becky, the question is how many Democrats are willing to break with their party to end the bulk of this shutdown, even if they don't get larger reforms when it comes to ICE and are willing to fund some of the maybe less controversial aspects of what ICE does. Republicans are betting that they can get to that magic number of seven.

14:26Maybe you wind up needing eight Democrats who can cross the aisle. I think it is going to take more conversations throughout today. If there is a deadline that senators want to get home at least by Friday, they don't want to be here another weekend. So that's where a lot of the pressure is coming from right now, because otherwise they could be here for the next two weeks and forfeit their Easter recess they were all planning to take. I think my favorite piece of news that I heard today was that Delta has shut off its congressional perks program, where generally they will take a congressional member and escort them through so they don't have to wait in lines.

15:01And they've decided it's more important to focus on their staff and their customers at this point. So they have suspended that program. It's weird, Emily, because we keep hearing it's, you know, well, both sides, blah, blah, blah. But you just said it. Seven Democrats need to break with their party that is keeping it closed. If it is a clean DHS funding where you didn't have a carve out, where you weren't like stomping your feet and saying, give me this or we're going to close it. Very similar to the last shutdown. How did that work out? The last shutdown. The Unaffordable Care Act never got those subsidies, never got the pandemic.

15:39They didn't do it when they had a chance to extend those subsidies. That never happened. The sun is still coming up every morning and they got nothing for it for all the pain that they put everyone through in that last shutdown. And it's the same we're seeing the same movie once again. I mean, if you just want to cut the brass tacks. Yeah. And I mean, Joe, I should be clear that that sort of part one, it does include some reforms for ICE, things like funding for body cameras, things that were already agreed. But it doesn't go nearly as far as many Democrats want to see it. And what you heard from majority leader John Boone yesterday.

16:12This wasn't about reforming. This is about DHS funding during a war, a clean DHS funding, which includes TSA and includes yet includes ICE. But it's a that's already funded till 2029 anyway. It could have been a clean funding. And this is a this is extortion, just like the last one was just extortion. Why would Republicans fold? I mean, I think for a lot of Democrats, they believe that the American people were upset with some of the things that they've seen with ICE, that the American people on their side are pushing for reforms. Obviously, divisions within that, within the country right now, but at least Democrats feel like they have the leverage right now to continue to fight for and to push for it.

16:53But I think at the same point, yes, you are seeing pressure increase with TSA. That could bring this to a close sooner rather than later. Yeah, they have leverage with the long lines. They're holding people, extorting people with long airport lines to get something that they want that should be done at another time if they're really going to do it. Anyway, Emily, thank you.

17:16A bipartisan group of senators is taking on the CFTC and prediction markets with new legislation. The Prediction Markets Are Gambling Act aims to clarify commodity markets are not casinos, in their words, and would officially ban sports-style betting. Joining us right now are the authors of the legislation, Democratic Senator Adam Schiff and Republican Senator John Curtis. And gentlemen, welcome to both of you. Why don't we talk a little bit about where you all see eye to eye and why on this? And Senator Curtis, why don't you talk about your concern with access to these markets in your state of Utah?

17:52Well, thank you. First of all, let me say we're not banning sports betting. We're just simply putting it in the right places to be regulated. And one of those places is in the state. And as you alluded to, Utah does not allow gambling in any form. So it's one of the things that's real important to me is that we don't take this control away from Utah. And Senator Schiff, you are concerned with what the CFTC has been doing with this. We've spoken with the CFTC chairman, Mike Selig. He does seem to be putting it out there that this is legalized and they are going to be protecting this because they say that these are futures contracts.

18:26Well, it's interesting because I asked the chairman about this during his confirmation hearings. Did he have a position on whether these contracts were gambling or sports betting? He said he didn't, that he was a tabula rasa, that he was going to leave it to the courts. But we're seeing something very different with him actively intervening to support these prediction markets, notwithstanding that they're really indistinguishable from sports betting. And in California, we don't allow sports betting. It ought to be up to the states to decide what kind of gambling goes on within their state. This kind of end run around the law is encouraging vast amounts of gambling.

19:04We saw a billion dollars of trading in prediction contracts just over the Super Bowl alone. That's something that ought to be decided state by state and not decided for them by this industry. Is part of the problem that this revenue, even if it's legalized, if sports gambling is legalized in a state, the revenue doesn't go back to the state if it's going through these prediction markets like it might in some other situations, too? I would say revenue is a piece of it, but a much larger piece is who should be regulating this, where that authority lies. I think we both feel strongly that is in the states.

19:39And going back to this prediction market and whether or not it's gambling, look, if it acts like gambling, if it talks like gambling, it is gambling, right? And that's been very clear where that belongs. I would add, too, in addition to the concern about revenue to the state, when it is completely unregulated like this, you could have, you know, vast amounts of insider trading, people who have particular insights, either because they're government officials or because they're the athletes themselves who can end up influencing the events they're betting on. We've seen reports, for example, recently that someone with 93 % accuracy has been predicting what's been going on in the Iran war.

20:21That's heavily suggestive of insider trading. And when it could be done using blockchain. There's no way to really regulate that, at least it's not being regulated today, and we want to make sure that there is regulation of this. You have to ask as well what... Oh, sorry, sir. Go ahead. Yeah, I was going to say you have to ask what could go wrong. Imagine betting on a high school athlete getting hurt the day of a high school game, right? Like that's why this needs the appropriate regulation. You can see how wrong that could go. The Calci itself took steps this week to say that, or maybe it was Polymark, it took steps to say that you couldn't have politicians betting on the outcome of their elections and that you couldn't have sports athletes betting on their own sports.

21:06Is that enough, that level of self-regulation, or you all think the regulatory thrust really needs to be coming from Washington? I don't think it's enough because it's one thing to say this is our policy, it's another actually to put into place the steps to make sure it's not happening on those platforms. You can say athletes can't bet on themselves, but if an athlete does, how will it be caught? What if an athlete's family member does? What if a government official's colleagues or family or staff bets on insider information? It's got to be more than an aspirational statement by these companies.

21:40Let me ask you both the big question on this, and obviously the opponents to these predictions markets are taking their fight not only through trying to influence legislators, but going through the courts too. And they have had some victories in the courts. If you want to do this, you have to pass the legislation. How much support do you have from your colleagues, both in the Senate and then in the House, if it were to make it to that point? Well, this might be a good opportunity to use the prediction markets to bet on that. I actually think both of us feel that there's a lot of momentum on both sides of the aisle on this.

22:14And I think you're going to see further legislation, not only from us, but from our colleagues on this, to get our arms around it and make sure it's done properly. I think that's exactly right. There's a lot of bipartisan interest and concern over this. That makes this one of those rare opportunities for the parties to get together and do something meaningful. So I'm optimistic. It shouldn't really be left to litigation. Frankly, I think the law already makes this clear. but the CFTC chairman is moving in a completely different direction of essentially unlicensed, unregulated activity here. So the Congress will need to step in.

22:50We should point out that at CNBC, we have extended an open invitation both to Calci and to Polymarket to join us right here on Squawk Box. And in full disclosure, we should point out that CNBC and Calci do have a commercial relationship that includes a CNBC minority investment. Gentlemen, I hear how much you agree with each other on this, but obviously there's a lot of areas where you disagree too. Why don't we talk about DHS funding and where each of you stand? Do you think that we will reach an agreement soon that will begin to start paying those TSA agents who have gone without pay for almost a month now?

23:26Listen, we were actually talking about that together before the interview started, and I think this is one of those areas where we agree on so much more than we disagree. And I think those areas of disagreement are getting narrower and narrower. I think we all realize we've got to solve this, And I think we're all committed to figure out how to get that last little bit across the finish line. Meaning that you think a resolution? Go ahead, sir. Yeah, I was going to say, I hope that we can reach a resolution soon. But even if there are issues that are going to continue to divide us, like over ICE and Customs and Border Protection, we should make sure the TSA gets funded, that we deal with this urgent crisis at the airports.

24:02That I think we're in easy agreement on. Total alignment, yeah. So should I assume that we would see something maybe potentially by the end of the week if you two can sit there and figure out a potential deal? Well, if it were up to us, we'd have it done by the end of this interview. But I know our colleagues are working hard and spending a lot of hours on this. Let me try this with you two buddies. Jim Jordan, he actually points out that the Judiciary Committee passed the Shut Down the Sanctuary Policies Act of 2026. there's 18 cities where there are sanctuary jurisdictions and major cities, 31.5 percent of the population is in an area where you can have a sanctuary city where federal laws, immigration laws are ignored.