Darren Rovell breaks down the Lakers sale: Walter's insurance problems, the casino economy, and why Whatnot is 90% gambling

Lakers, Gambling, and Whatnot

Mark Walter's exit from the Lakers is generating roughly $2 billion in profit. He bought in when Steve Ballmer paid $2 billion for the Clippers in 2014 and that price looked crazy; the Lakers are now changing hands at what Rovell estimates is $12.5 billion, somewhere between 20 and 23 times gross revenues depending on how LeBron James's departure affects the numbers. For context, Ballmer's Clippers deal was 12 times expected gross revenues at the time.

The speed of Walter's exit likely has a second driver. Rovell says he has spent years trying to understand Guggenheim Partners' insurance business and never could — "it's buckets upon buckets upon buckets" — and Bloomberg reported that Walter needed to arrange loans quickly to make certain third-party arrangements kosher. That opacity, Rovell argues, probably accelerated the timeline.

Josh Kushner and Bob Iger were reportedly looking at a Las Vegas expansion team as recently as a week before the Lakers deal was announced. Rovell was told the Lakers transaction happened in roughly the last hundred hours, suggesting this wasn't a years-long play for this specific asset.

“Mark Walter clearly did not say, oh, I could get in now and I could make $2,000,000,000 quick. The deal is now probably 22 to 23 times gross revenues. And on Whatnot: 90% of the activity is closer to gambling than commerce. If a bunch of attorneys general decide they're gonna go after breaking, whatnot's gonna go all the way down.”

Casino economy

Rovell's broader read on sports ownership is that fortunes are cycling faster than ever. He points to a hedge fund that scaled from $250 million to nearly $50 billion and round-tripped very quickly as an illustration. His argument is that more people will buy teams at massive valuations, and a higher percentage of them will lose that wealth just as fast, creating constant ownership turnover regardless of what the underlying asset does.

On institutional ownership: leagues currently allow up to roughly 30% institutional ownership in individual teams, and Rovell expects that ceiling to move higher. The Yankees' Apollo deal is an early signal. The one real brake on full institutional openness is stadium financing — leagues don't want the financial details of teams exposed to a broad investor base while they're still asking cities for public money.

Prediction markets

Rovell says prediction markets are "the craziest thing I've ever had to watch in my entire reporting life." He traces the arc from Gary Bettman promising to pull betting lines from the two casinos closest to T-Mobile Arena when the Golden Knights launched, to today's environment where Kalshi has markets on which flights will be delayed. He frames the entire category — prediction markets, pack breaking, collectibles — as the same dopamine loop: "We are a degenerate nation and this is the perfect and most horrible product."

His concern for Kalshi and Polymarket specifically is regulatory asymmetry. Sports books face what he calls "a complete proctology exam" while prediction market platforms have operated with a free pass, and he raises the question of whether that ends when the current administration changes.

Whatnot

Rovell puts 90% of Whatnot's volume closer to gambling than commerce. The dominant activity is "breaking" — buyers pay into a pool, typically $300 to potentially win $3,000, to have cards opened on a livestream, with the possibility of pulling nothing. He says that structure runs into lottery-rule problems in many states, and if attorneys general decide to move on breaking, Whatnot's business goes with it.

He admits he was wrong about the company early, dismissing it because the average transaction was around $15 and he didn't think they could reach critical mass. They clearly have. But his current view is that Whatnot should be building out traditional eBay-style memorabilia sales as an insurance policy against a regulatory crackdown on breaking — something he says the company hasn't invested in enough.