Shares of DraftKings (NASDAQ:DKNG) and Flutter Entertainment (NYSE:FLUT) surged about 7% on Monday morning after a Wall Street Journal report said U.S. senators are preparing bipartisan legislation aimed at banning sports betting contracts on prediction market platforms.
The proposed measure would prevent entities regulated by the Commodity Futures Trading Commission from offering contracts tied to sporting events. This would affect prediction market exchanges such as Kalshi and the U.S. platform of Polymarket. The legislation would also prohibit casino-style offerings — including slot machines, video poker, blackjack and bingo — from appearing on these platforms.
Sen. Adam Schiff (D., Calif.) said the CFTC is effectively allowing these markets to operate and expand, arguing that Congress must intervene.
He said it is time for lawmakers to step in and eliminate “this backdoor which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue.”
Sen. John Curtis (R., Utah), who is co-sponsoring the bill, said many young people in his state are increasingly exposed to addictive sports betting and casino-style gaming contracts that should fall under state oversight rather than federal regulators.
The proposal would mark the first bipartisan Senate legislation aimed specifically at regulating prediction markets.