TLDR
- A bipartisan Senate bill aims to ban CFTC-regulated platforms like Kalshi and Polymarket from offering sports betting contracts
- DraftKings (DKNG) and Flutter Entertainment (FLUT) both rose around 8% premarket Monday
- The bill would also ban casino-style games like slots, video poker, and blackjack from prediction market platforms
- Sen. Adam Schiff and Sen. John Curtis are co-sponsoring the bill — the first bipartisan Senate effort to regulate prediction markets
- Several states including Nevada, Arizona, Massachusetts, and Michigan have already taken separate legal action against Kalshi
DraftKings (DKNG) jumped around 8% in premarket trading on Monday after the Wall Street Journal reported that a bipartisan group of U.S. senators is set to introduce legislation that would ban prediction market platforms from offering sports betting contracts.
The move was good news for traditional sports betting operators, who have long competed with platforms like Kalshi and Polymarket for the same pool of sports wagering dollars.
The proposed bill would prevent entities regulated by the Commodity Futures Trading Commission (CFTC) from listing contracts tied to sporting events. That would directly impact Kalshi and Polymarket’s U.S. operations — two of the biggest names in prediction markets.
The legislation would also ban casino-style games from these platforms, covering slot machines, video poker, blackjack, and bingo.
Sen. Adam Schiff (D., Calif.) said the CFTC is “greenlighting these markets and even promoting their growth,” adding that “it’s time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue.”
Co-sponsor Sen. John Curtis (R., Utah) said the issue was closer to home for him. “Too many young people in Utah are getting exposed to addictive sports betting and casino-style gaming contracts that belong under state control, not under federal regulators,” he said.
This marks the first bipartisan Senate bill targeting prediction market regulation — a milestone in what has been a growing fight between state regulators, federal bodies, and the platforms themselves.
Flutter Entertainment (FLUT), which operates FanDuel, also gained around 8% premarket on the news, as the bill would remove a key competitive threat to its core business.
The Legal Battle Already Underway
The legislative push comes as several states have already moved against Kalshi on their own. Nevada secured a temporary restraining order blocking Kalshi from offering contracts tied to sports, elections, and entertainment.
Arizona went further, filing criminal charges against Kalshi’s parent companies for allegedly operating an illegal gambling business without a license — though Kalshi has pushed back and urged the state to drop the case.
Massachusetts and Michigan have both sued Kalshi, arguing its prediction markets amount to unauthorized sports betting. Polymarket has also sued Michigan to prevent state gambling laws from being enforced against it.
At the federal level, the CFTC has maintained it holds exclusive jurisdiction over commodities derivatives, including event contracts. In February, it filed a brief in the Ninth Circuit supporting that position.
Where the Sports Leagues Stand
Most major U.S. sports leagues have been broadly supportive of legalized sports betting. When it comes to prediction markets, though, the picture is more mixed — with concerns around game integrity and the potential for insider information.
That said, Major League Baseball recently signed a licensing deal with Polymarket, giving it access to league data while also working together to monitor baseball wagers on the platform.
DraftKings has not made any public statement on the proposed legislation as of Monday morning.
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