Stocks of betting companies gain after new bill aims to ban sports gambling on Kalshi, Polymarket

By Weston Blasi

It's estimated that around 90% of Kalshi's prediction-market fees revenue has been tied to sports in recent months

Two lawmakers have introduced a bill that would ban sports contracts on prediction markets - and sports-betting stocks like DraftKings are rallying in response.

Sports-betting stocks got a boost Monday after news broke that two U.S. senators were introducing a bill that would ban prediction markets from offering event contracts for sports events.

Shares of DraftKings (DKNG) rose 1.2%, FanDuel parent Flutter Entertainment's stock (FLUT) was up 4.4%, MGM Resorts International (MGM) gained 4.4% and Penn Entertainment (PENN) climbed 5.6% during Monday's trading.

Sports-betting stocks have been hit hard so far in 2026, as investors worry about prediction markets eating into their market share of consumers who want to risk money wagering on event outcomes.

The bill - which was first reported by the Wall Street Journal and later confirmed by MarketWatch - aims to crack down on sporting-event contracts regulated by the Commodity Futures Trading Commission specifically. It would also look to prohibit casino-style games from prediction-market platforms such as Kalshi and Polymarket, according to the Journal.

(Prediction-market operator Polymarket has a data partnership with Dow Jones, the publisher of MarketWatch.)

Traditional sports betting, through platforms such as DraftKings and FanDuel, is regulated and legislated by U.S. states; there are states where people still cannot legally bet on sports. Prediction markets, on the other hand, are regulated by the CTFC, a federal agency, and are currently allowed in every state, with some exceptions. Prediction markets for sports are similar to traditional sports betting, but have some key differences.

The bipartisan bill was introduced by Sen. Adam Schiff, a California Democrat, and Sen. John Curtis, a Utah Republican. The bill does not take aim at event contracts on other outcomes, like Federal Reserve interest-rate moves or the price of a barrel of oil.

"Sports prediction contracts are sports bets - just with a different name," Schiff said as part of a statement announcing the Prediction Markets Are Gambling Act alongside Curtis.

"It's clear this bill is motivated by casino interests that are threatened by competition," Kalshi spokesperson Elisabeth Diana told MarketWatch. "They're more worried about protecting their monopolies than protecting consumers."

Kalshi co-founder and CEO Tarek Mansour lashed out against the bill, calling prediction markets a "better product" in a post on X.

Polymarket and Robinhood (HOOD), which also offers prediction markets for sporting events, did not immediately respond to requests for comment.

See: If you're trying to avoid an IRS audit, leave these three things alone on your tax return

While there are several hurdles for the bill to become law, prediction markets losing out on sports contracts would be a huge blow for them. Kalshi, for example, reportedly received around 90% of its revenue from fees through sporting-event contracts over several 28-day rolling-average periods.

Jordan Bender, a research analyst who covers the gaming industry for Citizens, told MarketWatch that "prediction markets are competitive - the most competition we have seen in the betting industry since the initial launch of regulated gambling in the U.S."

Several gambling groups also commented on the proposed bill on Monday.

"The introduction of the Prediction Markets Are Gambling Act is a critical step in reaffirming congressional intent that all gaming, including sports betting, is not a federal commodity, and is governed by state and tribal law," the American Gaming Association said in a statement to MarketWatch. "The AGA strongly supports this bipartisan effort, led by senators Schiff and Curtis, to uphold state and tribal sovereignty and protect consumers by ensuring sports- and gambling-related contracts are prohibited."

"Clearly, something needs to be done," Mick Mulvaney, who served as chief of staff in the first Trump administration, told MarketWatch. Mulvaney is now the executive director of Gambling is Not Investing, a coalition that advocates against unregulated sports betting via prediction markets.

"I'm glad to see members of Congress stepping up to ensure that all forms of sports betting are governed by the same state-set regulatory framework," Mulvaney added. "If it quacks like a duck, it's probably sports betting and it ought to be regulated as such."

Meanwhile, states are pushing back on sports-related prediction markets in their own jurisdictions. Recently, a judge in Nevada ruled that Kalshi must obtain the required state gambling licenses in order to keep offering its markets in the state.

-Weston Blasi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-23-26 1742ET

Copyright (c) 2026 Dow Jones & Company, Inc.