TLDR
- Two bipartisan federal bills aim to ban prediction market contracts on sports, elections and war, and prevent insider trading by government officials
- DraftKings fell 12% in a week to a 12-month low of $20.53, while Flutter dropped 4% to its lowest price since 2022
- President Trump publicly endorsed prediction markets for the first time, calling them more accurate than “fake polls”
- Kalshi and Polymarket both rolled out new integrity rules to block politicians and insiders from trading on certain contracts
- Kalshi CEO called the proposed ban an effort to protect gambling monopolies, not consumers
Senator Adam Schiff and Senator John Curtis introduced the Prediction Markets Are Gambling Act on March 23. The bill would stop entities registered with the CFTC from listing event contracts that resemble sports bets or casino-style games.
The bill targets contracts tied to sporting events, elections and war. It would also prevent these contracts from overriding state law.
Schiff said the CFTC has been “greenlighting these markets and even promoting their growth” instead of enforcing the law. He called on Congress to step in.
Days later, Schiff and Curtis joined Senators Todd Young and Elissa Slotkin to introduce a second bill. The Public Integrity in Financial Prediction Markets Act of 2026 is aimed at stopping insider trading on prediction platforms.
That bill would ban elected officials and government employees from using nonpublic information to trade prediction market contracts. Violators would face fines of at least $500 or double the profit they made.
Wall Street Reacts to Proposed Prediction Market Restrictions
DraftKings fell to $20.53 per share on Friday, a fresh 12-month low. The stock dropped 12% over the course of the week.
Flutter also took a hit, falling 4% on the week and touching $100 per share for the first time since 2022. Both DraftKings and Flutter are now down more than 40% over the past 12 months.
Penn Entertainment, which does not have immediate plans to launch a prediction market product, closed the week at $13.77. That was up slightly.
Kalshi CEO Tarek Mansour pushed back hard against the legislation on X. He called it a product of the “casino lobby” and said banning prediction markets would only push activity offshore.
“This bill isn’t about protecting consumers; it’s about protecting monopolies,” Mansour wrote.
Trump Weighs In on Prediction Markets for the First Time
President Trump spoke publicly about prediction markets for the first time since taking office. In a phone call with a New York University fellow reported by The Washington Post, Trump said prediction markets were more accurate than traditional polling.
“They predicted me pretty right … by a landslide,” Trump said. He referred to traditional polls as “fake polls.”
In the week before the 2024 election, both Kalshi and Polymarket had Trump’s odds of winning around 65%. Kalshi users traded $535 million in volume on presidential election contracts that year.
Trump did not comment on the proposed bills or on recent insider trading concerns tied to contracts about foreign leaders. His social media platform Truth Social reached a deal with Crypto.com last October to offer prediction markets, though no launch date has been set.
Trump’s son, Donald Trump Jr., sits on the boards of both Kalshi and Polymarket.
On the same day the first bill was introduced, Kalshi announced new integrity measures. The company said it would block politicians, athletes and other politically exposed persons from trading in certain sports and political markets.
For example, all US Senate staff and members would be banned from trading on contracts related to Senate races. The restrictions also cover employees of political action committees, news organization decision desks and vote-tallying operations.
Polymarket also unveiled updated integrity rules for both its DeFi platform and its CFTC-regulated US exchange. The new rules address trading on confidential information and illegal tips.
Polymarket’s chief legal officer Neal Kumar said the updates “make our expectations abundantly clear for every participant across both platforms.”
