Key Highlights
Contents
- Bipartisan congressional legislation seeks to prohibit prediction market contracts covering sports competitions, electoral races, and military conflicts while addressing potential conflicts of interest among government personnel
- DraftKings shares plummeted 12% over seven days, reaching a yearly bottom of $20.53, while Flutter declined 4% to its weakest position since 2022
- The president voiced his first public support for prediction markets since assuming office, describing them as superior to “fake polls” in accuracy
- Both Kalshi and Polymarket implemented fresh integrity protocols preventing politicians and insiders from participating in specific contracts
- Kalshi’s chief executive characterized the legislative proposal as defending gambling industry monopolies rather than consumer interests
Senators Adam Schiff and John Curtis unveiled the Prediction Markets Are Gambling Act on March 23. The proposed legislation would prohibit CFTC-registered entities from offering event contracts resembling sports wagers or casino-style gambling products.
The legislative measure specifically targets contracts connected to athletic competitions, electoral outcomes, and military engagements. Additionally, it would block these contracts from superseding state-level regulations.
Schiff criticized the CFTC for “greenlighting these markets and even promoting their growth” rather than implementing proper enforcement. He emphasized the necessity for congressional intervention.
Several days afterward, Schiff and Curtis collaborated with Senators Todd Young and Elissa Slotkin on a companion bill. The Public Integrity in Financial Prediction Markets Act of 2026 focuses on preventing insider trading activities within prediction platforms.
The companion legislation would prohibit elected representatives and government workers from leveraging confidential information for prediction market trading. Those found in violation would incur penalties starting at $500 or twice their trading gains, whichever proves greater.
Market Response to Prediction Platform Legislative Proposals
DraftKings shares slid to $20.53 on Friday, marking a new yearly low. The company’s stock value decreased 12% throughout the trading week.
Flutter similarly experienced losses, declining 4% weekly and reaching $100 per share—its lowest valuation since 2022. Both companies have witnessed declines exceeding 40% across the past twelve months.
Penn Entertainment, which hasn’t announced immediate prediction market offerings, finished the week at $13.77. The company showed modest gains.
Kalshi’s chief executive Tarek Mansour strongly contested the legislation on X. He attributed it to the “casino lobby” and warned that prohibiting prediction markets would merely relocate operations overseas.
“This bill isn’t about protecting consumers; it’s about protecting monopolies,” Mansour stated.
Presidential Endorsement Marks First Public Commentary on Prediction Platforms
The president discussed prediction markets publicly for the first time since his inauguration. During a conversation with a New York University fellow documented by The Washington Post, he praised prediction markets as more reliable than conventional polling methods.
“They predicted me pretty right … by a landslide,” the president remarked. He dismissed traditional polling as “fake polls.”
During the final week before the 2024 electoral contest, Kalshi and Polymarket both displayed the president’s victory probability near 65%. Kalshi platform users generated $535 million in trading volume through presidential election contracts during that cycle.
The president remained silent regarding the pending legislation or recent controversy surrounding insider trading linked to contracts about international leaders. His social platform Truth Social established a partnership with Crypto.com last October for prediction market offerings, though implementation remains unscheduled.
The president’s son, Donald Trump Jr., serves as a board member for both Kalshi and Polymarket.
Coinciding with the first bill’s introduction, Kalshi announced new integrity measures. The platform stated it would prevent politicians, athletes, and other politically connected individuals from participating in designated sports and political markets.
As an example, all Senate staff members and senators would face trading restrictions on contracts involving Senate electoral competitions. The limitations extend to political action committee employees, news organization decision desk personnel, and vote-counting organization workers.
Polymarket similarly introduced revised integrity protocols for its DeFi platform and CFTC-regulated domestic exchange. The updated rules specifically address trading based on confidential data and unauthorized information.
Polymarket’s chief legal officer Neal Kumar explained the revisions “make our expectations abundantly clear for every participant across both platforms.”
