Key Takeaways
- Bipartisan legislation introduced in Congress would prohibit prediction market contracts covering sports competitions, political elections, and military conflicts while blocking insider trading by public officials
- DraftKings shares plummeted 12% over seven days to reach a 12-month bottom at $20.53, with Flutter declining 4% to its weakest level since 2022
- Trump voiced support for prediction markets in his first public remarks on the topic since assuming office, describing them as superior to “fake polls”
- Major platforms Kalshi and Polymarket implemented fresh integrity protocols barring politicians and industry insiders from specific contract categories
- Kalshi’s chief executive characterized the legislative push as defending gambling industry monopolies rather than consumer interests
On March 23, Senators Adam Schiff and John Curtis unveiled the Prediction Markets Are Gambling Act. This legislation would prohibit CFTC-registered organizations from offering event-based contracts that mirror sports wagering or casino-type gaming products.
The proposed law specifically targets contracts linked to athletic competitions, electoral outcomes, and armed conflicts. Additionally, it would prevent such contracts from superseding existing state regulations.
Schiff criticized the CFTC for “greenlighting these markets and even promoting their growth” rather than properly enforcing existing regulatory frameworks. He emphasized the necessity of congressional intervention.
Shortly afterward, Schiff and Curtis partnered with Senators Todd Young and Elissa Slotkin on companion legislation. The Public Integrity in Financial Prediction Markets Act of 2026 focuses on eliminating insider trading within prediction platforms.
This second measure would prohibit elected representatives and government workers from leveraging confidential information when trading prediction market contracts. Those found in violation would incur penalties starting at $500 or twice their trading gains, whichever proves greater.
Market Response to Legislative Pressure on Prediction Platforms
DraftKings shares tumbled to $20.53 on Friday, establishing a new 12-month low point. The company experienced a 12% decline throughout the trading week.
Flutter similarly suffered losses, dropping 4% during the same period and reaching $100 per share—a threshold not seen since 2022. Both companies have now shed more than 40% of their market value across the trailing 12 months.
Penn Entertainment, which hasn’t announced immediate intentions to enter the prediction market sector, finished the week at $13.77—registering modest gains.
Tarek Mansour, Kalshi’s chief executive, issued a forceful rebuttal to the proposed legislation via X. He attributed the bills to the “casino lobby” and warned that restricting prediction markets domestically would merely relocate trading activity to foreign platforms.
“This bill isn’t about protecting consumers; it’s about protecting monopolies,” Mansour declared.
President Trump Issues First Public Statement on Prediction Platforms
Trump addressed prediction markets publicly for the first time since his inauguration. During a conversation with a New York University fellow documented by The Washington Post, Trump asserted that prediction markets demonstrated greater accuracy than conventional polling methods.
“They predicted me pretty right … by a landslide,” Trump stated. He dismissed traditional polling as “fake polls.”
During the final week preceding the 2024 election, both Kalshi and Polymarket showed Trump’s victory probability hovering near 65%. Kalshi platform users generated $535 million in trading volume on presidential election contracts throughout that election cycle.
Trump refrained from addressing the pending legislation or recent concerns regarding insider trading connected to contracts involving foreign political figures. His social media company Truth Social finalized an agreement with Crypto.com last October to provide prediction market services, though no official launch timeline has been announced.
Donald Trump Jr., the president’s son, serves on the advisory boards of both Kalshi and Polymarket.
Coinciding with the introduction of the first bill, Kalshi revealed enhanced integrity protocols. The platform announced it would prevent politicians, athletes, and other politically connected individuals from participating in specific sports and political market categories.
As an illustration, all United States Senate personnel and elected members face trading restrictions on contracts pertaining to Senate electoral contests. These limitations extend to staff members of political action committees, news organization decision desk analysts, and vote-counting operation employees.
Polymarket similarly introduced revised integrity standards applicable to both its decentralized finance platform and its CFTC-regulated American exchange. The updated policies specifically address trading based on privileged information and unlawful intelligence sharing.
Neal Kumar, Polymarket’s chief legal officer, stated the revisions “make our expectations abundantly clear for every participant across both platforms.”
