DraftKings Shares Rally as Bill Bans Kalshi, Polymarket Betting
Senators Schiff and Curtis introduced a bill to ban sports betting contracts on Kalshi and Polymarket, after Kalshi saw Super Bowl trading exceed $1 billion, a 2,700% year-over-year increase. The exclusion of state-regulated sportsbooks benefits DraftKings and fueled a share rally alongside Flutter Entertainment.
1. Bill Provisions
Senators Adam Schiff and John Curtis introduced legislation that would prohibit sports betting and casino-style prediction contracts on federally regulated platforms Kalshi and Polymarket, while leaving state-licensed sportsbooks such as DraftKings unaffected.
2. Competitive Impact
By explicitly excluding state-regulated apps, the bill grants DraftKings and Flutter Entertainment a competitive advantage, potentially driving users away from prediction markets and toward traditional sportsbooks.
3. Market Reaction
Shares of DraftKings and Flutter Entertainment surged on the day of the bill’s introduction, reflecting investor optimism that reduced competition from Kalshi and Polymarket will boost revenue and market share.
4. Prediction Market Performance
Kalshi’s Super Bowl trading volume exceeded $1 billion this year—a 2,700% increase from last year—and total U.S. sports wagers climbed to $121.1 billion in 2023, underscoring the rapid growth of prediction markets prior to the proposed ban.