Key Takeaways
- Bipartisan legislation introduced in Congress seeks to prohibit prediction market contracts covering sports, elections, warfare, and bar government insiders from trading
- DraftKings shares plummeted 12% over one week, reaching a 12-month nadir of $20.53, while Flutter declined 4% to its weakest level since 2022
- Trump voiced his first public support for prediction markets since assuming the presidency, asserting they surpass “fake polls” in accuracy
- Both Kalshi and Polymarket implemented fresh integrity protocols preventing politicians and insiders from participating in specific contracts
- Kalshi’s CEO 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 contracts that mirror sports wagering or casino-style gaming products.
The proposed law specifically addresses contracts linked to athletic competitions, political races, and military conflicts. Additionally, it would ensure federal regulations cannot supersede state-level restrictions.
Schiff criticized the CFTC for “greenlighting these markets and even promoting their growth” rather than upholding existing regulations. He emphasized the necessity of congressional intervention.
Shortly thereafter, Schiff and Curtis collaborated 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 bill would prohibit elected representatives and federal workers from leveraging confidential information when trading prediction market instruments. Those found in violation would face penalties starting at $500 or twice their trading profits, whichever proves greater.
Financial Markets Respond to Regulatory Threats
DraftKings stock collapsed to $20.53 per share by Friday’s close, marking a new 12-month bottom. The company experienced a 12% decline throughout the trading week.
Flutter similarly suffered losses, dropping 4% weekly and breaching the $100-per-share threshold for the first time in two years. Both companies have witnessed their valuations erode by over 40% across the past year.
Penn Entertainment, which has not announced immediate prediction market initiatives, finished the week at $13.77—recording modest gains.
Kalshi CEO Tarek Mansour delivered a forceful rebuttal to the proposed regulations via X. He attributed the legislative effort to the “casino lobby” and warned that prohibiting prediction markets would merely relocate operations to international jurisdictions.
“This bill isn’t about protecting consumers; it’s about protecting monopolies,” Mansour declared.
Presidential Endorsement Marks First Public Commentary
President Trump addressed prediction markets publicly for the first time following his inauguration. During a conversation with a New York University fellow documented by The Washington Post, Trump contended prediction markets demonstrated superior accuracy compared to 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, Kalshi and Polymarket both indicated approximately 65% probability for a Trump victory. Kalshi users generated $535 million in trading volume on presidential election instruments that cycle.
Trump refrained from addressing the pending legislation or recent controversies surrounding insider trading allegations connected to contracts speculating on foreign leadership outcomes. His social media venture Truth Social finalized an agreement with Crypto.com last October to develop prediction market offerings, though no deployment 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 initial bill, Kalshi announced new integrity measures. The platform stated it would prohibit politicians, athletes, and other politically exposed individuals from participating in designated sports and political markets.
As an illustration, all United States Senate personnel and legislators would be barred from trading instruments related to Senate electoral contests. These limitations extend to employees of political action committees, news organization decision desks, and vote-counting entities.
Polymarket similarly introduced enhanced integrity protocols for its decentralized finance platform and CFTC-regulated domestic exchange. The revised guidelines address trading based on privileged information and unlawful insider tips.
Polymarket’s chief legal officer Neal Kumar explained the modifications “make our expectations abundantly clear for every participant across both platforms.”
