Flutter Entertainment, parent company of FanDuel, rose 5%, while DraftKings gained 2.7%. Both stocks have suffered steep declines this year—around 50% and 32% respectively—amid concerns that emerging prediction markets could erode their dominance in online sports betting. Other operators with exposure to sports wagering also advanced, with Penn Entertainment up more than 6% and MGM Resorts gaining 5.5%.

Bipartisan bill seeks to curb prediction markets 

The rally followed the introduction of a bipartisan Senate bill led by Adam Schiff and John Curtis. The legislation aims to ban sports-related betting contracts offered through prediction markets, marking the third such proposal in Congress this month. It also seeks to prohibit “casino-style games” such as blackjack, slots, and poker on these platforms, tightening oversight of what lawmakers see as a growing regulatory gray area.

Curtis, a co-sponsor, said: “Too many young people in Utah are being exposed to addictive sports betting and casino-style contracts that should fall under state control, not federal regulators.”

Analysts view regulatory push as positive for sportsbooks 

Market participants broadly welcomed the measure, seeing it as a safeguard for established operators. Jordan Bender, an analyst at Citizens, told Barron’s that banning sports prediction markets would be “the ideal outcome” for traditional sportsbooks and online gaming companies.

DraftKings and Flutter have already invested in their own prediction market offerings to keep pace with the segment’s rapid growth. Bender noted that eliminating those investments could lift earnings estimates for this year and next, adding: “Removing this burden overall would serve as a positive catalyst for the stocks.”

Prediction platforms emerge as key disruptors Prediction markets have gained traction in recent months, with Kalshi reporting over $1 billion in trading volume last month, largely driven by sports-related contracts. DraftKings launched its own prediction platform late last year, with CEO Jason Robins calling the segment a “massive” incremental growth opportunity.

A ban, however, could hit platforms like Kalshi hard, where roughly 89% of revenues are tied to sports trading. “Banning sports betting in regulated prediction markets would only push this behavior overseas, where no regulation exists,” said Kalshi spokesperson Elisabeth Diana. “It’s clear this bill is motivated by casino interests threatened by competition. They care more about protecting monopolies than protecting consumers.”

Polymarket, another key player, also offers sports-related contracts, though much of its activity occurs outside the U.S.

Political uncertainty clouds outlook 

Despite bipartisan support, the bill’s future remains uncertain. Political dynamics could play a role, particularly given ties between prediction platforms and figures close to the administration. Donald Trump Jr. serves as an advisor to both Kalshi and Polymarket, raising questions about whether the legislation would receive executive approval if passed by Congress.