Casino stocks surge on bipartisan bill targeting prediction markets
DraftKings and MGM rally as Senate legislation would ban sports betting on Kalshi, Polymarket platforms
Casino and sports betting shares rallied on Monday after bipartisan senators introduced legislation that would ban prediction markets from offering sports wagering, potentially eliminating a competitive threat for state-licensed operators.
DraftKings gained as much as 9% in premarket trading before settling at $23.96, while MGM Resorts International surged 4.5% to $36.95. Flutter Entertainment, the parent company of FanDuel, climbed 4.4% to $109.38. The rally added approximately $3.7 billion in combined market value to the three companies.
The "Prediction Markets Are Gambling Act," introduced by Senators Adam Schiff (D-California) and John Curtis (R-Utah), would prohibit platforms regulated by the Commodity Futures Trading Commission from offering contracts on sporting events and casino-style games. The bill aims to close what Schiff described as a "backdoor which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue."
"Sports prediction contracts are sports bets – just with a different name," Schiff said in a statement. "It's time for Congress to step in and eliminate this backdoor."
The American Gaming Association, which represents traditional casino operators, strongly supports the legislation, calling it a "critical step in reaffirming Congressional intent that all gaming, including sports betting, is not a federal commodity, and is governed by state and tribal law."
Prediction market operators Kalshi and Polymarket, which operate under CFTC regulation rather than state gaming commissions, face significant disruption if the bill becomes law. Kalshi had handled approximately $1.9 billion in college basketball wagers in February 2026 alone, according to industry estimates.
The platforms argue that regulated prediction markets offer consumers a fairer alternative to traditional sportsbooks. Kalshi spokesperson Elisabeth Diana told reporters that "banning sports on regulated prediction markets would just push this behavior offshore, where no regulation exists," and suggested the bill is "motivated by casino interests that are threatened by competition."
The legislation follows increasing scrutiny of prediction markets at the state level. Arizona's attorney general has filed criminal charges against Kalshi for alleged illegal gambling, while Nevada temporarily banned most of Kalshi's operations earlier this year.
DraftKings, which reported $6.1 billion in revenue over the past twelve months, has faced intensifying competition in the US sports betting market. The company currently trades at 1.95 times sales, with analysts maintaining an average price target of $36.17. MGM Resorts, which operates physical casinos alongside its BetMGM sports betting joint venture, trades at a lower 0.55 times sales multiple with a $42.67 consensus target price.
The bipartisan nature of the bill increases its prospects for passage in a divided Congress. Senator Curtis, a Republican, emphasized that "addictive sports betting and casino-style gaming contracts" should be "under state control, not under federal regulators."
Industry analysts said the removal of prediction market competition could improve market discipline and pricing power for established operators like DraftKings, FanDuel, and BetMGM, which collectively control roughly 75% of the legal US sports betting market.