Shares in Ladbrokes owner Entain PLC (LSE:ENT) led the FTSE 100 risers on Monday, leaping 8.4%, on the back of a Wall Street Journal report that legislation is being proposed that would essentially block betting on sports events on prediction market platforms such as Polymarket and Kalshi.
Predictions markets have been increasingly encroaching on the traditional sports betting market in the past couple of years.
In New York, FanDuel owner Flutter Entertainment PLC (LSE:FLTR, NYSE:FLUT) and Draftkings Inc (NASDAQ:DKNG) were up 6% and 3.6%. Entain operates in the US via a 50%-owned BetMGM joint venture with MGM Resorts International (NYSE:MGM), whose shares were up 7.1%.
The WSJ report said proposed bipartisan bill would bar platforms regulated by the Commodity Futures Trading Commission from offering contracts tied to sporting events.
"The CFTC is greenlighting these markets and even promoting their growth," according to Senator Adam Schiff, one of the two proposers of the law.
"It's time for Congress to step in and eliminate this backdoor which violates state consumer protections, intrudes upon tribal sovereignty and offers no public revenue."
A large chunk of prediction market activity has drifted into sports in the past year, effectively competing with FanDuel, DraftKings and BetMGM without the same regulatory baggage.
The proposal lands amid mounting pressure on prediction platforms, with the state of Nevada last week winning a temporary restraining order to prevent Kalshi from offering contracts related to sports games, entertainment and elections, while Arizona filed criminal charges against the prediction markets owners, accusing them of operating an illegal gambling business without a licence.
It also comes amidst mixed trends in US online gambling, highlighted by analysts at Jefferies, who noted that Flutter's new FanDuel Predicts app has gained early traction, with downloads reaching 183,000 in a week, briefly overtaking rival Kalshi following a marketing push.
Yet this burst of consumer interest contrasts with softer underlying performance in sports betting, with revenues under pressure, with year-to-date gross gaming revenue down 6% as margins tighten and betting outcomes prove less favourable.
There is some relief in sight, Jefferies said. Comparisons become easier in March after a difficult period last year, and early indicators point to a modest recovery in betting volumes. Meanwhile, the iGaming segment continues to expand, albeit at a slower pace, with analysts attributing the cooling to temporary factors such as lower recycling of customer balances rather than structural limits.
Even so, the divergence between strong user growth and weaker profitability highlights a sector still searching for consistent momentum.