Entain surges as US prediction market faces potential sports ban

(Sharecast News) - Entain shares surged on Monday following a report that a bipartisan pair of US senators is introducing legislation to prohibit entities regulated by the Commodity Futures Trading Commission from listing contracts related to sporting events. According to the Wall Street Journal, the legislation includes prediction-market exchanges Kalshi and Polymarket's US platform.

"The CFTC is greenlighting these markets and even promoting their growth," Senator Adam Schiff. "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."

The legislation is the first bipartisan Senate bill seeking to regulate prediction markets. The bill also seeks to prohibit "casino-style games" from being listed on the platforms, such as slot machine games, video poker, blackjack and bingo, the WSJ said.

"Too many young people in Utah are getting exposed to addictive sports betting and casino-style gaming contracts that belong under state control, not under federal regulators," said Senator John Curtis, the proposed bill's co-sponsor.

While Kalshi and Polymarket offer yes-or-no wagers tied to everything from politics to the weather to pop culture, much of the trading activity is focused on professional and college sports, putting the platforms in competition with betting sites such as FanDuel and DraftKings, the WSJ noted.

"Banning sports on regulated prediction markets would just push this behavior offshore, where no regulation exists," said Elisabeth Diana, a Kalshi spokeswoman. "It's clear this bill is motivated by casino interests that are threatened by competition."

Shares of Ladbrokes owner Entain closed up 8.2% at 588.80p, while Flutter Entertainment ended 3.9% higher at 8,196p. DraftKings was 2% higher at $24.15 at 1710 GMT.

Dan Coatsworth, head of markets at AJ Bell, said: "Entain and Flutter were among the betting companies in demand on Monday after reports of legislation in the US which would effectively block betting on sports events on prediction market platforms like Kalshi and Polymarket.

"These prediction markets have been a nagging and essentially unregulated new source of competition for an industry which is already facing several headwinds around its own regulation, as well as diminished betting volumes.

"However, it could be some time before this competitive threat is neutered given getting legislative changes through in Washington can be very tricky, particularly if there are powerful vested interests involved."