DraftKings shares tumbled on Wednesday after National Collegiate Athletic Association President Charlie Baker announced he is pushing to ban college proposition betting, a popular type of side wager that allows gamblers to bet on an event or statistical outcome that’s not directly tied to the final result of a game.
The company’s stock closed down 6.8% after slumping as much as 8.8%, also leading to losses for mobile sports betting peers including FanDuel parent Flutter Entertainment and MGM Resorts International. Baker announced that the NCAA is working with U.S. state legislators to remove college prop bets across the country, saying the organization is "drawing the line on sports betting to protect student-athletes and to protect the integrity of the game.”
The announcement came as the Wall Street Journal reported that federal lawmakers are seeking more oversight on gambling companies, urging them to stop using player data and other marketing tactics to target customers with gambling problems.