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Flutter and DraftKings both took share prices hits on Wednesday (27 March) after the NCAA called for a ban on college prop bets.

NCAA president Charlie Baker (pictured) said the student athlete association would be contacting state officials across the country urging them to impose a college sports proposition betting ban.

The news follows a series of sports integrity scandals for college athletes, with some facing criminal indictments for bets placed.

“Sports betting issues are on the rise across the country with prop bets continuing to threaten the integrity of competition and leading to student-athletes and professional athletes getting harassed,” said Baker in a statement.

“The NCAA has been working with states to deal with these threats and many are responding by banning college prop bets.

“The NCAA is drawing the line on sports betting to protect student-athletes and to protect the integrity of the game – issues across the country these last several days show there is more work to be done,” he added.

Both FanDuel operator Flutter Entertainment and DraftKings saw share prices slump on the news.

Flutter fell 8% on the NYSE to $197.63, before recovering to $202.00 by market close, a 6% decline from Tuesday evening.

The online and retail gaming giant has faced increased exposure to the ups and downs of US sports betting after listing on the NYSE in January.

At $44.88, DraftKings bottomed out at an 8.8% decline in share price. MGM Resorts also saw a slight decline in price, but the effect was far more mild owing to the business’ much smaller exposure to online gaming.

US ponders increased restrictions

Many states already have such bans in place through regulations, including Pennsylvania, Massachusetts, New York, Colorado, Oregon and Arizona. Illinois, Connecticut and Iowa also ban such bets for in-state teams.

More recent bans have been imposed in Vermont, Ohio and Maryland after NCAA lobbying.

Kansas, Michigan, Wyoming and Louisiana meanwhile continue to allow proposition bets on college sports.

Some industry voices argued the imposition of the prop ban could end up being counterproductive.

“While it is unclear how this advances our shared goal of reducing athlete harassment, we do know that driving customers to illegal channels will ultimately hinder the ability to monitor for and detect potential suspicious betting behaviour,” said American Gaming Association (AGA) SVP for government relations Chris Cylke in a statement provided to Associated Press.

The news is part of an ongoing backlash to the nationwide rollout of online sports betting since 2018.

It comes as federal lawmakers continue to probe operator VIP programmes, according to the Wall Street Journal.

Rep. Paul Tonko has tabled several bills seeking to restrict sports betting, including the tabling of a wide-reaching advertising ban in February 2023.

Photo credit: NCAA

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