US Democratic Party Senator Adam Schiff introduced legislation Tuesday that would explicitly bar federally regulated prediction-market platforms from listing contracts tied to war, terrorism, assassination and individual deaths.
The bill, called the DEATH BETS Act, would amend the Commodity Exchange Act to make those contracts prohibited for entities overseen by the US Commodity Futures Trading Commission (CFTC).
In a statement announcing the bill, Schiff said markets that let traders profit from violent events create incentives for the misuse of classified information, threaten national security and encourage violence. He said prediction markets had become a “Wild West” and called for Congress and the CFTC to make clear that such “death bets” are not allowed.
The bill seeks to ban prediction market contracts that involve references to “terrorism, assassination, war, or any similar activity,” or that are related to an “individual’s death.” The bill was referred to the Senate Committee on Agriculture, Nutrition, and Forestry for consideration, where Schiff is a member.
US-Israel war with Iran ignites military insider concerns
The legislation comes after renewed scrutiny of event-contract platforms during the recent US and Israeli military confrontation with Iran, when war-related markets drew heavy trading and fresh allegations of insider activity.
Six Polymarket traders netted $1 million by accurately betting on the US strike against Iran.
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The six wallets were all created in February and placed all their bets on the contracts predicting the timing of a potential US attack, with several shares purchased only hours before the first reported explosions in Iran’s capital, Tehran.
On Tuesday, a new wallet spent $32,900 to bet on US forces entering Iran by Saturday, despite the odds continuing to decline, according to blockchain data platform Lookonchain.
Related: Kalshi, Polymarket face trading halt in Nevada after court rulings
In February, Israeli authorities arrested and indicted two people suspected of using secret information about Israel striking Iran for insider trading on Polymarket.
Insider concerns grew in January after a Polymarket account profited $400,000 after it placed a bet on a contract predicting that Venezuelan President Nicholas Maduro would be captured, wagering the funds just hours before US forces captured him.
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