Two U.S. lawmakers introduced legislation Tuesday to ban prediction market contracts tied to war, assassination, or fatalities. The proposal could sharply restrict event-based trading platforms as regulators reassess how prediction markets fit within financial law.
Representative Mike Levin and Senator Adam Schiff unveiled the “Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act,” known as the Death Bets Act. The bill would prohibit trading contracts linked to violent events and remove the discretion currently held by the Commodity Futures Trading Commission under the Commodity Exchange Act to evaluate such markets case by case.
Should Prediction Markets Be Allowed To Price Violent Events?
Prediction markets have expanded rapidly across crypto and traditional platforms, offering contracts tied to political outcomes, economic indicators, and geopolitical developments. Yet contracts referencing life-and-death scenarios have triggered backlash. Last week, the decentralized platform Polymarket removed a market that allowed users to bet on the probability of a nuclear weapon detonation after criticism spread on social media.
The controversy arrives as the CFTC prepares new guidance on event-based contracts. Chairman Michael Selig said the agency is working on an advanced rulemaking process to clarify how prediction markets should operate within U.S. financial regulation. Could explicit bans reshape how decentralized prediction platforms structure their contracts?
“Betting on war and death should be illegal,” Levin said in a statement announcing the bill. Schiff warned that such markets risk encouraging the misuse of sensitive information. “Betting on war and death creates an environment in which insiders can profit off of classified information, our national security is jeopardized, and violence is encouraged,” he said.
Concerns intensified after analytics firm Bubblemaps flagged several wallets that collectively earned about $1 million by betting that the United States would launch strikes against Iran shortly before the attacks occurred. At the same time, courts and state regulators continue testing the legal boundaries of event trading platforms. The next catalyst will likely emerge as federal rulemaking and congressional legislation converge on defining the legal status of prediction markets.
