- Lawmakers Mike Levin and Adam Schiff introduced the DEATH BETS Act on Tuesday, explicitly banning prediction contracts on war, death, and assassination.
- The bill counters CFTC Chairman Michael Selig’s announced plans to expand regulatory guidance for prediction markets.
- Prediction markets like Polymarket have drawn criticism for Hosting controversial contracts on geopolitical events and deaths.
Democratic lawmakers introduced bicameral legislation on Tuesday to permanently outlaw prediction market contracts tied to death and war, even as the CFTC chairman outlined plans to grow the sector. Rep. Mike Levin and Sen. Adam Schiff unveiled the DEATH BETS Act, aiming to amend the Commodity Exchange Act. Consequently, the bill would codify a ban on contracts involving terrorism, assassination, war, or an individual’s death.
However, this legislative push directly contrasts with recent regulatory signals. CFTC Chairman Michael Selig announced he would draft new guidance and solicit public input for event contracts. Selig stated prediction markets are “now viewed by the public as more accurate than political polls.”
Meanwhile, prediction markets have faced intense scrutiny over specific contracts. Levin noted over half a billion dollars was wagered on the timing of U.S. military strikes on Iran alone. Schiff previously led a Senate letter urging the CFTC to enforce prohibitions on such markets.
The senators argued these contracts create dangerous national security risks. They cited markets on Venezuela’s Nicolás Maduro’s removal, which netted one trader more than $400,000. Recently, Polymarket pulled a nuclear detonation market that had attracted over $838,000 in volume.
Additionally, prediction market Kalshi is facing a class action lawsuit over a market on Iran’s Ayatollah Ali Khamenei. Plaintiffs allege the platform applied a “death carveout” clause to shortchange winning bets after his death. The DEATH BETS Act seeks to remove the CFTC‘s discretion and establish a permanent statutory ban.
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