Key Points
- Senate Democrats unveiled the Death Bets Act targeting prediction markets involving war, terrorism, assassination, and fatalities.
- The proposed legislation would modify the Commodity Exchange Act to eliminate CFTC approval authority for such contracts.
- Rep. Mike Levin presented parallel legislation in the House while Rep. Jamie Raskin moved forward with related measures.
- Political leaders expressed concerns about insider trading opportunities created by contracts involving military operations and political violence.
- The CFTC discontinued a previous proposal aimed at prohibiting political event contracts under existing regulatory authority.
Senate Democrats have advanced legislation designed to curtail event-based trading platforms offering contracts related to violence and mortality. Sen. Adam Schiff presented the DEATH BETS Act, which would prevent trading venues from offering contracts based on war, terrorism, assassination, or deaths. Political leaders positioned this initiative as a reaction to evolving regulatory standards at the Commodity Futures Trading Commission.
Congressional Effort to Restrict Prediction Market Offerings
Schiff brought forward the DEATH BETS Act to modify the Commodity Exchange Act while eliminating CFTC oversight flexibility. The legislation would establish clear prohibitions against contracts involving terrorism, armed conflict, assassination, or mortality of individuals. Schiff emphasized, “There is no justification for gambling on lives, or public benefit to be derived by such a market.”
The senator continued, “Betting on war and death creates an environment in which insiders can profit off classified information.” Rep. Mike Levin announced parallel measures in the House to align with Senate efforts. Rep. Jamie Raskin separately brought forward the Banning Games on Deaths and Elections Act through House channels.
Raskin emphasized that election-based gambling contracts undermine democratic processes and erode public confidence. His proposal would classify these contracts as harmful to public welfare under federal statutes. Congressional leaders indicated these changes would establish unambiguous legal grounds for preventing such listings.
The CFTC maintains existing power to reject certain contracts when they violate public interest requirements. Enforcement varies based on agency leadership decisions and regulatory interpretation. Schiff’s proposal would eliminate that discretionary authority by establishing definitive legal prohibitions.
Regulatory Changes and Industry Developments
This legislative push comes amid evolving CFTC policies regarding prediction market oversight. During February, the commission retracted a 2024 proposal that would have implemented sweeping restrictions on political event contracts. CFTC Chair Mike Selig rejected the earlier framework, characterizing it as excessive regulatory intervention.
Congressional leaders pointed to recent trading volumes connected to international conflicts. Data revealed traders committed nearly $500 million to contracts speculating on potential U.S. military operations against Iran. A single participant reportedly secured $553,000 through a contract involving Iran’s Supreme Leader’s assassination.
Kalshi and Polymarket managed Iran-focused contracts through different approaches, attracting regulatory scrutiny. Kalshi canceled its Supreme Leader contract due to terminology concerns, whereas Polymarket finalized its market. These divergent approaches generated $679 million in contradictory market outcomes.
Kalshi secured a favorable court ruling enabling U.S. election betting operations to continue. The Banning Games on Deaths and Elections Act attempts to overturn that judicial decision through congressional action. Polymarket processed more than $3.6 billion in wagering activity throughout the 2024 presidential election period.
Bitcoin declined 1.8% overnight, falling beneath $70,000 amid broader market volatility. The digital currency subsequently traded around $69,500 during early trading hours. Congressional sponsors indicated both legislative measures seek to establish definitive federal guidelines for event-based contract regulation.
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