US Senator Adam Schiff introduced legislation on Tuesday that would prohibit federally regulated prediction market platforms from listing contracts linked to war, terrorism, assassination or individual deaths.
The proposal, known as the DEATH BETS Act, would amend the Commodity Exchange Act to explicitly ban these event contracts for entities overseen by the Commodity Futures Trading Commission.
“Betting on war and death creates an environment in which insiders can profit off of classified information, our national security is jeopardised, and violence is encouraged,”
Said Senator Adam Schiff.
Schiff said prediction markets had become a regulatory “Wild West” and argued that Congress must clarify that trading contracts tied to death or violent conflict are prohibited.
The bill arrives as prediction platforms face growing scrutiny after traders reportedly placed large bets on geopolitical events, including potential US military action against Iran.
Blockchain data and reports indicated that a group of traders earned about $1 million correctly predicting the timing of a US strike on Iran, with several bets placed only hours before explosions were first reported in Tehran.
Authorities have also investigated suspected insider trading on prediction markets, including cases where traders allegedly used non-public information related to military actions or political developments to place highly profitable bets.