U.S. Democratic lawmakers are drafting legislation to regulate prediction markets after suspicious bets were placed on the timing of U.S. strikes on Iran.
Senator Chris Murphy said the wagers appeared unusually precise, claiming that individuals close to former President Donald Trump may have used inside information to bet that the United States would strike Iran the following day.
“Obviously, there are people close to Donald Trump who, on Friday, knew what was happening on Saturday, and it is very likely — probable even — that the people that placed those bets were people with inside information,”
Murphy said.
Blockchain analytics firm Bubblemaps reported that six newly created accounts earned roughly $1.2 million on prediction platform Polymarket after betting on the timing of the strikes just hours before explosions were reported in Tehran.
Representative Mike Levin, who is working with Murphy on the bill, said trading on military events should be illegal if participants profit from advance knowledge of government actions.
“It’s unbelievably clear to me that if anyone is using prior knowledge of military action for financial gain, that should be absolutely illegal,”
Levin said.
The controversy has intensified scrutiny of prediction markets such as Polymarket and Kalshi, which allow users to trade contracts based on real-world outcomes like elections, economic data, or geopolitical events.