US Lawmakers Introduce Bill to Ban War and Death Bets

Two Democratic lawmakers have introduced new legislation that would prohibit prediction market contracts tied to violent events such as war, assassination, terrorism, or the death of an individual. The proposal arrives amid rising scrutiny of event-based trading platforms that allow users to speculate on geopolitical crises and political violence.

Mike Levin and Adam Schiff unveiled the Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act, known as the DEATH BETS Act, in Washington, D.C. The bicameral legislation seeks to amend the Commodity Exchange Act to explicitly prohibit certain types of prediction market contracts.

The measure would bar any entity registered with the Commodity Futures Trading Commission from listing contracts that reference terrorism, assassination, war, or the death of an individual.

“Betting on war and death should be illegal. While federal law prohibits prediction market contracts on terrorism, war, and assassination, there are still gaping holes that allow traders to profit off death. The result is a system with nothing standing between a prediction market and a contract that lets someone make money off the outbreak of war or the deaths of American service members. We already saw what that looks like: over half a billion dollars was wagered on the timing of U.S. military strikes on Iran alone. That is unacceptable, and this legislation puts a stop to it,” Levin said.

Lawmakers target regulatory gaps in prediction markets

Under the current framework of the Commodity Exchange Act, the CFTC has the authority to block contracts tied to war, terrorism, or assassination if the agency determines that they run contrary to the public interest. The final decision remains at the discretion of the Commission.

The new bill would remove that discretion. The legislation proposes a direct statutory ban on contracts that reference war, assassination, terrorism, or events that correlate with a person's death.

Supporters of the bill argue that prediction markets have expanded faster than the regulatory framework designed to oversee them. Several lawmakers claim that existing rules allow platforms to operate in gray areas that regulators must address.

Schiff warned that such markets create incentives that could compromise national security.

“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. There is no justification for gambling on lives, or public benefit to be derived by such a market. With regulators turning a blind eye, prediction markets have rapidly become the Wild West. As the CFTC seeks to rewrite the rules of the road, Congress must make clear that these death bets are unequivocally prohibited, and this bill would do just that,” Schiff said.

Prediction markets face growing criticism

The legislative push comes as event-based trading platforms face backlash over controversial markets linked to geopolitical conflicts and catastrophic scenarios.

Last week, the decentralized prediction platform Polymarket removed a market that asked users to bet on whether a nuclear weapon would detonate within a specific time frame. The contract drew widespread criticism on social media after it accumulated more than $838,000 in trading volume before it was removed.

Another platform, Kalshi, has faced legal challenges tied to similar markets. One contract on the platform asked traders to speculate on whether Iran’s Supreme Leader, Ali Khamenei, would be “out as Supreme Leader.” The WSJ reported the market generated approximately $54 million in trading volume before the contract was paused.

Rep. Levin previously raised concerns about offshore exchanges that offered markets tied to political instability and armed conflict. Examples included contracts speculating on whether Nicolás Maduro would be removed from power or whether Russian forces would capture the Ukrainian town of Myrnohrad.

New regulations under discussion

The legislative effort unfolds as the CFTC prepares to clarify how prediction markets should operate in the United States. CFTC Chair Michael Selig said earlier this week that the agency will begin an advanced rulemaking process and publish guidance on how event contracts may be listed and traded.

Selig said prediction markets now occupy a more prominent role in financial and digital asset ecosystems. He also suggested that public interest in such platforms has increased as traders turn to markets that forecast real-world events.

At the same time, lawmakers have raised concerns about potential insider trading tied to geopolitical events. Data from blockchain analytics firm Bubblemaps flagged several newly created wallets that collectively earned roughly $1.2 million after betting that the United States would launch military strikes against Iran shortly before the attacks occurred.

The DEATH BETS Act forms part of a broader congressional debate over prediction markets. Earlier this month, Senators Jeff Merkley and Amy Klobuchar introduced separate legislation titled the End Prediction Market Corruption Act. That bill would prohibit the president, vice president, members of Congress, and other senior public officials from trading event contracts.

Courts have also begun to weigh in. In a recent case involving Kalshi and state regulators in Ohio, a judge rejected the company’s request for a preliminary injunction that sought to prevent state authorities from enforcing local gambling laws on the platform. The court said there was no historical evidence that Congress intended the Commodity Exchange Act to override state gambling regulations.

As Congress considers new legislation and regulators prepare rule updates, the debate over prediction markets now sits at the intersection of financial innovation, national security, and ethical concerns.

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