TLDR
- Senator Adam Schiff introduced the DEATH BETS Act to ban prediction market contracts tied to war, terrorism, assassination, and death
- The bill would remove the CFTC’s discretion and write permanent prohibitions into federal law
- Representative Mike Levin noted over $500 million was wagered on the timing of U.S. military strikes on Iran
- Senator Richard Blumenthal introduced a separate bill targeting fraud and insider trading in prediction markets
- Blumenthal’s bill would also return some oversight power to individual states
Democrats in Congress are taking aim at prediction markets with two new bills that would ban contracts tied to war, death, and military action.
Senator Adam Schiff of California introduced the DEATH BETS Act on March 11. The bill would make it illegal for any CFTC-registered exchange to list contracts involving terrorism, war, assassination, or an individual’s death.
The legislation would amend the Commodity Exchange Act directly. This means the ban would be written into law rather than left to the judgment of regulators.
Right now, the Commodity Futures Trading Commission has the power to decide whether certain contracts are “contrary to the public interest.” But that decision changes depending on who is running the agency.
CFTC Chair Mike Selig, who took over in December, has shown support for prediction markets. Schiff’s bill would take that flexibility away from Selig and any future chair.
Representative Mike Levin of California introduced a companion version of the bill in the House. That makes the proposal bicameral.
Levin pointed to the scale of the problem in a statement. He said more than 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.
Schiff Says National Security Is at Risk
Schiff argued that allowing bets on war and death creates a path for insiders to profit from classified information. He said it puts national security at risk and could encourage violence.
“There is no justification for gambling on lives, or public benefit to be derived by such a market,” Schiff said in a statement.
The bill sets a broad enforcement standard. It would bar contracts that involve or even closely correlate to a person’s death.
That wide scope is designed to prevent exchanges from finding creative workarounds to list similar products under different names.
Blumenthal Targets Fraud and Insider Trading
On the same day, Senator Richard Blumenthal of Connecticut introduced his own bill. The Prediction Markets Security and Integrity Act focuses on fraud, insider trading, and market manipulation.
Blumenthal described the prediction market industry as “out of control.” He said his bill would put “basic guardrails and safeguards” in place.
His proposal also mirrors Schiff’s approach by banning contracts tied to war, death, and military action.
One key difference is that Blumenthal’s bill would return some oversight power to individual states. That runs counter to CFTC Chair Selig’s recent push to claim full federal authority over the prediction market space.
The two bills represent a growing effort among Democrats to rein in an industry that has expanded quickly. Prediction markets gained mainstream attention during the 2024 election cycle and have continued to grow since.
Blumenthal said his legislation “bans dangerous and unethical bets and protects consumers from fraud and other predatory practices.”
Both bills were introduced on March 11 and will need to move through committee before reaching a full vote in either chamber.
