TLDR
- House Democrats introduced the Banning Games on Deaths and Elections Act to ban contracts tied to elections, war, and death on platforms like Polymarket and Kalshi.
- Sen. Adam Schiff and Rep. Mike Levin separately introduced the DEATH BETS Act, targeting the same contract types under the Commodity Exchange Act.
- Research found insiders profited from these bets — one trader made $553,000 from a contract tied to the assassination of an Iranian leader.
- Around $500 million was reportedly bet on the timing of U.S. military strikes on Iran, drawing major regulatory scrutiny.
- Polymarket handled over $3.6 billion in bets during the 2024 presidential cycle and may face increased pressure from the CFTC and SEC if either bill passes.
U.S. lawmakers are pushing to ban prediction market contracts tied to death, war, and assassinations. Two separate bills introduced this week could reshape how platforms like Polymarket and Kalshi operate in the United States.
House Democrats introduced the Banning Games on Deaths and Elections Act. The bill would prohibit event contracts linked to elections, war, and death on regulated platforms. It would amend the Commodity Exchange Act to label these contracts as “contrary to the public interest.”
That classification is a standard the Commodity Futures Trading Commission already uses to block contract listings. But until now, there has been no clear legal definition backing it up.
That legal gap allowed Kalshi to successfully challenge the CFTC in court last year, winning the right to resume U.S. election betting. The new bill aims to close that loophole.
Separately, Sen. Adam Schiff and Rep. Mike Levin introduced the DEATH BETS Act — short for Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act. It targets any CFTC-registered exchange offering contracts linked to terrorism, assassination, war, or an individual’s death.
Why Lawmakers Are Acting Now
The bills come after mounting concern over insider trading on these platforms. A reported $500 million was wagered on the timing of U.S. military strikes on Iran.
Research showed insiders profited from those bets. One trader reportedly earned $553,000 from a contract tied to the possible assassination of Iranian Supreme Leader Khamenei.
Kalshi and Polymarket handled the Iran contracts differently. Kalshi voided its Supreme Leader contract due to a language technicality. Polymarket settled the bet, resulting in $679 million in conflicting market outcomes and drawing regulatory attention.
Polymarket also faced criticism after listing a prediction market around the possibility of a nuclear strike. The platform archived the market following public backlash.
What Could Happen Next
The DEATH BETS Act has been referred to a Senate committee. No vote has been scheduled, and it remains unclear whether the bill will advance.
The Banning Games on Deaths and Elections Act faces resistance from a crypto-friendly faction in Congress. There is no cross-party support at this stage.
If either bill clears committee, the CFTC could move quickly to delist war and death contracts across registered exchanges.
Bitcoin fell 1.8% overnight during the same period, dropping to around $69,500, as broader crypto market sentiment turned cautious.
Polymarket processed more than $3.6 billion in bets during the 2024 U.S. presidential cycle alone. If the bills progress, both platforms could face increased scrutiny from the CFTC and SEC.
The CFTC has separately been working to expand prediction market use through a partial-payout framework developed with Cboe. That effort now exists alongside the proposed restrictions.
The legislation has been referred to committee, with no timeline confirmed for further action.
