Catenaa, Thursday, March 12, 2026- Two Democratic lawmakers introduced legislation Tuesday seeking to ban prediction markets that allow traders to wager on events involving deaths, wars or assassinations, arguing such contracts create national security and ethical risks.
Mike Levin and Adam Schiff introduced the proposed “Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act,” commonly referred to as the Death Bets Act.
The bill would prohibit markets that allow betting on violent or tragic events and would remove regulatory discretion currently held by the Commodity Futures Trading Commission.
Under existing law, the Commodity Exchange Act allows the CFTC to block event contracts tied to illegal activity or threats to public interest. The new bill would mandate an outright ban on contracts related to death, military conflict or assassination attempts.
Supporters argue the change is necessary to close gaps in the current regulatory framework.
Lawmakers cited concerns that traders with access to sensitive information could profit from violent events or geopolitical developments before they occur. Critics say prediction markets could create incentives to exploit insider information tied to military operations, political developments or intelligence activities.
The proposal follows growing scrutiny of event-based trading platforms, including Kalshi and Polymarket. Some markets allowed wagers on leadership changes, geopolitical conflict outcomes and other sensitive events. Platforms have argued that prediction markets can improve forecasting by aggregating public information, but critics say certain contracts cross ethical and legal boundaries.
The CFTC recently announced it is reviewing rules governing prediction markets as their popularity expands. CFTC Chairman Michael Selig said the agency is preparing guidance aimed at clarifying how U.S. derivatives law applies to event contracts. The review comes as trading volumes on prediction platforms surged following the 2024 U.S. election cycle.
Several lawmakers have introduced related measures targeting prediction market activity. Jeff Merkley and Amy Klobuchar proposed legislation that would bar elected officials and government employees from trading on event markets tied to political outcomes. Other members of Congress have raised concerns about potential insider trading and market manipulation tied to geopolitical events.
Prediction markets have expanded rapidly in recent years. Platforms typically offer contracts priced between a few cents and one dollar, representing the probability of a specific outcome. Traders can buy or sell contracts tied to elections, economic indicators, weather events or global political developments.
Industry supporters argue the markets can improve forecasting accuracy and help businesses hedge risk tied to uncertain events. Critics counter that markets involving violence, deaths or assassinations raise serious ethical questions and may create incentives for harmful behavior.
Background: Prediction markets date back decades, including academic projects such as the Iowa Electronic Markets, which began in the late 1980s and became known for accurate election forecasts. Modern platforms operate online and sometimes use blockchain technology to settle contracts and record transactions. Trading volumes increased sharply during the 2024 U.S. presidential election, when prediction markets attracted billions of dollars in wagers on political outcomes. As participation grows, regulators and lawmakers are debating how to balance innovation with consumer protection and national security concerns.
