Democratic Lawmakers Representative Mike Levin and Senator Adam Schiff have introduced the DEATH BETS Act. This is a bicameral legislation to ban prediction market contracts tied to war, assassination, terrorism, or an individual’s death.
Levin noted that over $500 million was wagered on the timing of US military strikes on Iran, highlighting the scale of trading activity on war-related prediction contracts.
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Why it matters:
- Prediction markets have gained notable traction, with platforms experiencing record activity as traders bet on various outcomes.
- However, amid record growth, concerns about insider trading on prediction markets are also increasing.
- Senator Schiff argued that allowing wagers on conflicts and casualties where insiders can exploit classified intelligence for personal gain puts national security at risk and incentivizes violence.
The details:
- The bill would amend the Commodity Exchange Act (CEA) to codify an outright prohibition.
- Representative Levin previously raised concerns over offshore “death contracts” being offered. This included contracts linked to the removal of Venezuela’s Nicolás Maduro and the capture of Myrnohad.
- CFTC Chair Selig had signaled plans to rewrite prediction market rules before the legislation dropped.
The big picture:
- Prediction markets have drawn scrutiny after platforms listed contracts on the active Middle East conflict.
- US Senator Chris Murphy has also announced that he is developing legislation to “ban corrupt and destabilizing prediction markets, where insiders who know the outcome (especially in government) can rig the game to favor certain bets.
