Two Democrats introduced legislation today that would ban wagering on prediction markets for government actions in which an individual knows or controls the outcome.
The bill responds to reports that accounts placed unusually large wagers in the hours before several recent US military operations. Lawmakers say the suspicious timing points to government insiders trading on classified information.
Lawmakers Take Aim at Wartime Wagers
Sen. Chris Murphy (D-Conn.) and Rep. Greg Casar (D-Texas) introduced bicameral legislation Tuesday to prohibit wagering on government decisions and national security events.
The bill is known as the BETS OFF Act, short for Banning Event Trading on Sensitive Operations and Federal Functions. It would ban prediction market bets on government actions, terrorism, war, assassination, and outcomes a bettor controls or knows in advance.
The move comes after reports that accounts placed large bets just before a US military operation in Venezuela and subsequent airstrikes on Iran.
Lawmakers say the timing strongly suggests insider trading by individuals with access to classified government information.
“It seems pretty clear what happened. People inside the White House, or very close to the White House, with knowledge of the attack that was imminent, cashed in. That is fundamentally corrupt, and it is frankly stunning to people that it is legal,” Murphy said during the press conference.
Casar went into further detail. He particularly referred to prediction market activity that took place hours before the US and Israel attacked Iran.
Insider Makes $500,000 Betting on Iran Strike
The day before the US strikes on Iran began, a series of specific bets was made. Most of the accounts were created on the same day that the wagers were placed.
According to data presented by Casar, there were 150 accounts that placed what he described as “highly unusual bets” on Polymarket.
Of those accounts, 109 made over $10,000. Meanwhile, 16 made more than $100,000. One person made nearly $500,000.
“Half a million dollars from betting on the start of a war that has cost billions of taxpayer dollars, over a dozen lives of US service members, and countless more civilians. While working-class kids were getting sent to fight and die in the Middle East, others were cashing in,” Casar said during the press conference.
Both congressmen also condemned the Trump administration’s role in the flurry of activity in prediction markets. They accused the president’s family of incentivizing this type of behavior.
“We know that, like with basically every other corruption story in Washington, D.C., that the Trump family is getting a cut,” Casar noted.
He specifically pointed to Donald Trump Jr.’s role as an investor in Polymarket and a paid advisor to Kalshi. He also highlighted Truth Predict, the latest crypto venture backed by the Trump family that will operate as a prediction market.
