US lawmakers are moving to impose stricter limits on prediction markets by introducing legislation that would explicitly prohibit trading contracts linked to war, assassination, or an individual’s death.
Representative Mike Levin of California and Senator Adam Schiff unveiled the Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act, known as the DEATH BETS Act, on Tuesday.
The bicameral proposal would amend the Commodity Exchange Act to prevent any entity registered with the Commodity Futures Trading Commission from listing event contracts that reference terrorism, war, assassination, or a person’s death.
Lawmakers argue the measure is needed to close gaps in the current framework, which allows the CFTC to block such contracts only if it determines they run counter to the public interest.
The proposed legislation would remove that discretion and establish a direct statutory ban.
Levin pointed to the scale of recent activity tied to geopolitical events as evidence that existing oversight is insufficient.
“Over half a billion dollars was wagered on the timing of US military strikes on Iran alone,” he said in a statement, calling the practice unacceptable and saying the bill would halt such markets.
Growing political pressure on prediction markets
The legislation arrives as prediction market platforms face increasing scrutiny over contracts tied to political violence, international conflicts, and the fate of world leaders.
Earlier this year, Schiff led a group of Democratic senators in a letter urging CFTC Chairman Michael Selig to reaffirm that markets resolving on or closely correlated with a person’s death should not be permitted.
The senators warned that such contracts could pose national security concerns by creating incentives to provoke violence or exploit classified information.
The letter cited a range of controversial markets that had appeared on prediction platforms, including bets on whether the Artemis II spacecraft might explode, whether Venezuela’s Nicolás Maduro would be removed from power, and contracts linked to Russia capturing the Ukrainian town of Myrnohad.
In one instance referenced by lawmakers, a trader reportedly earned more than $400,000 betting on Maduro’s removal.
Offshore platform Polymarket has also faced backlash over markets tied to conflict scenarios.
The company recently removed a long-running contract that allowed users to bet on whether a nuclear weapon would be detonated within a given timeframe.
CFTC to focus on prediction market rulemaking
Meanwhile, the CFTC is also preparing to revisit how such contracts are supervised.
Speaking at the FIA Global Cleared Markets Conference in Boca Raton, Florida, Chairman Michael Selig said he had directed agency staff to draft guidance on how event contracts can be listed and traded.
The commission plans to launch an advanced notice of proposed rulemaking to gather public input as it considers updating the regulatory framework governing prediction markets.
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