- Democratic lawmakers introduced the DEATH BETS Act to prohibit regulated exchanges from offering contracts linked to war, terrorism, or death.
- The proposed legislation sought to remove the CFTC’s discretionary power by writing specific bans on sensitive event contracts directly into federal law.
- Republican control of the Senate limited the immediate prospects of the bills, which also aimed to address potential insider trading and market manipulation.
Democratic lawmakers have introduced new legislation to curb prediction markets, targeting contracts tied to war, terrorism, assassination and death as federal regulators move toward a more permissive approach.
Sen. Adam Schiff of California on Wednesday unveiled the DEATH BETS Act, a bill that would ban CFTC-regulated exchanges from listing contracts linked to those subjects.
The measure would remove the Commodity Futures Trading Commission’s (CFTC) discretion in such cases and write the prohibition directly into law. It would also cover contracts that could be interpreted as closely tracking an individual’s death.
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Schiff said markets built around war and death could create incentives for abuse, including the use of insider or classified information. His office said Rep. Mike Levin will introduce companion legislation in the House.
As Crypto News Australia reported this week, conflict-related betting skyrocketed on prediction markets like Polymarket and Kalshi. Over US$2.4 billion (AU$3 billion) in total wagers across Polymarket alone.
Challenging the CFTC
The proposal directly challenges CFTC Chair Mike Selig, who has been pushing a lighter-touch framework for event contracts. In February, the agency withdrew a 2024 proposal that would have broadly barred political prediction markets, with Selig criticising that earlier plan as regulatory overreach.
A separate bill introduced the same day by Sen. Richard Blumenthal of Connecticut also seeks tighter controls on the sector. His Prediction Markets Security and Integrity Act would target fraud, insider trading and market manipulation, while restoring some oversight powers to U.S. states.
Blumenthal’s measure also calls for bans on contracts tied to war, death and military action. He said the bill is intended to impose basic safeguards on what he described as an increasingly unchecked market.
The immediate chances of either bill advancing appear limited. Republicans control the Senate and are expected to keep that majority through at least the end of the year, leaving the Democratic proposals more likely to shape the debate than quickly become law.
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