US Lawmakers Introduce Bill to Ban Prediction Markets on Sensitive Events

US lawmakers, including Senator Chris Murphy and Representative Greg Casar, are taking steps to regulate prediction markets by introducing the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act. This legislation seeks to prohibit wagers on sensitive events such as government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome.

The proposed bill comes in response to concerns that betting platforms like Kalshi and Polymarket have allowed users to profit from geopolitical conflicts, including the US and Israel's joint strikes against Iran and the abduction of Venezuelan President Nicolas Maduro. Critics argue that these platforms enable individuals with insider knowledge to influence government decisions and profit from them.

Murphy emphasized that the legislation aims to prevent the monetization of sensitive events, stating, "What happens to us spiritually when every moral question in this country becomes a market?" He added that certain matters should not be influenced by the potential for profit.

The lawmakers cited examples of significant profits made by users on Polymarket, including a $500,000 profit from a bet on Iran's supreme leader being out of power hours before a strike. They suggested that such trades may have been made by individuals with insider knowledge from within the White House or close to the administration.

The BETS OFF Act is part of a broader effort to regulate the prediction market industry. Other proposed legislation includes measures to establish federal consumer protections, ban elected officials from profiting from prediction markets, and impose age verification for users.