A new U.S. Senate bill, introduced by Senator Adam Schiff (D-CA), seeks to explicitly prohibit prediction market contracts tied to war, terrorism, assassination, and an individual's death. The legislation, titled the Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act (DEATH BETS Act), would amend the Commodity Exchange Act to ban regulated exchanges from listing or clearing such 'event contracts'.
The bill directly challenges the Commodity Futures Trading Commission's (CFTC) current deregulatory agenda under Chair Mike Selig. While the CFTC already possesses authority to block contracts deemed contrary to the public interest, enforcement relies on regulatory discretion. Schiff's bill would eliminate this flexibility, writing explicit prohibitions into law and stripping the agency of its judgment on the matter. "Betting on war and death creates an environment in which insiders can profit off of classified information, our national security is jeopardized, and violence is encouraged," Schiff stated.
The proposed prohibition is notably broad, extending to contracts that could be "construed as correlating closely" to a person's death. This legislative push comes as the CFTC, under Selig's leadership, is rewriting its approach to prediction markets, having recently withdrawn a 2024 proposal that would have broadly banned political prediction markets.
The legislation has significant implications for prediction-market platforms like Polymarket and Kalshi, which have gained traction by allowing users to speculate on real-world outcomes like elections and geopolitical events. Polymarket recently faced backlash and archived a controversial market tied to the possibility of a nuclear strike, highlighting the ethical scrutiny surrounding such contracts. The bill has been referred to a Senate committee, and companion legislation is expected to be introduced in the House by Representative Mike Levin (D-CA). Its future advancement in Congress remains unclear.
