Multiple Democratic lawmakers criticized the lack of regulation on online betting platforms after reports that people — who they alleged may have had advance knowledge — made millions by predicting the U.S.-Israel strikes on Iran.
Their calls for more limits on prediction markets came after multiple Polymarket wallets racked up hundreds of thousands of dollars by betting that the U.S. would strike Iran on Saturday, just minutes before U.S. and Israeli forces launched the first attacks across the country on Saturday morning. Users on Polymarket and Kalshi also placed large bets over the weekend on other Iran-related questions, including whether U.S. and Israeli forces would kill Iranian Supreme Leader Ayatollah Ali Khamenei.
At least six of the people who placed bets on the strike on Polymarket are “suspected insiders,” according to blockchain analytics company Bubblemaps.
“It’s insane this is legal. People around Trump are profiting off war and death,” Sen. Chris Murphy, who sits on the Senate Foreign Relations Committee, said in a post on X on Saturday. “I’m introducing legislation ASAP to ban this.”
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Murphy’s office did not immediately respond to questions from NOTUS about what the legislation would entail.
Some users made upward of half a million dollars by betting that the U.S. would strike Iran on Feb. 28.
“Prediction markets cannot be a vehicle for profiting off advance knowledge of military action,” California Rep. Mike Levin said in a post on X. “Reminder that Donald Trump Jr. sits on Polymarket’s advisory board and his firm invested double-digit millions into the platform last year. The DOJ and CFTC both had active investigations into Polymarket that were dropped after Trump took office.”
Their outcry comes just days after a group of Democratic senators asked Mike Selig, the chair of the Commodity Futures Trading Commission — the federal body that regulates prediction market platforms — to crack down on predictions around wars, assassinations and terrorism, which are all categories prohibited in prediction market contracts under federal law.
“These contracts further risk incentivizing real-world harm by creating financial rewards linked to destabilizing events or physical injury, and by encouraging actors to influence or precipitate those outcomes for personal profit,” six senators said in a letter.
Selig has sought to exert federal jurisdiction over these markets, rather than allowing them to be regulated at the state level alongside other types of gambling. A subsequent lack of oversight has come under fire over the past few months, with an influx of federal lawsuits against betting platforms.
In a note on its website about predictions over military activity in the region, Polymarket said that “the promise of prediction markets is to harness the wisdom of the crowd to create accurate, unbiased forecasts for the most important events to society. That ability is particularly invaluable in gut-wrenching times like today.”
“After discussing with those directly affected by the attacks, who had dozens of questions, we realized that prediction markets could give them the answers they needed in ways TV news and 𝕏 could not,” the note said.
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