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Recent suspicious activity on prediction markets has raised serious questions about whether certain government insiders are using government secrets to make significant personal profit by placing anonymous bets on online gambling platforms. And now four Democratic congresspersons have introduced legislation addressing this matter.
The concerns stem from the hours leading up to the joint U.S.-Israeli attack on Iran, when bets on a potential strike were being bought and sold on prediction markets like Polymarket. One trader named "Magamyman" bet big and won $553,000.
Lawmakers on Capitol Hill took notice. Sen. Chris Murphy, D-Conn., posted on X "it's insane this is legal" and accused members of President Trump's orbit of "profiting off war and death," though Murphy did not cite any evidence to support his claims and the White House denied any knowledge of these trades.
Murphy, along with Congressman Greg Casar (D-TX-35) and Congresswoman Yassamin Ansari (D-AZ-03) unveiled the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act on Wednesday.
The bicameral legislation would ban wagering on government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome.
Many of these “event contracts”, they claim, are traded on offshore prediction markets, though Gambling911.com has yet to see evidence that offshore gambling sites are offering such options. To date, only Kalshi and Polymarket appear to have offered these markets. Both say they are monitoring suspicious trading closely. Both are based in the United States and licensed by the Commodity Futures Trading Commission (CFTC).
After the controversy, CEO Tarek Mansour emphasized Kalshi’s “death carveout” policy, stating the platform does not allow users to profit directly from death, war, or violent outcomes.)
The bill also amends existing laws against illegal gambling to enforce these rules by shutting down payment systems used by illegal online platforms and imposing criminal penalties for people in the U.S. who promote, manage, own, or supervise these businesses domestically. The bill is co-sponsored by U.S. Senator John Hickenlooper (D-CO) and Congresswoman Rashida Tlaib (D-MI-12). It wasn't immediately clear if the legislation has any Republican support.
“The people entrusted with our nation’s most sensitive secrets and our service members’ lives should not be able to gamble on outcomes they influence,” said Congressman Gabe Amo (D-RI-01). “It’s a blatant conflict of interest and the height of unethical behavior. I’m proud to introduce the BETS OFF Act to stop betting markets from facilitating powerful politicians and their pawns from putting their personal enrichment over the public’s trust.”
“There’s no getting around the fact that any prediction market where somebody knows or controls the outcome of a bet is ripe for corruption,” said Senator Chris Murphy (D-CT). “Even worse, prediction markets are also an avenue by which government decisions get influenced by who's making money off them, and that should be unforgivable to the American public. When events that involve good and evil, life and death become just another financial product, morality no longer matters and the soul of America is fundamentally corrupted. This bill will stop the transformation of our society into a rigged video game casino by banning the prediction markets that allow the powerful insiders to get rich by commodifying every part of our lives.”
“America is facing a crisis of corruption, and this bill is about cracking down on one of the most dangerous new forms of corruption infecting our government,” said Congressman Greg Casar (D-TX-35). “Too often, prediction markets are becoming yet another place for rich and powerful people to cash in on insider information. This bill will put a stop to that."
"It’s common sense: people shouldn’t be allowed to bet on war or other government actions. Period," said Senator John Hickenlooper (D-CO).
“Prediction markets sell themselves as a place where everyone has an equal shot at winning big. The reality is they’re rigged against ordinary people and ripe for abuse – especially when betting on government actions,” said Congresswoman Yassamin Ansari (D-AZ-03). “When the President and national security officials are making life and death decisions, the last thing they should be considering is whether they can personally profit. This bill puts an end to that corruption and disturbing national security risk.”
"No one should be able to gamble on death and destruction, especially people connected to Trump with insider knowledge,” said Congresswoman Rashida Tlaib (D-MI-12). “It's sickening that people just made millions of dollars by betting on the U.S. attacks on Iran and Venezuela. Congress must ban profiting from war and war crimes."
The bill is endorsed by VoteVets, American Economic Liberties Project, Win Without War, Americans for Financial Reform, Public Citizen, Groundwork Collaborative, and Center for International Policy Advocacy.
- T.C. Jackson, Gambling911.com
