BETS OFF Act Would Ban Prediction Market Wagers on Government Actions and War
Senators and House members introduced the BETS OFF Act to ban prediction market wagers on military strikes and government decisions
A bipartisan group of lawmakers has introduced federal legislation targeting prediction markets. Senator Chris Murphy (D-Conn.) and Rep. Greg Casar (D-Texas) unveiled the Banning Event Trading on Sensitive Operations and Federal Functions Act on Tuesday. It is co-sponsored by Senator John Hickenlooper (D-Colo.) and Representatives Yassamin Ansari (D-Ariz.), Gabe Amo (D-R.I.), and Rashida Tlaib (D-Mich.).
The bill would prohibit prediction markets from offering wagers on government decisions, military actions, terrorism, and assassinations. It would also ban markets where a single individual controls or knows the outcome in advance.
Kalshi made headlines when a potential class-action lawsuit was filed following the contentious settlement of the Iranian Supreme Leader prediction market. This led Kalshi to create a “death rule” following the controversy.
What the Bill Would Do
The BETS OFF Act targets platforms like Kalshi and Polymarket. It would block wagering on a defined category of sensitive events. That includes U.S. military operations, government policy decisions, acts of terrorism, and assassination markets.
The bill would also cover private-sector events where advance knowledge is concentrated in a small number of people. Murphy cited examples. Bets on what words a politician will use in a speech. Bets on who will perform at a Super Bowl halftime show. These markets, Murphy argued, are inherently vulnerable to exploitation by insiders.
The legislation would amend existing illegal gambling laws to block payment processing for banned platforms. It would impose criminal penalties on U.S. individuals who operate or promote them.
The Iran Strikes as Exhibit A
Murphy and Casar pointed to unusual betting activity on Polymarket ahead of U.S. military strikes on Iran. According to Casar, approximately 150 accounts placed highly unusual bets the day before the strikes that U.S. military action would occur the following day.
Of those, 109 accounts each made over $10,000. Sixteen made over $100,000. One individual made nearly half a million dollars.
Murphy noted that most of those accounts were created on the same day the bets were placed. He argued the pattern suggested individuals with advance knowledge of the operation had profited from the market. Lawmakers cited similar activity ahead of a U.S. operation in Venezuela.
“While working-class kids were getting sent to fight and die in the Middle East, others were cashing in,” Casar said.
The Corruption Incentive Problem
Murphy went beyond the insider trading concern. He argued that active prediction markets on government decisions create dangerous incentives for officials to shape policy around their financial interests.
He suggested that advisers with open positions on whether the U.S. would take military action overseas might give advice driven by what would make them money rather than what is best for national security.
The bill also takes aim at the Trump family’s ties to the industry. Donald Trump Jr. is an investor in Polymarket and a paid adviser to Kalshi. He is also developing a Trump-branded prediction market called Truth Predict. Casar said the administration has no incentive to crack down on prediction markets because it is financially benefiting from them.
Murphy drew a broader conclusion. He said the president’s pattern of using his office for personal financial gain sends a signal to White House staff that they should do the same.
Bipartisan Support Is Uncertain
Murphy and Casar acknowledged the political difficulty of passing the bill. Casar said the topic is hard for Republicans because their leadership is financially invested in the platforms. However, he said private conversations with Republican colleagues showed awareness of the risks these markets pose.
Public polling may help. A Data for Progress survey found 59% of voters oppose wagering on potential government actions. That figure holds across party lines: 60% of Democrats, 61% of Independents, and 57% of Republicans.
Support for banning elected officials from prediction markets entirely is even higher, at 67%. Concern is highest around terrorism and assassination markets, with 82% and 78% of voters respectively saying those markets alarm them.
The BETS OFF Act is one of several prediction market bills currently circulating in Congress. Others target sports betting contracts and election markets. Murphy described his bill as addressing what he considers the most urgent risk: corruption in government decision-making.
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