A bill has been introduced in the U.S. Congress to explicitly ban prediction market contracts related to death and war. Rep. Mike Levin (D-CA) and Sen. Adam Schiff (D-CA) introduced the DEATH BETS Act (: Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act).
This bicameral legislation amends the Commodity Exchange Act to prohibit any entity registered with the Commodity Futures Trading Commission (CFTC) from listing or offering contracts that involve, relate to, or reference: Terrorism Assassination and War.
An individual’s death including those that may closely correlate with death. The bill aims to codify and strengthen existing restrictions. While current law from the 2010 Dodd-Frank Act already gives the CFTC discretion to prohibit contracts on topics like terrorism, assassination, or war if deemed contrary to the public interest, the DEATH BETS Act removes that discretion for these categories and explicitly bans them outright.
It also extends the prohibition to contracts tied to death more broadly. Lawmakers cited ethical concerns; profiting from tragedies, national security risks potential incentives for harm or leaks of sensitive information, and the need to close loopholes amid the growing popularity of platforms like Kalshi and Polymarket, which allow event-based trading.
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This move comes as the CFTC has been shifting toward more permissive regulation of event contracts in other areas, creating tension with some Democrats pushing for stricter limits. Related developments include: Other bills and letters from Democrats; e.g., Sen. Richard Blumenthal’s Prediction Markets Security and Integrity Act, focused on fraud, insider trading, and restricting manipulative listings like those on war/death.
A bipartisan House bill Event Contract Enforcement Act by Reps. Blake Moore and Salud Carbajal that would require the CFTC to prohibit contracts on similar “TAWGA” topics (terrorism, assassination, war, gaming, illegal activity). The DEATH BETS Act is very recent introduced so it remains in the early stages with no immediate passage prospects, especially in a potentially divided Congress.
Prediction markets have faced scrutiny over geopolitical events, including bets tied to military actions or assassinations. Kalshi (CFTC-registered US platform) faces direct and significant restrictions if the bill passes.
The DEATH BETS Act explicitly bans CFTC-registered entities like Kalshi from offering any contracts involving, relating to, or closely correlating with terrorism, assassination, war, or an individual’s death.
This directly closes the loopholes Kalshi has used, such as its high-profile “Ali Khamenei out as Supreme Leader” market which traded ~$54–55 million before being paused. Kalshi already prohibits “direct” death bets and relies on “death carveouts”; resolving at the last traded price before death or refunding losses/fees, costing the company ~$2.2 million in the Khamenei case.
The bill removes CFTC discretion and codifies an outright prohibition, forcing Kalshi to delist or redesign any conflict-related or leader-ouster markets that could correlate with death or war. Kalshi is already introducing standardized carveout rules and faces a separate class-action lawsuit over the Khamenei resolution.
Geopolitical volume (hundreds of millions on Iran strikes across platforms) has been a growth driver. Loss of a key revenue stream tied to explosive geopolitical interest. Analysts note this threatens the ~$20 billion valuation targets both platforms are pursuing, as Kalshi’s open interest exceeds $400 million and weekly volumes hover around $1.9 billion industry-wide, with much of the surge from war/death-adjacent betting.
Kalshi would likely pivot harder to non-controversial categories (elections, economics, weather) to maintain compliance and its “regulated” image, but could see reduced trader engagement in high-stakes global events.
Polymarket sees minimal direct legal impact. The bill does not apply to Polymarket, which operates on blockchain often via international venues and is not a CFTC-registered exchange. It continues listing sensitive contracts, including ouster/assassination-style markets and even live US-Iran ceasefire odds post-bill introduction.
It handled over $529 million in Iran-related volume including a trader reportedly earning $553,000 on Khamenei’s death and previously hosted (then removed after backlash) a nuclear detonation market. Heightened scrutiny, reputational pressure, and possible voluntary self-censorship (as with the nuclear market).
Articles frame the bill as “coming for Polymarket’s ‘death markets’” or creating broader regulatory challenges, which could deter US users, complicate partnerships, or invite future legislation targeting crypto platforms. Insider-trading concerns amplify calls for oversight.
If Kalshi is forced to restrict such markets, traders may migrate to Polymarket (its open interest >$360 million, with billions in election-driven volume historically). No immediate operational changes. The bill is in very early stages with low near-term passage odds in a divided Congress, especially amid CFTC’s push for looser event-contract rules.
It stems directly from the Iran/Khamenei controversy and aims to curb perceived national-security risks (insider trading on classified info) and ethical issues. Valuations for both ~$20B targets are explicitly tied to geopolitical betting growth, so sustained regulatory pressure could cool investor enthusiasm even without passage.
Kalshi must fundamentally adapt its offerings. Polymarket can largely continue but operates under a growing ethical/regulatory cloud. The sector’s rapid growth now faces a clear tension between innovation and restrictions on “death and war” contracts.