US lawmakers push bill to outlaw betting on war, terrorism, and death

Sen. Adam Schiff (D-Calif.) and Rep. Mike Levin (D-Calif.) introduced the DEATH BETS Act to prohibit prediction market contracts tied to war, terrorism, assassination and an individual’s death. The announcement came a day after CFTC Chairman Michael Selig outlined a plan to update oversight of event contracts at a conference in Boca Raton, Florida.

The Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act would amend the Commodity Exchange Act. The text would bar any CFTC-registered entity from listing contracts that involve, relate to, or reference terrorism, assassination, war, or a person’s death. It would replace the Commission’s case-by-case public-interest test for these categories with a statutory ban.

Addressing the FIA Global Cleared Markets Conference on Monday, Selig directed staff to prepare guidance on how event contracts may be listed and traded and said he will issue an advance notice of proposed rulemaking to gather public input. He declared U.S. the “crypto capital of the world,” argued that prediction markets are “now viewed by the public as more accurate than political polls,” and added that the agency is “no longer going to sit idly while these markets develop within our framework.”

Levin framed the bill as a response to activity around national security and geopolitical conflict. In a statement, he put the figure wagered on the timing of U.S. military strikes on Iran at “over half a billion dollars,” calling it unacceptable. Schiff argued that betting on war and death creates openings for abuse and security risks, warning that “insiders can profit off of nonpublic information, our national security is jeopardized, and violence is encouraged.”

The proposal follows a letter last month led by Schiff and co-signed by Sens. Catherine Cortez Masto (D-Nev.), Richard Blumenthal (D-Conn.), Cory Booker (D-N.J.), Tim Kaine (D-Va.), and Jacky Rosen (D-Nev.). The group urged the CFTC to clearly reiterate that the agency would prohibit any contract that resolves on or closely correlates to an individual’s death, writing that such products “present dangerous national security risks, including creating incentives to incite violence, foment geopolitical conflicts, and disclose classified information.”

Recent markets have drawn scrutiny. Last week, prediction platform Polymarket removed a contract on whether a nuclear weapon would detonate this year after public backlash. The market showed more than $838,000 in trading volume and at one point displayed a 22% probability of a detonation by year-end. The senators’ letter also cited markets on whether NASA’s Artemis II spacecraft would explode, the removal of Venezuela’s Nicolás Maduro from power, where one trader reportedly netted more than $400,000, and a contract tied to the capture of the Ukrainian town of Myrnohrad, where bettors were reported to have earned large returns.

Separately, Kalshi was sued in California over a market on whether Iran’s Ayatollah Ali Khamenei would leave office. Plaintiffs allege the platform applied a “death carveout” clause that limited payouts after his death, reducing returns for winning positions compared to expectations set by the contract’s premise.

Under current law, the CFTC can weigh whether specific event contracts are contrary to the public interest. The DEATH BETS Act would impose a categorical prohibition on contracts tied to terrorism, assassination, war and death across all CFTC-regulated entities. Selig has directed staff to work on guidance and plans to seek public comment through an advance notice of proposed rulemaking.