Democrats Introduce BETS OFF Act to Ban War Bets on Polymarket and Kalshi

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TLDR

  • Democratic lawmakers Greg Casar and Chris Murphy have put forward the BETS OFF Act, which aims to prohibit bets related to war, assassination, and terrorism on prediction markets
  • This legislation was prompted by “highly unusual bets” placed on Polymarket regarding a possible U.S.-Israel military strike against Iran
  • Senator Murphy indicated that individuals with inside government information might have made those bets
  • A Times of Israel journalist received death threats from Polymarket users who sought to manipulate his reporting to secure wins on their bets
  • The bill is not expected to pass in the near future, given that Republicans hold majority control in both the Senate and House and have displayed minimal interest in the measure

(SeaPRwire) –   Two Democratic U.S. legislators have unveiled a bill designed to ban specific categories of bets on prediction market platforms such as Polymarket and Kalshi.

Texas Representative Greg Casar and Connecticut Senator Chris Murphy announced the Banning Event Trading on Sensitive Operations and Federal Functions, or BETS OFF Act, on Tuesday.

The legislation would prohibit trading on events linked to war, terrorism, and assassination. Additionally, it would bar trading on any non-financial government events where an individual has advance knowledge of the outcome or control over it.

This initiative comes in the wake of multiple “highly unusual bets” on Polymarket that forecasted a U.S.-Israel military attack on Iran.

On March 4, Senator Murphy stated that it was probable that individuals with “inside information” regarding President Trump’s plans had placed those bets.

“We shouldn’t live in a country where someone sitting in the situation room… could have hundreds of thousands of dollars riding on the decision,” said Casar.

Death Threats Stemming from a News Report

The controversy escalated when a military correspondent at The Times of Israel disclosed receiving death threats. These threats originated from Polymarket users who pressured him to alter his report on an Israeli missile strike in order to secure their bet wins.

Polymarket denounced the conduct and noted that it breached their terms of service.

The BETS OFF Act marks the second bill focusing on prediction markets to be introduced in recent weeks. Last week, California Senator Adam Schiff put forward the DEATH BETS Act, which similarly targets contracts related to war and assassination.

Current Status of the Platforms

Polymarket continues to offer active contracts related to the Iran conflict, such as the probability of a U.S. ground invasion, the timeline for a ceasefire, and shifts in Iranian leadership. As of Tuesday, the platform indicated a 50% likelihood of a U.S.-Iran ceasefire by May 31.

Kalshi has scaled back its offerings. It no longer provides contracts linked to specific military operations or deaths, following public outcry over a market focused on when Iran’s Supreme Leader Ayatollah Khamenei would step down or pass away. After Khamenei’s death was confirmed, Kalshi invalidated those bets, leading to a class-action lawsuit against the platform by traders challenging the payout decisions.

Senator Murphy also questioned the broader culture surrounding prediction markets, pondering what it signifies “spiritually” when moral issues are turned into financial wagers.

The BETS OFF Act faces significant obstacles in Congress. Republicans hold control over both the Senate and the House, and Murphy admitted that the issue lacks bipartisan backing—partly due to President Trump’s financial connections to prediction market platforms.

Arizona’s attorney general has also filed charges against Kalshi, alleging that the platform operates as an unlicensed gambling service.

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