U.S. lawmakers have proposed a new bill aimed at prohibiting wagers on government decisions and military operations, citing concerns about insider trading and questionable market activities linked to recent military strikes.
Senator Chris Murphy (D-Conn.) and Representative Greg Casar (D-Texas) have introduced this bicameral legislation, which seeks to prevent prediction markets from allowing bets on government actions, military endeavors, or events controlled by a single individual who knows the outcome.
This initiative, known as the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act, 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.).
Murphy emphasized during a press conference that these markets are “fundamentally corrupt” and filled with insider trading. The proposed legislation would also amend existing illegal gambling laws to prevent payment processing for banned prediction market platforms and impose criminal penalties on U.S. citizens who promote or manage such platforms.
Advocates for prediction markets argue that their platforms serve as forecasting tools rather than gambling entities, operating under the oversight of federal derivatives regulations.
Murphy and Casar highlighted unusual betting patterns on Polymarket just hours before U.S. strikes on Iran, illustrating the risks the bill aims to mitigate. Casar reported that approximately 150 accounts placed unusual bets the day prior, predicting U.S. military action would commence the next day, with 109 accounts wagering over $10,000 and one individual making nearly half a million dollars.
“Most of those accounts were created on the same day they placed their bets,” Murphy noted, suggesting that those with prior knowledge of the attack may have exploited the market.
Lawmakers also referenced similar betting activities before a U.S. operation in Venezuela, with Casar stating, “While working-class kids were sent to fight and die in the Middle East, others were profiting.”
Murphy expressed concerns that these markets could create harmful incentives for government officials, leading them to prioritize personal financial interests over national security. “There are likely individuals placing bets on U.S. military actions and advising the President based on profit potential rather than what is best for national security,” he stated.
The proposed bill would also extend to private-sector events where a single person effectively controls or knows the outcome, including bets on political speeches or Super Bowl halftime performers.
Additionally, both lawmakers pointed out financial ties between the Trump family and prediction market companies, noting that Donald Trump Jr. is an investor in Polymarket and a paid advisor to Kalshi, while also developing a Trump-branded prediction market called “Truth Predict.” Casar remarked, “This administration is unlikely to address this form of corruption soon, as they are benefiting from it.”