TLDR
- The BETS OFF Act has been introduced by Senator Chris Murphy and Representative Greg Casar to prohibit prediction market wagering on military operations, government actions, and terrorism-related events
- Approximately 150 Polymarket user accounts made questionable bets immediately before US military action against Iran, with one individual profiting close to $500,000
- Platform operators would face criminal prosecution, and financial institutions would be barred from processing payments for prohibited betting services
- Congressional members raised concerns about Trump family investments in Polymarket and Kalshi, including development of a Trump-affiliated prediction platform
- Survey data reveals 59% of American voters reject betting on government activities, while 82% express alarm over terrorism-focused prediction markets
Congressional lawmakers have unveiled legislation that would criminalize wagering on sensitive government operations, military actions, and related events. The proposal specifically addresses platforms such as Kalshi and Polymarket that facilitate these types of bets.
The proposed legislation bears the name Banning Event Trading on Sensitive Operations and Federal Functions Act, abbreviated as the BETS OFF Act. Senator Chris Murphy from Connecticut and Representative Greg Casar from Texas are leading the effort.
Additional congressional support comes from multiple co-sponsors. The group consists of Senator John Hickenlooper representing Colorado and Representatives Yassamin Ansari, Gabe Amo, and Rashida Tlaib.
During Tuesday’s press conference, Murphy characterized prediction markets as “fundamentally corrupt markets rife with insider trading.” The legislation would modify current gambling statutes to prevent financial institutions from facilitating transactions for prohibited platforms.
Individuals within US jurisdiction who operate or actively promote these betting markets would face criminal prosecution. Companies operating prediction markets have countered these claims, maintaining their platforms function as forecasting instruments subject to federal derivatives regulation.
Suspicious Activity Before Iran Strikes
Lawmakers referenced what they characterized as questionable trading behavior on Polymarket preceding US military operations against Iran. According to Casar, approximately 150 user accounts wagered the day prior to the strikes that military intervention would occur within 24 hours.
Among these accounts, 109 generated profits exceeding $10,000. Sixteen participants earned over $100,000, while a single individual netted approximately half a million dollars.
Murphy noted that the majority of these accounts were established on the identical day the wagers were executed. He contended this pattern indicates individuals possessing privileged information about the military operation may have financially benefited.
Legislators also referenced comparable wagering patterns observed before a US military operation in Venezuela. Casar expressed concern that military service members from working-class backgrounds were deployed to combat zones while others exploited classified information for profit.
Trump Family Ties and Political Pushback
Apart from insider trading allegations, Murphy contended that prediction markets establish problematic financial incentives for government personnel. He suggested individuals counseling the president might base policy recommendations on their personal wagers instead of legitimate national security considerations.
The proposed bill would additionally encompass private sector events where specific individuals control or possess advance knowledge of outcomes. This includes wagering on specific language a politician might use or entertainment selections for major events like Super Bowl halftime performances.
Both legislators voiced alarm regarding financial relationships between the Trump family and prediction market operators. Casar highlighted that Donald Trump Jr. maintains an investment position in Polymarket and receives compensation as an advisor to Kalshi.
Trump Jr. is simultaneously developing a Trump-affiliated prediction market platform called Truth Predict. Casar argued the present administration will not pursue enforcement action against these activities due to their financial involvement.
Murphy identified a concerning precedent established by White House leadership. He suggested the president is communicating to administration personnel that exploiting their access to power for financial benefit is acceptable.
Regarding potential Republican backing, Casar recognized the challenge ahead. He mentioned private discussions with certain Republican colleagues revealed understanding of the dangers but acknowledged the political obstacles.
Murphy indicated the BETS OFF Act represents one of multiple congressional initiatives addressing prediction markets. Additional proposed legislation focuses on sports wagering and election-focused betting platforms.
Survey research conducted by Data for Progress revealed 59% of voters reject allowing bets on government activities. Opposition crosses party lines with 60% of Democrats, 61% of Independents, and 57% of Republicans opposing such markets.
Support for prohibiting elected officials from participating in prediction markets reaches 67%. The highest levels of concern involve markets connected to terrorism at 82% and political assassinations at 78%.
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