Key Takeaways
Contents
- California Senator Adam Schiff unveiled the DEATH BETS Act targeting prediction market contracts involving war, terrorism, assassination, and death
- The proposed legislation would establish permanent federal prohibitions, eliminating regulatory discretion from the CFTC
- More than $500 million in wagers on U.S. military strike timing against Iran was cited by Representative Mike Levin
- Connecticut Senator Richard Blumenthal put forward separate legislation addressing market manipulation and insider trading
- Blumenthal’s proposal would restore certain regulatory authority to state governments
A pair of legislative proposals from Democratic lawmakers seeks to restrict prediction market activity by prohibiting contracts related to military operations, casualties, and political violence.
On March 11, California’s Senator Adam Schiff unveiled the DEATH BETS Act. The proposed law would prohibit any CFTC-regulated platform from offering contracts based on terrorism, armed conflict, political assassination, or mortality.
The bill takes direct aim at the Commodity Exchange Act itself. By embedding prohibitions into statutory law, the measure would eliminate the need for regulatory interpretation.
Currently, the Commodity Futures Trading Commission maintains authority to determine if specific contracts violate “public interest” standards. However, these determinations shift with leadership transitions.
Mike Selig, the current CFTC Chair who assumed office in December, has demonstrated openness toward prediction market operations. Schiff’s legislation would strip both Selig and his successors of this discretionary power.
California Representative Mike Levin filed the House counterpart, creating a two-chamber legislative strategy.
In his public remarks, Levin highlighted the magnitude of betting activity. More than half a billion dollars in wagers focused solely on when American military forces would strike Iranian targets.
“That is unacceptable, and this legislation puts a stop to it,” Levin said.
National Security Concerns Drive Schiff’s Initiative
Schiff maintains that permitting wagers on warfare and mortality creates opportunities for individuals with access to classified intelligence to extract financial gain. According to the senator, such markets threaten national security and could potentially incentivize violent acts.
“There is no justification for gambling on lives, or public benefit to be derived by such a market,” Schiff said in a statement.
The legislation establishes expansive enforcement criteria. It would prohibit not only direct contracts but also those with strong correlations to human mortality.
This comprehensive language aims to prevent platforms from circumventing restrictions through creative contract structuring or alternative naming conventions.
Blumenthal’s Companion Bill Addresses Market Integrity
Simultaneously, Connecticut Senator Richard Blumenthal released his own legislative proposal. The Prediction Markets Security and Integrity Act concentrates on combating fraudulent activity, information abuse, and price manipulation.
Blumenthal characterized the prediction market sector as lacking proper oversight. His bill would establish “basic guardrails and safeguards” for industry participants.
Like Schiff’s measure, this proposal includes prohibitions on contracts involving armed conflict, casualties, and military operations.
A notable distinction involves regulatory jurisdiction. Blumenthal’s bill would grant states renewed oversight capabilities. This provision directly challenges CFTC Chair Selig’s recent assertions of exclusive federal regulatory control over prediction markets.
These twin legislative efforts reflect mounting Democratic concern about an industry that has experienced rapid expansion. Prediction markets achieved widespread recognition throughout the 2024 electoral season and have maintained growth momentum.
Blumenthal stated his bill “bans dangerous and unethical bets and protects consumers from fraud and other predatory practices.”
Both measures entered the legislative process on March 11. Each must advance through committee review before receiving consideration for floor votes in their respective chambers.
