Congress moves to ban event contracts tied to war and death as concerns grow over insider trading, ethics, and national security risks.
U.S. lawmakers are moving to restrict prediction markets tied to violent events. A new bill seeks to ban contracts linked to death, war, and assassinations. Supporters argue that such markets raise ethical concerns and pose potential national security risks.
Lawmakers Propose Ban on Prediction Markets Tied to Violent Events
Representative Mike Levin and Senator Adam Schiff have proposed a new bill that would ban betting markets linked to violent events. They announced the legislation on Tuesday as concerns grow about prediction markets tied to tragedies such as war, death, or assassinations.
Lawmakers titled the proposal the Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act. The bill is also known as the Death Bets Act.
Levin argued that current laws leave loopholes that allow traders to profit from harmful events. In his view, markets should not allow people to make money from violence or human suffering.
I’m introducing a bill to ban bets on war and death in prediction markets.
Betting on war and death creates an environment in which insiders can profit off of nonpublic information, our national security is jeopardized, and violence is encouraged.
Congress must act. pic.twitter.com/ahb9EczNvP
— Adam Schiff (@SenAdamSchiff) March 10, 2026
In addition, Schiff warned about security risks, noting that prediction markets tied to violent outcomes could attract participants with access to sensitive or insider information. As such, it could create serious ethical and national security concerns.
“Betting on war and death creates an environment in which insiders can profit off classified information, our national security is jeopardized, and violence is encouraged.”
Schiff said.
The representative also warned that prediction markets now resemble a “Wild West” with limited rules.
If the bill becomes law, any registered trading platform would not be allowed to list or process these types of event contracts. Lawmakers say the goal is to remove a category of bets many officials see as unethical and risky.
To enforce this, the bill would modify Section 5c of the Commodity Exchange Act. The change would ban trading agreements or swaps connected to these events, including any contract related to an individual’s death.
U.S. Lawmakers Push for Clearer Rules on Event Trading
Current law already gives regulators some authority to restrict these contracts. Under the Commodity Exchange Act, the Commodity Futures Trading Commission can block contracts tied to war, terrorism, or assassination.
Regulators may act if such contracts conflict with the public interest. However, that decision remains at the agency’s discretion. Supporters of the new bill argue that discretion is no longer enough.
Their proposal would remove that flexibility and place an outright ban on these types of contracts. Also, regulators are reviewing the broader role of prediction markets. Michael Selig recently said the agency plans to release new guidance on event-based trading.
Officials want clearer rules governing how prediction markets should operate within the U.S. system. Selig also noted that blockchain technology could help improve transparency.
Earlier this month, Senators Jeff Merkley and Amy Klobuchar introduced another proposal. The bill, called the End Prediction Market Corruption Act, would stop federal officials from trading event contracts.
Restrictions would apply to the president, vice president, and members of Congress. Last month, blockchain analytics firm Bubblemaps flagged suspicious trading on Polymarket linked to geopolitical events.
Researchers found several newly created wallets that earned about $1 million from bets tied to a U.S. military strike. The activity occurred shortly before the reported attacks involving Iran.
That discovery raised questions about possible information leaks and market abuse.
As a result, legal pressure on prediction markets continues to grow. Several U.S. states have already opened enforcement cases tied to gambling laws. Federal lawmakers now want tighter limits as prediction platforms expand across crypto and traditional finance.
