Two Democratic lawmakers introduced a bill today that would prohibit betting on prediction markets regarding government actions where a person knows or controls the outcome.
The proposal comes in response to reports that some accounts may have placed unusually high bets in the hours preceding some recent military operations by the United States. Legislators argue that this suspicious timing indicates the presence of government insiders operating with confidential information.
Lawmakers target betting in wartime
Senator Chris Murphy (D-Conn.) and Representative Greg Casar (D-Texas) introduced a bipartisan bill on Tuesday to ban betting on government decisions and national security-related events.
The bill is known as the BETS OFF Act, an acronym for Banning Event Trading on Sensitive Operations and Federal Functions. It would prohibit betting on prediction markets regarding government actions, terrorism, war, assassinations, and on outcomes that the bettor knows or controls in advance.
The measure comes after reports that some accounts placed high bets just before a U.S. military operation in Venezuela and the subsequent airstrikes on Iran.
Lawmakers argue that the timing strongly suggests it is insider trading by individuals with access to confidential government information.
'It seems quite clear what happened. People inside the White House, or very close to it, having knowledge of the imminent attack, took economic advantage of it. This is fundamentally corrupt, and frankly shocking to anyone that it is legal,' Murphy stated during the press conference.
Casar explained in detail. He specifically referred to the activities on prediction markets that occurred in the hours leading up to the joint U.S. and Israeli attack on Iran.
Insider earns $500,000 betting on an attack on Iran
The day before the start of the U.S. bombings against Iran, several specific bets were made. Most of the accounts had been created on the same day the bets were placed.
According to data presented by Casar, there were 150 accounts that made what he described as 'highly unusual bets' on Polymarket.
Of these accounts, 109 bet more than $10,000. Meanwhile, 16 placed bets exceeding $100,000. One person bet nearly $500,000.
'Half a million dollars bet on the start of a war that has cost taxpayers billions of dollars, the lives of over a dozen American military personnel, and countless civilians. While working-class kids were sent to fight and die in the Middle East, others took economic advantage of it,' Casar stated during the press conference.
Both members of Congress also condemned the role of the Trump administration in the surge of activity in prediction markets. They accused the president's family of fostering this kind of behavior.
'We know that, as in practically every other corruption story in Washington, D.C., the Trump family gets a slice of the profits,' Casar noted.
He specifically mentioned the role of Donald Trump Jr. as an investor in Polymarket and a paid consultant for Kalshi. He also highlighted Truth Predict, the latest crypto initiative backed by the Trump family that will operate as a prediction market.