DEATH BETS Act: banning online wagers on assassinations, terrorism, war
Military members with top-secret info may have profited from bets on January’s Venezuela raid and February’s Iran bombing. Should that be illegal?
Context
Online “prediction markets,” like Polymarket and Kalshi, let users bet on just about anything: who will be cast as the next James Bond, who will be elected president in 2028, even whether Jesus will return in 2026. (Current odds, as of this writing: 4%.)
In January, an anonymous Polymarket trader earned more than $400,000 correctly betting when Venezuelan President Nicolás Maduro would be out of power.
Another anonymous Polymarket user earned more than $500,000 correctly betting when the U.S. would strike Iran, shortly before the actual bombing in late February.
(Although you shouldn’t trust that person’s predictions on everything: a few days prior, they also lost money betting Hamnet would win the Academy Award for Best Picture, when One Battle After Another won instead.)
A few weeks into the Iran conflict, traders bet more than $500 million about the price of crude oil within 15 minutes before President Donald Trump announced a delay attacking Iran’s energy infrastructure, which sent the price of oil way down.
In response, the White House warned staff not to place bets about the Iran war, the Wall Street Journal reported.
Perhaps these people just guessed about the Maduro raid, the Iran bombing, and the price of oil, getting really lucky? It strains belief.
Although just last month, Pennsylvania eighth grader Otto Schellhammer predicted the world’s last remaining perfect March Madness bracket, despite admitting he didn’t know much about basketball.
What the legislation does
Two similar pieces of congressional legislation would prohibit wagers about assassinations, terrorism, and war.
The DEATH BETS Act stands for Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems.
The Senate version was introduced on March 10 by Sen. Adam Schiff (D-CA), then the House version was introduced a week later by Rep. Mike Levin (D-CA49) on March 16.
The BETS OFF Act stands for Banning Event Trading on Sensitive Operations and Federal Functions.
The House version was introduced on March 17 by Rep. Greg Casar (D-TX35), while the Senate version was introduced that same day by Sen. Chris Murphy (D-CT).
What supporters say
Supporters argue that while betting is all fine and well for football or baseball scores, or next week’s Billboard #1 song, some things just should just be beyond the pale.
“When events that involve good and evil, life and death become just another financial product, morality no longer matters and the soul of America is fundamentally corrupted,” Sen. Murphy said in a press release. “This bill will stop the transformation of our society into a rigged video game casino.”
“America is facing a crisis of corruption, and [this] bill is about cracking down on one of the most dangerous new forms… infecting our government,” Rep. Casar said in the same press release. “Too often, prediction markets are becoming yet another place for rich and powerful people to cash in on insider information.”
What opponents say
Opponents counter that even such seemingly-sordid bets can serve a value to the public, so the solution is regulation rather than prohibition.
“No one wants policymakers going to war to cash in on bets… but this is an argument for contract design and targeted restrictions, not blanket bans,” University of Chicago law professor M. Todd Henderson and NYU Law School fellow Max Raskin wrote in a Washington Post opinion column.
“Society relies on the fact that while making money is often an incentive to do great things, making money is generally not a motivator for people to do horrific things,” Henderson and Raskin continued. “The crazed violence of terrorists and school shooters is usually not motivated by money.”
What happens now?
Between the two bills, the BETS OFF Act has more cosponsors.
The Senate version has attracted two cosponsors, both Democrats. It’s been referred to the Senate Judiciary Committee.
The House version has attracted six cosponsors, also all Democrats. It’s been referred to the House Financial Services, Judiciary, and Agriculture Committees.
Wait… why the Agriculture Committee, of all things?
Prediction markets are regulated by the CFTC, or Commodity Futures Trading Commission – which falls under the Agriculture Committee’s jurisdiction. This is an accident of history, as the CFTC was originally created to enforce an agricultural law: the Grain Futures Act of 1922.
One more thing: just last night, in a complete coincidence, Last Week Tonight with John Oliver ran a 33-minute segment about prediction markets, touching on some of these same topics. He didn’t mention either the DEATH BETS Act or the BETS OFF Act, though.