TLDR
- The BETS OFF Act, introduced by Senator Chris Murphy and Rep. Greg Casar, would criminalize prediction market wagering on military operations, government actions, and terrorism
- Approximately 150 Polymarket accounts exhibited suspicious betting patterns preceding US military strikes on Iran, with one individual profiting nearly $500,000
- Proposed legislation includes criminal sanctions for platform operators and payment processing restrictions for prohibited platforms
- Congressional sponsors raised concerns about Trump family investments in Polymarket and Kalshi, including development of a Trump-branded platform
- Survey data reveals 59% of Americans oppose betting on government actions, while 82% express concern about terrorism-related prediction markets
A bipartisan group of US legislators has unveiled new legislation designed to criminalize betting on sensitive government operations, military actions, and related events. The proposed law specifically targets prediction market operators such as Kalshi and Polymarket.
Dubbed the Banning Event Trading on Sensitive Operations and Federal Functions Act—abbreviated as the BETS OFF Act—the legislation comes from Senator Chris Murphy representing Connecticut and Representative Greg Casar from Texas.
Additional co-sponsors backing the measure include Colorado Senator John Hickenlooper alongside Representatives Yassamin Ansari, Gabe Amo, and Rashida Tlaib.
During Tuesday’s press briefing, Murphy characterized prediction markets as “fundamentally corrupt markets rife with insider trading.” The proposed legislation would modify current gambling statutes to prevent payment processors from servicing prohibited platforms.
US citizens who operate or promote these markets would face criminal prosecution under the bill. Industry representatives have countered that their platforms serve as forecasting instruments subject to federal derivatives regulation.
Suspicious Activity Before Iran Strikes
Legislators highlighted what they characterized as irregular wagering behavior on Polymarket preceding American military operations against Iran. According to Casar, approximately 150 user accounts placed wagers one day before the strikes predicting military engagement would commence the following day.
Among these accounts, 109 generated profits exceeding $10,000. Sixteen accounts earned more than $100,000, while a single participant collected nearly half a million dollars in winnings.
Murphy noted that the majority of these accounts were registered on the identical day the wagers were executed. This pattern, he contended, indicates individuals with privileged information about the impending attack may have exploited their knowledge for profit.
The lawmakers also referenced comparable betting patterns observed before a US operation in Venezuela. Casar emphasized the disparity between working-class military personnel risking their lives and others exploiting advance knowledge for financial gain.
Trump Family Ties and Political Pushback
Beyond insider trading implications, Murphy contended that prediction markets establish problematic incentives for government personnel. He suggested presidential advisors might base critical decisions on their wagering positions rather than national security considerations.
The proposed legislation would additionally encompass private sector events where individuals control or possess advance knowledge of outcomes. This includes wagers on specific words politicians might utter or which artist will headline the Super Bowl halftime performance.
Both legislators expressed concern regarding the Trump family’s financial involvement with prediction market operators. Casar highlighted that Donald Trump Jr. holds an investment stake in Polymarket while serving as a compensated advisor to Kalshi.
Trump Jr. is simultaneously developing Truth Predict, a Trump-branded prediction market platform. Casar argued the current administration lacks incentive to regulate this industry given their financial interests.
Murphy described a broader pattern established by White House leadership. He contended the president signals to administration staff that leveraging their access to power for financial benefit is acceptable.
When questioned about Republican backing, Casar acknowledged the obstacles. While private discussions with certain Republican colleagues revealed recognition of the risks, he noted the significant political hurdles.
Murphy indicated the BETS OFF Act represents one among multiple congressional initiatives addressing prediction markets. Other proposed legislation focuses on sports wagering and election-related betting platforms.
Data for Progress polling indicates 59% of voters oppose wagering on government operations. This sentiment spans 60% of Democrats, 61% of Independents, and 57% of Republicans.
Support for prohibiting elected officials from participating in prediction markets reaches 67%. The highest concern levels involve markets connected to terrorism at 82% and political assassinations at 78%.
