Democratic lawmakers in the U.S. are preparing legislation to regulate prediction markets after reports that people with inside knowledge placed wagers on the timing of Israeli and U.S. strikes on Iran.
Senator Chris Murphy said in a video posted to X that what he described as White House insiders made “a very specific bet” on Friday that the U.S. would strike Iran the following day. Murphy told viewers it was likely the bettors had inside information and warned that allowing bets on war could create perverse incentives, including the risk that people close to the president might push for military action to profit financially.
Reuters reported that Murphy and Representative Mike Levin are drafting a bill aimed at platforms such as Polymarket and Kalshi. The move follows widely shared reports that six newly created accounts on Polymarket earned about $1 million combined from wagers on when the U.S. would strike Iran, with some bets placed hours before explosions were first reported in Tehran. Polymarket’s event tracking shows roughly $529 million in volume across U.S.-strikes-in-Iran markets. Separately, a Polymarket user reportedly won roughly $400,000 by betting on the capture of Venezuelan President Nicolás Maduro last month.
Levin said using advance knowledge of military action for financial gain should be illegal. He noted that commodity rules already prohibit event contracts tied to war, terrorism or other outcomes contrary to the public interest, but argued that regulatory gaps have allowed prediction markets too much latitude.
The episode has intensified scrutiny of decentralized and online betting platforms that let users stake money on geopolitical events. Lawmakers are debating whether new statutory restrictions are needed or whether existing commodity and securities rules should be enforced more strictly to prevent insider trading and to limit markets that could undermine the public interest.
The publisher emphasizes its commitment to independent, transparent journalism and encourages readers to verify information independently.