Democrats' DEATH BETS Act Would Ban War and Death Betting

The DEATH BETS Act landed in Congress on Tuesday — and it's exactly what it sounds like. Rep. Mike Levin of California and Sen. Adam Schiff unveiled legislation to outright ban prediction market contracts tied to war, assassination, terrorism, and the deaths of individuals, framing the move as a national security imperative rather than a regulatory tweak.

What Is the DEATH BETS Act?

What would the DEATH BETS Act actually prohibit?

The bill's full name — Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act — tells you everything about the mood behind it. If passed, it would amend the Commodity Exchange Act to bar any CFTC-registered entity from listing, clearing, or settling contracts that involve, relate to, or reference terrorism, assassination, war, or an individual's death. Full stop. No carve-outs, no agency discretion.

That last part matters. Under existing law, the CFTC can block such contracts only if it determines they run contrary to the public interest — a judgment call that changes depending on who's running the agency. The DEATH BETS Act would codify the prohibition into statute, making it irrelevant who the next chair is.

Over half a billion dollars was wagered on the timing of U.S. military strikes on Iran alone. That is unacceptable, and this legislation puts a stop to it.

Why Now? The Markets That Triggered This

The bill didn't emerge from nowhere. Prediction markets have been expanding aggressively into territory that makes a lot of people uncomfortable — and the blowback has been building for months. Schiff and five Senate colleagues sent a letter last month urging CFTC Chairman Brian Selig to explicitly reaffirm the agency's authority to block death-linked contracts. The letter flagged Polymarket markets on Venezuela's Nicolás Maduro losing power (one trader reportedly pocketed more than $400,000), a bet on Russia capturing the Ukrainian town of Myrnohad where returns reportedly hit 33,000%, and a market speculating on whether the Artemis II spacecraft would explode.

Then last week, the Polymarket nuclear detonation market — which had pulled in more than $838,000 in volume and briefly showed a 22% probability of a nuclear weapon being detonated by year-end — was pulled after a wave of public criticism. That one probably accelerated the legislative calendar considerably.

The CFTC Is Moving Too — But in the Opposite Direction?

Here's where it gets interesting. The same week Democrats introduced this ban, CFTC Chairman Brian Selig was on stage at the FIA Global Cleared Markets Conference in Boca Raton, Florida, announcing his agency's plans to expand the regulatory framework for event contracts — not restrict them. Selig directed staff to draft new guidance on how prediction market contracts may be listed and traded, and said he would launch an advanced notice of proposed rulemaking to gather public input.

Calling the U.S. the 'crypto capital of the world,' Selig argued that prediction markets are 'now viewed by the public as more accurate than political polls' and declared the CFTC would stop sitting 'idly while these markets develop.' That's a notably different posture than what Levin and Schiff are pushing — and it sets up a real conflict between Congress and the regulator.

Does the Kalshi Lawsuit Change the Calculus?

Timing-wise, the Kalshi class action lawsuit is doing the industry no favors. Plaintiffs allege that the platform applied a 'death carveout' clause to its market on whether Iran's Ayatollah Ali Khamenei would leave office — preventing the market from resolving at full payout after Khamenei died. Winning bettors say they were shortchanged. Whether or not Kalshi prevails, the optics are rough: a prediction market that profits from a clause specifically designed around someone's death, then refuses full payout when the event occurs.

For lawmakers looking to draw a bright line, that case is a gift. The DEATH BETS Act gives them a clean legislative hook to say: this entire category of contract shouldn't exist. Whether the Senate has appetite for it — especially with Selig signaling a more permissive regulatory stance — is a separate question entirely.