Representative Mike Levin and US Senator Adam Schiff of California are introducing bicameral legislation to prohibit event contracts related to war and death.
The Death Bets Act would explicitly prohibit any Commodity Futures Trading Commission (CFTC) registered entity from listing any contract that involves, relates to, or references terrorism, assassination, war, or an individual’s death.
The CFTC currently has the authority to prohibit war, terrorism, and assassination contracts from being listed if they are found to be contrary to the public interest.
The Death Bets Act would remove the CFTC’s discretion over these contracts and impose an unequivocal ban.
“Betting on war and death should be illegal. While federal law prohibits prediction market contracts on terrorism, war, and assassination, there are still gaping holes that allow traders to profit off death,” said Representative Levin. “The result is a system with nothing standing between a prediction market and a contract that lets someone make money off the outbreak of war or the deaths of American service members.
“We already saw what that looks like: 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.”
Senator Schiff added: “Betting on war and death creates an environment in which insiders can profit off of classified information, our national security is jeopardized, and violence is encouraged. There is no justification for gambling on lives, or public benefit to be derived by such a market.
“With regulators turning a blind eye, prediction markets have rapidly become the Wild West. As the CFTC seeks to rewrite the rules of the road, Congress must make clear that these death bets are unequivocally prohibited, and this bill would do just that.”
In addition to codify a prohibition on war, assassination, and terrorism contracts, The Death Bets Act explicitly prohibits contracts that involve death or may otherwise be construed to closely correlate with death, which is not currently referenced in the Commodity Exchange Act.