USA02 March, 20264 min read
Murphy and Casar Introduce BETS OFF Act to Ban Prediction Markets on Government Actions, Assassinations
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Murphy and Casar introduced the BETS OFF Act. The bill would ban prediction-market bets on government actions.
Legislative Overview
Democratic lawmakers Senator Chris Murphy and Representative Greg Casar have introduced the Banning Event Trading on Sensitive Operations and Federal Functions (BETS OFF) Act, a sweeping legislative response to concerns over insider trading and corruption in prediction markets. The bill creates a blanket prohibition against wagering on what it defines as 'specified events,' including acts of terrorism, assassinations, wars, and any government action whose outcome is under the complete control of any individual or known in advance. The legislation targets suspiciously timed bets that were placed on cryptocurrency-based prediction platforms like Polymarket before major U.S. military actions, raising alarms that government officials with insider information could profit from life-or-death policy decisions.
“Hours before both the U.S. strikes on Iran and the extraction of Nicolás Maduro in Venezuela, anonymous users placed massive bets correctly forecasting the events and cashed out for hundreds of thousands of dollars.”
The BETS OFF Act extends beyond domestic platforms to reach international operators, requiring payment processors to cut off financial flows to illegal platforms and imposing criminal penalties on U.S.-based individuals who promote or manage these businesses. Additionally, the bill amends the Commodity Exchange Act to bar registered entities from listing or clearing specified event contracts, creating comprehensive regulatory oversight across the financial industry.
Incident Triggers
The impetus for the BETS OFF Act stems from specific incidents involving prediction market activity that coincided with sensitive government operations. Hours before U.S. military strikes on Iran and the extraction of Nicolás Maduro in Venezuela, anonymous users placed massive bets on these events and cashed out for hundreds of thousands of dollars. These suspiciously timed wagers on the cryptocurrency-based prediction platform Polymarket raised serious concerns about potential insider trading by government officials with access to classified information.
The timing and accuracy of these bets suggested that individuals with advance knowledge of impending military actions were using prediction markets to profit from sensitive government decisions. Polymarket's connection to Trump administration figures, particularly Donald Trump Jr.'s role as an advisory board member and his partnership at 1789 Capital which invested in the platform, created a massive conflict of interest that lawmakers argue necessitates immediate legislative action. The legislation represents a direct response to what sponsors describe as a 'perverse incentive' structure that allows government officials or associates to profit from anonymous bets placed before policy decisions go public, effectively blurring the line between governance and gambling.
Ethical Concerns
The sponsors of the BETS OFF Act have articulated strong moral and ethical objections to treating sensitive government actions as speculative financial products. Senator Murphy argued that 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.' This perspective frames prediction markets on government actions not just as a regulatory issue, but as a threat to democratic integrity and ethical governance.
“Murphy added that '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.'”
Representative Greg Casar characterized the legislation as necessary to battle the 'crisis of corruption' engulfing the U.S. government during what he described as President Donald Trump's second term. The lawmakers emphasize that prediction markets create dangerous opportunities for wealthy and powerful individuals to cash in on insider information, effectively allowing them to profit from policy decisions that affect millions of lives. The sponsors warn that this dynamic warps policy-making by giving decision-makers a financial stake in specific outcomes, potentially influencing government actions based on personal financial gain rather than public interest or national security considerations.
Regulatory Context
The BETS OFF Act represents the latest in a concentrated legislative assault on prediction markets, which have faced increasing regulatory scrutiny. In January, Representative Ritchie Torres (D-N.Y.) introduced the Public Integrity in Financial Prediction Markets Act, which bars federal officials and executive branch employees from placing bets on markets linked to government decisions. This earlier legislation was triggered by a Polymarket trader who turned $30,000 into over $400,000 betting on Maduro's ouster hours before the U.S. action.
The new BETS OFF Act goes significantly further by establishing a comprehensive ban covering all specified events rather than just restricting federal employees. The broader regulatory framework includes amending federal gambling statutes to reach international operators, requiring payment processors to cut off financial flows to illegal platforms, and imposing criminal penalties on U.S.-based individuals who promote or manage these businesses. The legislation also amends the Commodity Exchange Act to bar any registered entity from listing or clearing the specified event contracts, creating a multi-layered approach to regulating these markets across different financial sectors.
Public Support
Public polling data indicates strong support for the type of ban established by the BETS OFF Act, suggesting the legislation reflects widespread public concern about insider trading in prediction markets. Research from Data for Progress found that 61% of independents and 57% of Republicans support banning wagers on government actions, while 80% of voters oppose betting markets on terrorism or assassinations. These polling results demonstrate bipartisan concern about the ethical implications of allowing prediction markets on sensitive government decisions and national security matters.
“Newpollingfrom Data for Progress found that 61% of independents and 57% of Republicans support banning wagers on government actions, while 80% of voters oppose betting markets on terrorism or assassinations.”
The strong public support for such regulations provides political momentum for the legislation and suggests it may face less resistance than other regulatory proposals. Additionally, Representative Rashida Tlaib (D-Mich.), who is co-sponsoring the BETS OFF Act along with Senator John Hickenlooper (D-Colo.), emphasized the moral dimension by stating that 'No one should be able to gamble on death and destruction, especially people connected to Trump with insider knowledge.' This statement reflects the broader public sentiment that prediction markets on life-and-death matters represent an unacceptable commodification of human suffering and national security decisions.