Senator Schiff Introduces DEATH BETS Act to Ban War and Death Bets on Markets

Senator Adam Schiff has introduced the DEATH BETS Act, a legislative proposal designed to explicitly ban prediction market contracts tied to war, terrorism, assassination, and individual deaths on federally regulated platforms.

“"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."”

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The legislation aims to address what Schiff describes as a 'Wild West' environment where prediction markets have become increasingly controversial for allowing speculation on violent events and geopolitical conflicts.

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Schiff argues that these markets create dangerous incentives that can jeopardize national security, encourage violence, and enable insiders to profit off classified information.

The bill represents a direct challenge to the Commodity Futures Trading Commission's (CFTC) current regulatory approach and its Chair Michael Selig's announced shift toward more permissive regulation of event contracts.

Under the current regulatory framework established by the Commodity Exchange Act, the CFTC already possesses authority to prohibit war, terrorism, and assassination contracts if determined to be contrary to the public interest.

However, this regulatory approach grants the CFTC significant discretion in determining what constitutes being 'contrary to the public interest,' creating uncertainty that shifts with agency leadership.

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Schiff's DEATH BETS Act would eliminate this flexibility by codifying explicit prohibitions that would apply regardless of who chairs the CFTC.

The legislation would prohibit any CFTC-registered exchange from listing contracts involving, relating to, or referencing terrorism, assassination, war, or an individual's death, extending even to contracts that could be 'construed as correlating closely' to a person's death.

The legislative push comes amid growing concern over controversial prediction market contracts that have already generated substantial trading volume.

“The introduction of this bill follows platforms listing prediction contracts relating to war and death, such as whether Iran's Ali Khamenei would be 'out as Supreme Leader' which had $54 million in trading volume on Kalshi before it was paused. The Senator previously raised the alarm and wrote to the CFTC along with other Senators on these 'death contracts' being offered on offshore exchanges such as Artemis II would explode, if Maduro would be removed from power, and whether the Ukrainian town of Myrnohad would be captured by Russian forces.”

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Schiff's office highlighted several examples, including a market speculating on whether Iran's Supreme Leader Ali Khamenei would be removed from power, which reportedly generated $54 million in trading volume on Kalshi before being paused.

Other controversial contracts cited by Schiff include predictions about whether Venezuelan President Maduro would be removed from power, whether Artemis II would explode, and whether the Ukrainian town of Myrnohad would be captured by Russian forces.

Levin emphasized that 'Over half a billion dollars was wagered on the timing of U.S. military strikes on Iran alone,' describing this as 'unacceptable' and calling for legislative action to put a stop to such practices.

Supporters of the DEATH BETS Act argue that existing law gives regulators too much discretion to block such contracts only if deemed contrary to the public interest, creating regulatory uncertainty.

Schiff and other supporters contend that there is no justification for gambling on lives or any public benefit to be derived from such markets.

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They warn that these contracts present dangerous national security risks, including creating incentives to incite violence, foment geopolitical conflicts, and disclose classified information.

Schiff has been joined in his efforts by other senators who wrote to the CFTC urging it to 'clearly reiterate' that the agency would prohibit any contract that resolves upon or closely correlates to an individual's death.

However, the legislation faces an uphill battle in the current political landscape where Republicans control the Senate majority, making immediate passage unlikely.

The DEATH BETS Act is part of a broader legislative effort addressing prediction markets, with Schiff introducing his bill as companion legislation is also being pursued in the House of Representatives.

“Rep. Mike Levin (D-CA) will be introducing companion legislation in the U.S. Also on Wednesday, Senator Richard Blumenthal, a Democrat from Connecticut, pushed the Prediction Markets Security and Integrity Act to police fraud in the markets.”

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Representative Mike Levin (D-CA) is set to introduce a companion version of Schiff's legislation in the U.S. House, creating a coordinated congressional response to prediction market regulation.

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Meanwhile, Senator Richard Blumenthal has introduced separate legislation called the Prediction Markets Security and Integrity Act, which targets fraud and insider trading in prediction markets rather than specifically focusing on death and war contracts.

The timing of these legislative efforts coincides with CFTC Chairman Michael Selig's announcement at the FIA Global Cleared Markets Conference that he had directed staff to draft guidance on event contracts and would launch an advanced notice of proposed rulemaking to solicit public input on the prediction markets sector.