Senators push CFTC to ban 'perverse' death prediction markets
Six US senators, led by California’s Adam Schiff, have formally urged the Commodity Futures Trading Commission (CFTC) to categorically ban prediction market contracts that resolve based on death, warning the products pose serious national security and ethical risks.
In a letter sent Monday to CFTC Chairman Michael Selig, the lawmakers called on the regulator to “clearly reiterate” that any contract tied to physical injury or death is prohibited under existing rules and to enforce the law more aggressively. The letter raises the senators’ concern about “prediction contracts that incentivise physical injury or death, and the grave and perverse moral and geopolitical implications of these contracts.”
Senators warn of ‘dangerous’ incentives
The letter argues that certain prediction contracts create dangerous incentives that could encourage violence, geopolitical instability and misuse of confidential information. “These contracts present dangerous national security risks, including creating incentives to incite violence, foment geopolitical conflicts, and disclose classified information,” the senators wrote.
The lawmakers said recent activity shows the risks are no longer theoretical, pointing to the growing availability of such markets on offshore exchanges. Under 17 CFR 40.11, the CFTC already prohibits contracts involving terrorism, assassination, war or similar activity deemed contrary to the public interest. The senators are pressing the agency to clarify that death-linked markets fall squarely within that ban. Alongside Schiff, the letter was signed by Richard Blumenthal (Connecticut), Cory Booker (New Jersey), Tim Kaine (Virginia), Catherine Cortez Masto and Jacky Rosen (Nevada).
Polymarket contracts under scrutiny
The senators singled out three contracts on offshore platform Polymarket that they believe may violate the Commodity Exchange Act’s public-interest protections.
These are:
- “Artemis II explodes?” — A market tied to a NASA mission
- “Maduro out by…” — A contract linked to Venezuelan President Nicolás Maduro
- “Will Russia capture Myrnohad by…” — A market related to the Ukraine war
The lawmakers wrote that a “reasonable individual” could interpret these contracts as falling within prohibited categories such as war or assassination.
High-profile trading incidents highlight risks
The letter details three recent episodes the senators say demonstrate the potential harms. In January, Polymarket listed the“Artemis II explodes?” contract, with YES trading as high as 8 percent before the market was renamed and ultimately withdrawn following public backlash. Lawmakers argued the contract effectively incentivised mission failure and potential insider sabotage.
Separately, a Wall Street Journal report described how an unknown trader allegedly turned a $20,000 position on the“Maduro out by…” market into more than $400,000 in profit after geopolitical developments moved the market.
The Polymarket controversy reignited concerns over insider trading on prediction platforms. As noted in the letter, a newly created Polymarket account placed over $30,000 on contracts predicting Maduro would be out of office by 31 January 2026. This came shortly before the US operation, which resulted in the account generating profits exceeding $400,000 in less than a week, a return of more than 1,200 percent.
The senators also pointed to a November 2025 Ukraine-related contract in which YES bettors reportedly earned returns of up to 33,000 percent. Subsequent reporting suggested a think-tank staffer edited a battlefield map despite limited evidence of Russian advances.
VPN access raises US oversight concerns
Although Polymarket’s US-facing platform currently offers only sports markets, the senators warned that American users can still access the offshore site via Virtual Private Network (VPNs). In September last year, Polymarket received approval to reenter the US market following its acquisition of a CFTC-licensed derivatives exchange. Polymarket confirmed approval to offer prediction markets and legal sports betting across all 50 states.
The Commodity Futures Trading Commission (CFTC) announced on 3 September that its staff has issued a “no-action position” on Polymarket-owned designated contract market (DCM) QCX LLC and designated clearing organization (DCO) QC Clearing LLC, collectively referred to as QCEX. The decision relates to swap data reporting and recordkeeping regulations for event contracts.
Lawmakers demand formal answers
The senators requested detailed responses from the CFTC by 9 March 2026, including whether the agency:
- Interprets death-linked contracts as contrary to the public interest
- Considers such markets covered by the assassination prohibition
- Plans to call in potentially non-compliant contracts for review
- Will issue further guidance on markets tied to war, terrorism or assassination
They also asked how often the CFTC has used its authority under 17 CFR 40.11 over the past year.
Growing pressure on prediction markets
The intervention comes amid surging interest in prediction markets and rising scrutiny around regulation, insider trading risks and potential links to gambling-like behaviour.
The senators concluded that the “letter and spirit” of existing law is clear and urged the regulator to act decisively. “We expect the CFTC to enforce the law, and stand ready to provide the Commission the resources it needs to fulfil its statutory mandate,” the letter states. The CFTC has not publicly responded to the letter at the time of writing.
Recently, the CFTC asserted that individual US states lack authority to regulate prediction markets, with Chairman Michael Selig arguing in a Wall Street Journal opinion piece that such platforms fall under the federal Commodity Exchange Act rather than state gambling laws.
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