US Lawmakers Move to Ban Prediction Markets Tied to Military Action

US lawmakers are scrambling to address concerns over prediction markets after $679 million in Iran war bets were placed on contracts tied to military action. The Democrats' efforts aim to curb the most politically sensitive corners of these markets, which have been criticized for allowing insider trading and profiteering from national security events.

The Commodity Futures Trading Commission (CFTC) is preparing a broader rulemaking that could preserve a legal path for many prediction markets rather than shutting down the sector. CFTC Chairman Michael Selig acknowledged the risk of pushing these markets offshore, comparing it to the emergence of crypto.