Legislators Propose Legislation to Prohibit Polymarket US Prediction Market Agreements

Congress has recently targeted prediction markets such as Polymarket US and Kalshi, causing concern within the market. This week, House Democrats presented the ‘Banning Games on Deaths and Elections Act.’

This legislation would explicitly ban event contracts associated with elections, warfare, and death on platforms like Polymarket and Kalshi. The bill comes at a time when scrutiny over insider trading on these platforms has intensified.

JUST IN: U.S. lawmakers have introduced the “DEATH BETS Act” to prohibit prediction markets that allow traders to wager on war, assassinations, or fatalities. pic.twitter.com/UPyvHU5HQw

— SwanDesk (@SwanDesk) March 11, 2026

In a separate initiative, Sen. Adam Schiff and Rep. Mike Levin revealed the DEATH BETS Act, which also targets the same categories of contracts under the Commodity Exchange Act.

Rep. Jamie Raskin, who is spearheading the House initiative, described election gambling contracts as a direct threat to the integrity of democracy. This development coincides with a -1.8% decline in Bitcoin USD overnight, resulting in a loss of $70,000, with the current trading price at $69,500.

SOURCE: TradingView

What is the DEATH BETS Act, and What Does it Mean for Polymarket and Kalshi?

Both pieces of legislation seek to clarify the ambiguity in the Commodity Exchange Act concerning event contracts, especially those linked to assassinations, military actions, or election results. Their goal is to explicitly ban such contracts.

The Banning Games on Deaths and Elections Act would modify the Act to classify contracts involving these events as “contrary to the public interest,” a criterion the CFTC employs to prevent listings.

At present, there is no robust legislative basis for this definition, which enabled Kalshi to successfully contest the CFTC in court last year.

The DEATH BETS Act extends further, targeting any CFTC-registered exchange that manages contracts related to terrorism, assassination, warfare, or individual fatalities. Reports indicate that approximately half a billion dollars was wagered on the timing of U.S. military actions against Iran.

Research suggests that insiders gained significantly from these wagers, including one trader who made $553,000 from a contract associated with the assassination of Iranian Supreme Leader Khamenei.

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What This Means for Polymarket US and Kalshi

Regarding Khamenei:
We do not list markets directly associated with death. When markets exist where potential outcomes involve death, we establish rules to prevent individuals from profiting from such events. That is our approach here.
I understand that some of you disagree and would prefer that we list these…

— Tarek Mansour (@mansourtarek_) March 1, 2026

Kalshi and Polymarket took different approaches to the Iran contracts: Kalshi canceled its Supreme Leader contract due to a technicality in the wording, while Polymarket settled the bet, resulting in $679M in conflicting market outcomes and regulatory examination.

Kalshi won a legal dispute that allowed it to resume U.S. election betting, but the proposed Banning Games on Deaths and Elections Act could swiftly reverse that ruling.

Meanwhile, Polymarket continues to lead in global prediction market volume, with over $3.6Bn in bets during the 2024 presidential cycle alone, but may now encounter heightened scrutiny from the CFTC and SEC if the bill advances.

What Traders Are Watching Next in the Prediction Markets Space

BREAKING: A suspected military insider won $90K by accurately predicting 9 separate military events!
This individual is now placing significant bets on U.S. forces entering Iran!
He stands to win nearly $100K if he is correct. pic.twitter.com/L4rh2HI3r6

— PredictFolio (@PredictFolio) March 4, 2026

The political situation surrounding the DEATH BETS Act is complex. Representative Raskin and the sponsors are facing opposition from a crypto-friendly faction within a divided Congress, lacking cross-party support and scheduled committee votes.

At the same time, the CFTC aims to broaden the application of prediction markets through Cboe’s partial-payout framework. Economist Alex Tabarrok contends that restricting these markets impedes information aggregation, comparing event contracts to insurance products.

If either bill passes through the committee, the CFTC could promptly delist contracts related to warfare and death. Conversely, if both bills stall, the agency will continue to operate under its ambiguous mandate, permitting platforms like Kalshi and Polymarket US to function. The current focus remains on the text of the DEATH BETS Act and the committee timeline.

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