Crypto prediction platform Polymarket and derivatives exchange Kalshi were closing in on $20 billion valuations when the US Congress decided it had seen enough.
A Bill Targeting Crypto And A Very Long Acronym
Senator Chris Murphy of Connecticut and Rep. Greg Casar of Texas introduced the BETS OFF Act this week — short for Banning Event Trading on Sensitive Operations and Federal Functions.
The legislation would make it illegal to place, accept, or facilitate bets on terrorism, assassinations, wars, or any event where someone already knows the outcome or has the power to determine it.
The bill doesn’t stop at US borders. Because many of these contracts trade on offshore crypto platforms, the legislation would extend federal gambling laws to reach international operators.
Payment processors would be required to cut off money flows to prohibited platforms. US-based individuals who run or promote these businesses could face criminal penalties.
Any registered commodity exchange listing these types of contracts would also be barred from doing so.
The law would take effect 30 days after being signed.
Suspicious Trades That Caught Washington’s Attention
The bill’s arrival follows a pair of incidents that drew intense scrutiny on Capitol Hill. Hours before US military strikes on Iran — and before American forces extracted Venezuelan President Nicolás Maduro — anonymous accounts on Polymarket placed large bets on those exact outcomes. They walked away with hundreds of thousands of dollars.
Murphy argued this creates a dangerous setup: when people connected to government decisions can profit anonymously from bets placed before those decisions go public, the line between governing and gambling disappears.
The concern isn’t just corruption. It’s that decision-makers could develop a financial interest in pushing policy toward specific outcomes.
Polling backs up public concern. According to data from Data for Progress, 61% of independents and 57% of Republicans support banning wagers on government actions. Opposition to betting markets tied to terrorism or assassinations is even higher — 80% of voters said no.
Four Bills In Under Three Months
The BETS OFF Act is part of a rapid pile-on from lawmakers. It’s the fourth major piece of legislation targeting crypto prediction markets since January.
In January, Rep. Ritchie Torres of New York introduced a bill barring federal officials from betting on markets tied to government decisions — a direct response to a trader who turned $30,000 into more than $400,000 betting on Maduro’s capture before it happened.
On March 5, a bipartisan pair — Blake Moore of Utah and Salud Carbajal of California — filed a bill requiring the Commodity Futures Trading Commission to ban contracts on terrorism, war, elections, and government activity, with a carve-out letting individual states allow sports betting.
Five days later, Senator Adam Schiff and Rep. Mike Levin introduced the DEATH BETS Act, targeting contracts tied to war, assassination, and individual deaths.
That bill came after $529 million in Iran-related trades hit Polymarket in a single stretch.
Featured image from Thomas Fuller/SOPA Images/LightRocket via Getty Images, chart from TradingView
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