Democratic lawmakers are moving to shut down one of the most controversial corners of prediction markets: contracts that let traders wager on war, assassinations, terrorism, and individual deaths.
On Tuesday, Representative Mike Levin of California’s 49th district and Senator Adam Schiff of California introduced a new bill with an unmistakable name: the Discouraging Exploitative Assassination, Tragedy, and Harm Betting in Event Trading Systems Act – shortened to the DEATH BETS Act.
The proposed legislation would amend the Commodity Exchange Act to make it explicitly illegal for any exchange registered with the Commodity Futures Trading Commission (CFTC) to list, trade, or clear contracts that “involve, relate to, or reference” terrorism, assassination, war, or the death of specific individuals. In practice, that would effectively shut the door on regulated markets that allow people to bet on whether a particular leader will be killed, whether a conflict will escalate, or whether specific violent events will occur.
The move comes at a moment when the CFTC has been signaling a willingness to further formalize and expand the regulatory framework around event contracts and prediction markets. While the agency has cracked down on some platforms in the past, it has also been considering a clearer set of rules for what kinds of real‑world events can legitimately be the subject of tradable contracts. The DEATH BETS Act aims to draw a bright red line within that evolving regime: whatever rules the CFTC develops, they must not allow markets that turn war and death into financial products.
Levin and Schiff cast the bill as a necessary ethical barrier in an increasingly financialized information environment. They argue that permitting markets on violent outcomes doesn’t just feel morally wrong; it also creates perverse incentives and the risk of abuse by people with access to sensitive, nonpublic information. In their view, giving speculators the ability to profit directly from geopolitical catastrophe undermines both public trust and national security.
The legislation specifically targets CFTC‑registered entities – meaning exchanges and platforms that operate under U.S. derivatives law or seek to do so. That’s a critical detail: some prediction platforms have attempted to move from legally gray territory into a more formal, regulated status by treating event contracts as a form of derivatives product. Under the DEATH BETS framework, they could only do that if they agree to exclude any markets linked to terrorism, assassination, warfare, or individual deaths.
Supporters of the bill are likely to argue that a regulated marketplace for these kinds of contracts does not exist in a vacuum. If serious money can be earned by correctly forecasting a coup, a targeted killing, or the outbreak of a new conflict, then insiders in governments, militaries, intelligence agencies, or private security firms could be tempted to misuse their positions. Even absent outright wrongdoing, the optics of officials or contractors trading on life‑or‑death outcomes would be politically explosive.
The push also highlights growing tension around the broader role of prediction markets. Advocates say that letting people “bet” on future events, from elections to economic data, can aggregate dispersed information and produce surprisingly accurate forecasts. Critics counter that once betting slips into human tragedy – natural disasters, pandemics, violent attacks – the line between information aggregation and exploitation becomes impossible to ignore. The DEATH BETS Act effectively accepts the usefulness of some event contracts while insisting that there are hard ethical limits.
If passed, the bill would likely force both traditional derivatives exchanges and crypto‑native prediction platforms to revisit their product offerings. Any platform hoping to operate above board in the U.S. market would have to build compliance controls to screen out prohibited categories. That could mean stricter oversight of user‑proposed markets, automated content filters, and more aggressive internal review processes whenever contracts touch on geopolitics or public safety.
The legislation may also have a chilling effect on borderline markets that do not explicitly reference death or terrorism but are closely tied to the likelihood of violent outcomes. For example, contracts about whether a specific international dispute will “escalate to armed conflict” or whether a particular military operation will occur could come under scrutiny, depending on how regulators interpret the statute. Exchanges may decide to err on the side of caution and simply avoid anything in the gray zone.
At the same time, the bill leaves room for a larger debate about where to draw the boundaries. Many widely accepted financial products already reflect expectations about war and peace – defense stocks, energy futures, sovereign credit default swaps, and more all move on news about conflict. What makes a direct bet on “war” or “assassination” unacceptable, while indirect exposure through equity and bond markets remains legal? Backers of the DEATH BETS Act are effectively arguing that explicit, contract‑level wagers on individual tragedies cross a moral and social line that ordinary investment instruments do not.
For the CFTC, the proposal underscores how politically sensitive the event‑contracts space has become. Any regulatory framework it develops will now need to be reconciled with the possible passage of this act. Even if the law does not change immediately, the signal from Congress is clear: regulators are expected to prioritize human dignity and security over innovation when those two are in direct conflict.
There is also an international dimension. Many prediction markets operate online and can be accessed from multiple jurisdictions. A strict U.S. prohibition on death‑related contracts could push some platforms offshore or into purely decentralized models that try to route around regulation entirely. That, in turn, would raise enforcement questions: how far can U.S. authorities go in pursuing foreign or protocol‑based markets that list contracts deemed illegal under American law?
Investors and builders in the crypto and fintech sectors will be watching closely. If the DEATH BETS Act gains traction, it could become a template for other countries looking to set normative boundaries around prediction markets. Alternatively, a drawn‑out legislative fight might signal that lawmakers are still divided over how to balance free markets, informational efficiency, and moral concerns.
Beyond the technical details, the bill surfaces a larger societal question: should everything that can be predicted and priced be turned into a financial product? Levin and Schiff’s answer is clearly no, at least when it comes to human lives and mass violence. Their proposal attempts to codify that intuition into law, setting a precedent that some outcomes are simply too sensitive – and too dangerous – to be gambled on, no matter how sophisticated the trading platform or how enthusiastic the market.