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A group of six Democratic senators is asking federal regulators to make one thing clear: Contracts tied to a person’s death or physical harm should not be allowed on U.S. prediction markets.
In a letter sent to Commodity Futures Trading Commission Chairman Michael Selig, the lawmakers urged the agency to formally prohibit any event contract that resolves based on an individual’s death.
The request comes as platforms like Polymarket and Kalshi continue to grow in popularity, drawing more traders, higher volume and increased scrutiny.
Lawmakers warn of national security risks
Sen. Adam Schiff led the letter, joined by Sens. Richard Blumenthal, Cory Booker, Tim Kaine, Catherine Cortez Masto and Jacky Rosen. Their concern centers on contracts that, in their view, drift into morally and legally dangerous territory.
According to a news post by Legal Sports Report, the senators argue that contracts resolving on death or physical harm create perverse incentives; financial rewards tied to violence, geopolitical instability or classified information could encourage bad actors to manipulate outcomes or exploit insider knowledge.
The Senators’ letter to the CFTC states that such markets “present dangerous national security risks,” particularly when sensitive events or military actions are involved. Federal commodities law already prohibits contracts tied to terrorism, assassination or war under public interest standards in the Commodity Exchange Act. The senators want the CFTC to explicitly clarify that death-linked contracts fall into that same prohibited category.
Polymarket examples spark controversy
Several recent contracts on Polymarket were highlighted as examples of what lawmakers see as troubling territory. One involved a market tied to the potential failure of NASA’s Artemis II mission. At one point, traders could wager on whether the launch would “explode,” with the “Yes” side briefly trading as high as 8% before the contract was renamed and eventually withdrawn following public backlash.
Lawmakers argued the market effectively correlated with astronaut death and incentivized mission failure. Polymarket responded that the contract focused on a defined hardware failure scenario, not crew injury.
Another contract concerned the potential removal of Venezuelan President Nicolás Maduro from power. According to reporting cited in the letter, a trader placed bets shortly before a U.S. military strike led to Maduro’s capture, generating outsized profits when the market resolved. Senators pointed to that episode as a warning about insider-trading risks in loosely monitored event markets.
A third example involved a war-related territorial outcome in Ukraine. After Polymarket resolved a contract predicting that Russian forces would capture the town of Myrnohrad, some traders reportedly saw massive percentage gains. Lawmakers referenced subsequent reporting about map edits by a think tank staffer, raising questions about information integrity.
CFTC faces pressure amid industry expansion
The letter arrives at a pivotal moment for prediction markets. Trading volumes have surged, particularly on sports-related contracts, and regulatory lines remain contested in courtrooms and statehouses nationwide.
Chairman Selig recently emphasized the CFTC’s exclusive jurisdiction over federally regulated derivatives markets, pushing back against state-level efforts to impose their own restrictions. The agency also withdrew a 2024 rule proposal that would have limited certain sports and political event contracts.
Now, senators are asking for direct answers. They requested a formal response by March 9 clarifying whether death-linked markets violate existing law and whether the cited contracts crossed that line.
While prediction markets have built their brand around transparency and price discovery, critics counter that some contracts risk turning real-world harm into a tradeable asset. The CFTC’s response could shape where that boundary ultimately falls.
