Sen. Schiff introduces DEATH BETS Act to ban prediction market contracts related to terrorism, war, and assassination, addressing CFTC's deregulatory shift
Proposed Legislation Bans Event Trading Related to Terrorism, War, and Assassination
Sen. Adam Schiff (D-CA) has introduced the DEATH BETS Act, a bill that aims to ban prediction market contracts tied to terrorism, war, assassination, and death. This move directly confronts the CFTC's recent shift toward less stringent regulation of event trading, challenging the agency's new deregulatory agenda.
Background and Scope of the Legislation
The proposed legislation would explicitly prohibit any CFTC-registered exchange from listing contracts that involve, relate to, or reference terrorism, assassination, war, or an individual's death. The bill also extends the prohibition to contracts that could be construed as closely correlating to a person's death, a notably broad standard. Under current Commodity Exchange Act provisions, the CFTC already has authority to block such contracts if deemed contrary to the public interest. However, enforcement depends on the regulator's discretion, which can shift with agency leadership.
Legal and Regulatory Context
Sen. Schiff, a member of the Senate Agriculture Committee, is well-positioned to push for this legislation as the CFTC's new rulemaking process takes shape. The current legislation offers limited protection, as enforcement hinges on the regulator's judgment. Schiff's bill aims to eliminate this flexibility by providing explicit prohibitions in law.
Concerns and Justifications
Schiff emphasized the potential dangers of betting on war and death, stating, "Betting on war and death creates an environment in which insiders can profit off of classified information, our national security is jeopardized, and violence is encouraged." He further argued that there is no justification for gambling on lives, nor any public benefit derived from such markets.
Congressional Action and CFTC's New Approach
Rep. Mike Levin (D-CA) will introduce companion legislation in the U.S. House of Representatives, according to Schiff's office. This move comes as the CFTC, led by Chair Mike Selig, revisits its approach to regulating prediction markets. In February, the agency withdrew a 2024 proposal that would have broadly banned political prediction markets, with Selig criticizing the previous effort as regulatory overreach.
Conclusion
The introduction of the DEATH BETS Act marks a significant challenge to the CFTC's deregulatory agenda and underscores the importance of explicit legal protections in event trading. As the legislation moves forward, it will likely engage in a high-stakes debate over the balance between market freedom and public interest.
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