Following intense criticism, Polymarket has taken down a market that allowed users to bet on the rescue of US service members in Iran. The market, which was tied to the rescue of two airmen after an F-15E fighter jet was shot down, sparked outrage among lawmakers, with Rep. Seth Moulton calling it 'disgusting' and arguing that it reduced a military rescue effort to a financial transaction.
Moulton has been a vocal critic of prediction markets, recently banning his staff from using platforms like Polymarket and Kalshi due to concerns over the potential influence of financial incentives on policy decisions. A Polymarket spokesperson stated that the market did not meet the company's integrity standards and was removed shortly after its appearance. The incident has highlighted the growing regulatory pressure on prediction markets, with a group of congressional Democrats introducing legislation to ban contracts related to elections, war, and government actions.
Additionally, several senators have urged the Commodity Futures Trading Commission to prohibit markets linked to individual deaths, citing national security concerns. The CFTC has also filed lawsuits against three states over attempts to bypass federal oversight of prediction markets. While the industry faces increased scrutiny, it continues to expand, with Kalshi securing a license to offer margin trading to institutional investors and new players, including JPMorgan, entering the market.