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 their F-15E fighter jet was shot down over Iran, sparked outrage among lawmakers, including Rep.
Seth Moulton, who denounced it as 'disgusting' and argued that it trivialized a military rescue effort by reducing it to a financial transaction. Moulton has been a vocal critic of prediction markets, recently prohibiting his staff from using platforms like Polymarket and Kalshi due to concerns that financial incentives could influence policy decisions. A spokesperson for Polymarket stated that the listing did not meet the company's integrity standards and was removed shortly after its appearance, prompting a review of how the market evaded internal safeguards.
This incident occurs amidst rising regulatory pressure on prediction markets, with a group of congressional Democrats introducing legislation last month 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. Regulators are also asserting their authority over the sector, with the CFTC filing lawsuits against three states over efforts to bypass federal oversight of prediction markets.
The scrutiny of the industry has extended beyond politics, with the NFL requesting that operators avoid offering contracts that could be deemed objectionable or open to manipulation, including bets tied to officiating decisions or events known in advance. Nevertheless, the market continues to expand, with Kalshi securing a license to offer margin trading to institutional investors last month, and new players, including JPMorgan, entering the market.