Following intense criticism from lawmakers, 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 over Iran, sparked outrage and was deemed to have fallen short of the company's integrity standards. Representative Seth Moulton, a Democrat from Massachusetts, was among those who denounced the listing, 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, having recently banned his staff from using platforms like Polymarket and Kalshi due to concerns that financial incentives could influence policy decisions.
The incident highlights the growing regulatory pressure on prediction markets, with 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 efforts to bypass federal oversight of prediction markets. The NFL has also asked operators to avoid offering contracts that could be deemed objectionable or open to manipulation. Despite the increased scrutiny, the market is continuing to expand, with Kalshi recently securing a license to offer margin trading to institutional investors and new players, including JPMorgan, entering the market.