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 deemed 'disgusting' by Rep. Seth Moulton, had enabled users to wager on the timing of the US confirmation of the rescue of two airmen after their F-15E fighter jet was shot down over Iran.
The crew members were later rescued. Moulton, who has been vocal about his concerns over prediction markets, had recently prohibited 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.
The company is currently reviewing how the market managed to pass its internal safeguards. This incident occurs as prediction markets face growing regulatory pressure in Washington.
A group of congressional Democrats has introduced legislation to ban contracts tied 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. Despite this, the market continues to expand, with Kalshi securing a license to offer margin trading to institutional investors and new players, including JPMorgan, entering the market.