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 widely condemned by lawmakers, including Rep. Seth Moulton, had permitted users to wager on the timing of the rescue of two airmen after their F-15E fighter jet was shot down over Iran.
The airmen have since been rescued. Moulton had previously expressed strong opposition to prediction markets, banning his staff from using platforms like Polymarket and Kalshi due to concerns that financial incentives could impact policy decisions. A spokesperson for Polymarket stated that the market 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 comes at a time when prediction markets are facing increasing regulatory pressure in Washington. A group of congressional Democrats recently introduced legislation that would prohibit contracts related to elections, war, and government actions.
Additionally, several senators have urged the Commodity Futures Trading Commission to ban 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 considered objectionable or open to manipulation.
Despite this, the market continues to expand, with Kalshi recently securing a license to offer margin trading to institutional investors and new players, including JPMorgan, entering the market.