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, with Rep.
Seth Moulton calling it 'disgusting' and arguing that it turned a military rescue effort into a financial transaction. Moulton, who has been a vocal critic of prediction markets, has banned his staff from using platforms like Polymarket and Kalshi, citing concerns that financial incentives could influence policy decisions. A Polymarket spokesperson stated that the listing did not meet the company's integrity standards and was removed shortly after it appeared. The incident highlights the growing regulatory pressure on prediction markets, with a group of congressional Democrats recently introducing 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. The CFTC has also filed lawsuits against three states over efforts to bypass federal oversight of prediction markets. Meanwhile, the NFL has asked operators to avoid offering contracts that could be deemed objectionable or open to manipulation. Despite the scrutiny, the market is still expanding, with Kalshi securing a license to offer margin trading to institutional investors and new players, including JPMorgan, entering the market.