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 removed after backlash from lawmakers, had enabled users to wager on the timing of the US confirmation of the rescue of two airmen after an F-15E fighter jet was shot down over Iran.
The crew members have since been rescued. Representative Seth Moulton, a Democrat from Massachusetts, denounced the listing as 'disgusting' and argued that it reduced a military rescue effort to a financial transaction.
Moulton has been a vocal critic of prediction markets, recently banning his staff from using platforms like Polymarket and Kalshi due to 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 company is currently reviewing how the market passed internal safeguards. This incident occurs as prediction markets face increasing regulatory pressure in Washington.
A group of congressional Democrats introduced legislation last month that would prohibit contracts tied 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 it believes attempt to bypass federal oversight of prediction markets. The scrutiny of the industry has expanded beyond politics, with the NFL asking operators to avoid offering contracts it views as objectionable or open to manipulation, including bets tied to officiating decisions or events known in advance.
Nevertheless, the market is continuing to grow, with Kalshi securing a license to offer margin trading to institutional investors last month, and new players entering the market, including JPMorgan, whose CEO, Jamie Dimon, has indicated that the company is looking to enter the market.