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 tied to the rescue of two airmen after an F-15E fighter jet was shot down over Iran, sparked outrage among lawmakers, including Rep. Seth Moulton, who called it 'disgusting' and argued that it turned a military rescue effort into a financial opportunity. 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, with the company reviewing how the market passed internal safeguards. The incident highlights the growing regulatory pressure on prediction markets, with a group of congressional Democrats introducing legislation to ban contracts tied to elections, war, and government actions. Separately, 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 industry is also facing scrutiny beyond politics, with the NFL asking operators to avoid offering contracts that could be manipulated or are objectionable. Despite the challenges, the market is expanding, with Kalshi securing a license to offer margin trading to institutional investors and new players entering the market, including JPMorgan, whose CEO has signaled interest in entering the sector.