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, sparked outrage among lawmakers, with Rep. Seth Moulton calling it 'disgusting' and arguing 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 over the potential influence of financial incentives on policy decisions.
A Polymarket spokesperson stated that the market did not meet the company's integrity standards and was removed shortly after its appearance, with the company reviewing how it passed internal safeguards. This incident comes as prediction markets face growing pressure in Washington, with a group of congressional Democrats introducing legislation to ban contracts related 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 NFL has also asked operators to avoid offering contracts that could be seen as objectionable or open to manipulation.
Despite the scrutiny, 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.