Democrats press Selig on CFTC oversight of offshore prediction market war bets

House Democrats, led by Reps. Seth Moulton and Jim McGovern, have written to CFTC Chair Michael Selig, urging the agency to crack down on offshore prediction markets that permit users to bet on sensitive events, including U.S. military operations. This action was prompted by the circulation of contracts tied to the rescue of American airmen in Iran over the weekend. The lawmakers expressed deep concern about turning war into a gambling opportunity, emphasizing that these are not harmless wagers. Prediction market platforms like Kalshi and Polymarket have gained popularity, allowing trades on real-world outcomes. Concerns about insider trading have been raised previously. Polymarket stated it removed the specific market related to the airmen's rescue and is investigating how it was posted. The CFTC has asserted jurisdiction over prediction markets and is developing rules, with an internal rule prohibiting contracts related to terrorism, assassination, war, or unlawful activities. Democrats are questioning the CFTC's inaction and its authority to regulate such activities, requesting a response by April 15.

(Source：The Block)