US
Senator
Chris
Murphy
has
announced
plans
to
introduce
legislation
banning
prediction
markets
he
described
as
“corrupt
and
destabilizing”
platforms.
In
a
February
27
statement,
the
Connecticut
Democrat
lawmaker
argued
that
insiders
with
advanced
knowledge
of
geopolitical
events
exploit
these
markets
for
personal
financial
gain.
Lawmaker’s
Push
to
Ban
Prediction
Markets
Draws
Industry
Fire
His
announcement
builds
on
concerns
he
voiced
earlier
this
year
regarding
thecommodification
of
real-world
tragedies.
Sponsored
Sponsored
To
illustrate
his
point,
Murphy
shared
a
screenshot
ofPolymarket
betting
odds
related
to
military
strikesinvolving
Israel
and
Gaza,
noting
that
the
odds
shifted
amid
escalating
real-world
tensions.
Update:
I'm
working
on
legislation
to
ban
corrupt
and
destabilizing
prediction
markets,
where
insiders
who
know
the
outcome
(especially
in
government)
can
rig
the
game
to
favor
certain
bets.https://t.co/3psBfodmbK
—
Chris
Murphy
🟧
(@ChrisMurphyCT)February
27,
2026
Industry
experts,
however,
say
the
senator’s
proposal
conflates
heavily
regulated
domestic
exchanges
with
offshore
platforms
that
the
United
States
has
already
barred
from
operating.
Tarek
Mansour,
co-founder
of
the
federally
regulateddomestic
prediction
market
Kalshi,directly
challenged
the
senator’s
premise.
“Senator,
regulated
prediction
markets
are
not
allowed
to
do
war
markets.
The
market
you’re
posting
is
unregulated
and
offshore,”
Mansourstated.
The
Commodity
Futures
Trading
Commission
(CFTC)strictly
prohibits
onshore
prediction
markets
from
listing
derivatives
contracts
involving
terrorism,
assassination,
or
war.
These
rules
also
extend
to
any
other
activities
deemed
contrary
to
the
public
interest.
Industry
advocates
argue
Murphy
is
using
illegal
offshore
markets
to
justify
a
blanket
ban
on
domestic
exchanges
that
already
follow
strict
regulations
to
prevent
those
scenarios.
Adam
Cochran,
a
prominent
finance
and
cryptocurrency
analyst,
echoed
Mansour’s
sentiments.
Cochran
emphasized
that
offshore
platforms
offering
services
to
US
customers
already
face
aggressive
CFTC
enforcement
actions.
Furthermore,
he
added
that
domesticprediction
markets
operate
under
rigorous
federal
oversightspecifically
designed
to
prevent
the
insider
trading
Murphy
aims
to
stop.
Meanwhile,
Murphy’s
potential
legislative
efforts
align
with
the
broader
regulatory
efforts
to
curb
insider
trading
within
the
fast-rising
prediction
market
space.
In
January,
U.S.
Rep.
Ritchie
Torres,
D-N.Y.,
introduced
a
new
bill.
The
legislation
is
a
targeted
ethics
measure
designed
to
prevent
covered
government
officials
and
elected
representatives
from
trading
in
prediction
markets
using
nonpublic
information.