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Several US senators are urging federal regulators to crack down on prediction markets that allow users to trade contracts tied to human deaths, arguing that such products are unethical and potentially harmful.
Lawmakers seek “death contract” ban
In a letter sent to the CFTC, a group of Democratic lawmakers called on the agency to halt “event contracts” centered on whether a specific individual will die within a certain timeframe. The senators argue that allowing financial speculation on death crosses a moral line and could create incentives that conflict with public safety.
The concern focuses primarily on contracts listed through federally regulated prediction market platforms. These markets function similarly to other event contracts: Users buy and sell positions based on the probability of an outcome—in this case, a person’s death.
Lawmakers noted that such contracts are fundamentally different from political or economic forecasts. In their view, markets tied to mortality risk commodify tragedy and could encourage harassment, misinformation or worse. They also argue that these markets may undermine public trust in the broader prediction market industry.
Democratic Senators appeal to CFTC oversight
The letter asks the CFTC to use its authority under the Commodity Exchange Act to determine that death-based contracts are contrary to the public interest. The agency already possesses the authority to block event contracts involving gaming, terrorism or activities deemed unlawful. Senators are now pushing to include mortality-based contracts under those same restrictions.
Prediction market operators have generally defended their platforms as neutral tools that aggregate information through price signals. Supporters argue that markets can reflect real-world probabilities without encouraging harmful behavior. However, death-based contracts have drawn bipartisan discomfort in the past, particularly when tied to public figures.
Platform self-regulation and trader backlash
The issue adds scrutiny to the rapidly growing prediction market sector. As platforms expand beyond elections and economic indicators into more controversial territory, regulators are under pressure to define clearer boundaries for acceptable contracts.
Some platforms have already begun self-regulating. Following the death of Iranian Supreme Leader Ali Khamenei, “out of office” contracts were closed on Polymarket and Kalshi. The move sparked frustration among traders regarding how the trades were settled; Kalshi paused the market and refunded participants rather than paying out “yes” contracts.
Kalshi spokeswoman Elisabeth Diana defended the move, stating the company “included every precaution on this market to make sure people could not trade on the outcome of death.” (The senators’ letter was sent prior to the attack in Iran.)
Balancing innovation and ethics
As reported by Legal Sports Report, the CFTC has not yet announced formal action in response to the senators’ letter. Any move to restrict mortality-based markets could set a precedent for how far prediction platforms can go in listing sensitive or ethically charged event contracts.
At stake is more than a single category of contracts; it is a broader debate about whether prediction markets should have limits and, if so, who decides where those limits lie.
