What Is the BETS OFF Act?

The BETS OFF Act is a bipartisan bill introduced in the U.S. Congress in March 2026 that would prohibit prediction market contracts on government actions, terrorism, war, assassination, and events where an individual knows or controls the outcome. It represents one of several legislative efforts to place guardrails around the rapidly growing prediction market industry.

Key Provisions

The bill, co-sponsored by Senator Chris Murphy, targets specific categories of prediction market contracts:

• Government actions — contracts that bet on policy decisions, executive orders, or regulatory outcomes
• Terrorism — markets related to terrorist attacks or threats
• War — contracts tied to military operations, strikes, or armed conflicts
• Assassination — markets related to the death or removal of political leaders
• Controlled outcomes — contracts where a participant knows or controls the result (insider trading vector)

Senator Murphy described prediction markets as "a rigged and dangerous product" and "a brand-new source of mind-bending corruption."

Why It Was Introduced

The BETS OFF Act emerged during one of the most turbulent weeks in prediction market history (mid-March 2026), triggered by several concurrent events:

Journalist Death Threats

An Israeli journalist from The Times of Israel received death threats from Polymarket traders who wanted him to change his reporting about an Iranian missile strike. Over $14 million was riding on the contract's resolution, and traders pressured the journalist — including threats of violence — to alter details that would affect their positions.

War Profiteering Concerns

Polymarket hosted markets on the Iran-Israel conflict, including contracts on military strikes and the fate of Iran's supreme leader. Critics argued these markets created financial incentives for people with knowledge of military operations, raising national security concerns.

Arizona Criminal Charges

Arizona's attorney general filed the first-ever criminal charges against Kalshi, alleging it operated an illegal gambling business — escalating the legal battle between states and prediction market companies.

Insider Trading Cases

OpenAI fired an employee for alleged prediction market insider trading, and Polymarket traders appeared to profit from advance knowledge of geopolitical events, including the capture of Venezuela's Maduro and the killing of Iran's supreme leader.

The Regulatory Landscape

The BETS OFF Act is one of several bills targeting prediction markets in 2026:

• Senator Adam Schiff pushed legislation to ban prediction market bets tied to war and death
• Multiple states have filed civil and criminal legal challenges against Kalshi and Polymarket
• A coalition called "Gambling Not Investing" was launched by a former Trump official to advocate for consumer protections

Meanwhile, the CFTC already has existing authority to ban contracts related to assassination, war, and terrorism under the Commodity Exchange Act. However, critics argue the agency has not adequately exercised this authority under the current administration.

Kalshi's response: the company stated it "already bans insider trading and markets directly tied to death and war" and supports "regulators and policymakers from both sides of the aisle in their efforts to keep these markets safe and responsible."

What This Means for iGaming Operators

Clarity on Permissible Contract Types

If passed, the BETS OFF Act would create clear boundaries on what types of prediction markets can be offered. This actually benefits operators by reducing regulatory uncertainty — operators can build products around contract categories that are explicitly permitted.

Sports and Entertainment Markets Are Safe

The bill targets government, military, and insider-controlled markets — not sports, entertainment, or economic prediction markets. This signals that sports-adjacent prediction markets (the most relevant category for iGaming operators) are unlikely to face legislative prohibition.

The Regulatory Environment Is Actively Evolving

Operators should not assume the current permissive CFTC stance will persist indefinitely. Legislation like the BETS OFF Act, combined with state-level enforcement actions, suggests that prediction market regulation will tighten in some areas while remaining open in others.

Responsible Product Design Is Differentiation

Operators who proactively avoid controversial contract categories (war, assassination, government manipulation) will be better positioned when regulations tighten. Building a prediction market product focused on sports, entertainment, and economics — with robust integrity frameworks — is both the safest and most commercially viable approach.

Frequently Asked Questions

Has the BETS OFF Act passed?

No. As of March 2026, the BETS OFF Act has been introduced in Congress but has not yet been voted on or signed into law.

Would the BETS OFF Act ban all prediction markets?

No. It targets specific categories — government actions, terrorism, war, assassination, and insider-controlled events. Sports, entertainment, economic, and other prediction market categories would not be affected by this legislation.

Does the CFTC already have authority to ban these market types?

Yes. The Commodity Exchange Act gives the CFTC authority to prohibit contracts deemed contrary to the public interest, including those related to assassination, war, and terrorism. The BETS OFF Act would make these prohibitions explicit in statute rather than leaving them to agency discretion.

How does this affect Polymarket and Kalshi?

If passed, both companies would need to remove any contracts falling under the prohibited categories. Polymarket, which operates partially outside the U.S., may face enforcement challenges. Kalshi has stated it already avoids markets "directly tied to death and war."

Should iGaming operators be concerned about this legislation?

For operators focused on sports, entertainment, and economics-based prediction markets, the BETS OFF Act is unlikely to impact their product roadmap. It may even be beneficial by reducing the controversial reputation of prediction markets and focusing the industry on commercially viable, mainstream categories.