The Democrats' move toward prediction markets is becoming a serious issue. A new legislative draft is about to be introduced to prevent government officials from betting on events whose outcomes they can predict, such as military operations. Known as the BETS OFF bill, this proposal primarily aims to ban insider trading in prediction markets.

Recently, reports have emerged of large bets being placed on prediction market accounts just before U.S. operations in Venezuela and Iran. Democrats are standing against this. Figures like Chris Murphy and Greg Casar are taking the lead, and the bill covers all kinds of events, including war, terrorism, assassinations, and even surprises by singers or winners of award shows during the Super Bowl halftime. In other words, not only military operations but even a singer’s announcement of their name is considered within this scope.

Platforms like Kalshi have already started imposing internal discipline. A political candidate was fined for placing bets despite knowing the outcome of their gubernatorial race. But that doesn’t seem to be enough. Lawmakers believe it’s necessary to systematically prevent such manipulations.

On one side, CFTC Chairman Mike Selig, appointed by Trump, defends the potential of prediction markets. On the other, Democrats point to the risks of insider trading. For those who remember a similar bill introduced by Ritchie Torres in January, this time Adam Schiff has proposed a bill to ban bets directly related to war.

An important point: Although Republicans still hold the majority in Congress, Democrats are counting on a change in the situation after the midterm elections. If they control committee chairmanships, the chances of these bills being discussed will increase. While the likelihood of these legislative proposals passing seems low at the moment, it signals increasing regulatory pressure on the industry.