Congress Pressures CFTC to Kill “Death Bets” After Polymarket Tests the Final Frontier of Degeneracy

Listen, I’m not saying prediction markets are gonna be the downfall of Western civilization.

But when U.S. senators start drafting letters about contracts that “incentivize physical injury or death”… can we all take a breath and admit we may have wandered into “this probably shouldn’t have a ticker symbol” territory?

Six Democratic senators just fired off a letter to the Commodity Futures Trading Commission essentially saying:

Hey… maybe we should not allow financial products that cash out when someone dies (aside from life insurance policies, of course).  And yes, this is how absurd public markets have gotten.

The group (including Adam Schiff, Richard Blumenthal, Cory Booker, Tim Kaine, Catherine Cortez Masto, and Jacky Rosen) urged CFTC Chairman Michael Selig to “categorically prohibit” any contract that resolves upon or closely correlates to an individual’s death.

Translation: if someone’s able to put a $1 million (or $1k, for the poors) payout solely based on someone not making it to their next birthday… it incentivizes some pretty malicious stuff and I’m really going out on a limb here… but maybe, just maybe, that’s not a healthy market structure.

(Source: CNBC)

Of course, the backdrop here is nothing new. Prediction markets like Polymarket and Kalshi are the biggest things since everyone jumped onto the trend of buying Bored Apes for $1 million a pop. Spoiler: that didn’t end well.

Politics. Wars. Elections. Space launches. Miss Rachel being in the Epstein Files. Days until Elon Musk’s new baby mama goes insane. You name it… someone’s probably trading it. And that’s where things get… scary.

One example cited in the letter was a Polymarket contract asking whether Artemis II (NASA’s upcoming crewed mission) would explode.

To everyone’s surprise, not only was that a real market but according to the senators, the “YES” side traded as high as 8% before public backlash forced the contract to be renamed and eventually withdrawn. 

Sure, it’s objectively strange that basement-dwelling chaos enthusiasts are trading NASA malfunction odds between Hot Pockets (that’s bad enough as it is). The real concern is the incentive structure. A tradable contract tied directly to mission failure opens the door to perverse motivations baked into the system itself… the kind of setup that belongs in a Sopranos storyline, not a regulated financial market.

Polymarket pushed back, saying the market referenced a specific hardware failure scenario… not astronaut deaths. But if your profit graph spikes when a rocket experiences “catastrophic malfunction,” we don’t need a NASA engineering degree to figure out how that story probably ends for the people strapped to the top of it.

Another case involved a contract on whether Venezuelan leader Nicolas Maduro would be removed from power. An unknown trader reportedly placed about $20,000 in bets predicting his removal… and after U.S. action led to Maduro’s capture, that position allegedly turned into more than $400,000 in profit. Talk about taking insider trading to a whole new level. Nancy and Paul Pelosi could never.

And then there was a contract tied to Russian forces capturing a Ukrainian town… a market where some “YES” bettors reportedly profited by as much as 33,000%. As in turn $1,000 into $331,000. Which again, I’ve never claimed to be the moral police… but giving traders gamblers the opportunity to profit from war probably isn’t a good idea.

The senators argue that these markets risk incentivizing real-world harm, insider profiteering, and national security vulnerabilities… especially if government officials or consultants with non-public knowledge decide to (wink, wink) “hedge their worldview.”

In court, the CFTC reminded everyone who signs the hall passes. They’re not shutting down the casino because a bunch of politicians get their panties in a wad (which is a fair rebuttal in almost every other occasion).

But that leaves us in a very weird situation. Remember, prediction markets were pitched as the future of price discovery… the wisdom of crowds, distilled into probabilities. To profit off things like CPI or how many times Jerome Powell says a word salad during a FOMC event. 

But the fact that profiting off of people losing their lives even being a topic of discussion is kinda concerning amirite? I guess it’s just a sign of how unhinged the markets are in 2026.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.