Sen. Chris Murphy of Connecticut reposted on social platform X Saturday (Feb. 28) a post that speculated that insiders may have made money on a prediction market based on the timing of the strike on Iran.
“I’m introducing legislation ASAP to ban this,” Murphy said in his post.
Earlier, before the strikes on Iran, Murphy reposted on Friday (Feb. 27) his post on X from Jan. 14 in which he shared an image about a prediction market on whether Israel will strike Gaza and said, “I want to talk about a dystopian world we are entering—where every moment, event and crisis just become commodities.”
Commenting in his repost, Murphy said: “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.”
Rep. Mike Levin of California said in a Saturday (Feb. 28) post on X that an account on Polymarket made $515,000 with trades placed on the U.S. strike on Iran.
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“Prediction markets cannot be a vehicle for profiting off advance knowledge of military action,” Levin said in the post. “We need answers, transparency and oversight.”
Kalshi co-founder and CEO Tarek Mansour said in a reply to Murphy’s Feb. 27 post on X: “Senator, regulated prediction markets are not allowed to do war markets. The market you’re posting is unregulated and offshore.”
CNBC flagged these posts in a Monday (March 2) report and said that after the U.S. strikes on Iran, the scrutiny of prediction markets has centered both on ethical concerns and the potential for insider trading.
PYMNTS reported Monday that prediction markets are facing another challenge in the form of a group campaigning for these platforms to be covered by state gambling laws.
The group, Gambling Is Not Investing, is headed by Mick Mulvaney, a former congressman and acting chief of staff for the first President Donald Trump White House.
On Wednesday (Feb. 25), Kalshi announced it had closed two insider trading cases by imposing a ban or suspension and a financial penalty as well as reporting them to the Commodity Futures Trading Commission.
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