Polymarket, a popular prediction market site, has taken down a forum linked to a US military rescue mission amid a political backlash. Democratic Congressman Seth Moulton criticized the platform for hosting a site that allowed users to bet money on when the US would officially confirm the rescue of two airmen after a US F-15E jet was shot down over Iran.
US and Iranian military forces are searching for a missing US airman after his F-15E fighter jet was shot down over Iran on Friday. One crew member was rescued, but another is unaccounted for.
In a post on X, Moulton described the site as “disgusting”. “It could be your neighbor, friend, family member,” Moulton wrote Friday. “And people are betting on whether they will be saved or not.
In its response, Polymarket said: “We have removed this marketplace immediately as it does not meet our integrity standards. It should not have been published and we are investigating how it slipped through our internal safeguards.”
In a separate post, X Polymarket said it “does not make money or charge any fees in any geopolitical markets.”
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What is a prediction market and how do they work?
A prediction market is an exchange-based platform where participants trade contracts speculating on the outcome of future events such as corporate earnings, currency movements, election results, etc.
As Xcritical explains, on these exchanges, traders buy and sell stocks based on their expectations of how these events will play out. Now stock prices fluctuate as participants react to changing sentiment and collective beliefs about the most likely outcome. Those who bet correctly make money.
Currently, platforms such as Polymarket and Kalshi allow participants to bet based on the outcome of geopolitical events, notes Cfr. For example, such market predictions include a 25% chance of a ceasefire in Ukraine by 2026, 6% chance of China invading Taiwan in 2025. There was also a bet on Ayatollah Ali Khamenei, where 19% of participants put money on the fact that Iran’s supreme leader’s term will end in 2025.
The report also states that “Bettors have wagered more than $1 billion on the 2024 outcome in the United States (U.S.) the presidential election itself.”
Speaking of such bets, Moulton said in an emailed response to CNBC: “Polymarket didn’t take down this market because it violated their standards. They took it down because we recalled them.”
Moulton also said that the Commodity Futures Trading Commission (CFTC) has the power to regulate prediction market platforms but is doing nothing.
“That has to change, too,” he said. “Yesterday there were 219 active bets in Polymarket’s ‘war’ category. Today there are 223. This is spreading and Congress needs to act.”
Moulton noted that Donald Trump Jr. are active participants in such deals, and said on X that Donald Trump Jr., son of President Donald Trump, “is an investor in this dystopian death market and may have access to intelligence that is not yet public.”
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Regulatory frameworks relating to prediction markets in the US
Once popular in the 1920s, prediction markets have been considered taboo and largely banned in the US for the past two decades. However, after a long legal battle, platforms like Polymarket and Kalshi won approval to operate again as the CFTC decided to take a more permissive stance and allow certain types of contracts for events and sports.
A group of Democratic lawmakers in Congress introduced legislation late last month that seeks to ban prediction markets from offering bets on elections, military conflicts and government actions, in addition to sports-related outcomes.
In February, six Democratic senators also called on the Commodity Futures Trading Commission to make clear that contracts tied to the death of an individual would not be allowed. Lawmakers warned that such offers could pose “serious national security risks.”
