‘Gruesome’ war bets fuel calls for crackdown on prediction markets. 9 hours ago. Natalie ShermanBusiness reporter. Bloomberg via Getty Images. Stew, a 35-year-old from Montana, has enjoyed dabbling in sports bets since he downloaded the Kalshi app about 18 months ago.. But just a few weeks ago, after spotting reports of elevated pizza deliveries around the Pentagon during some late-night scrolling, he made a different kind of bet – wagering $10 (£7.50) on the odds that Iran’s Ayatollah Ali Khamenei would be “out” by 1 March.. It was a trade that tested the limits of the kinds of bets Americans are allowed to make.. So-called predictions markets- overseen by firms such as Kalshi – have exploded in popularity over the last year, hosting more than $44bn in trades.. They are rapidly transforming the betting landscape in the US, where sports betting was largely illegal until 2018 and gambling on elections had been off-limits for years until 2024.. While much of the activity on the platforms revolves around sporting matches, users can speculate on any number of questions, including local elections, whether the US central bank will cut interest rates and the year of Jesus Christ’s return.. The apps caught fire during America’s 2024 presidential campaign, after a legal victory cleared the way for them to accept election bets and they showed the odds tilting toward Donald Trump.. But it is more grisly wagers tied to military action involving Iran, Venezuela and Israel that have drawn attention lately.. In theory, such bets run afoul of US financial rules, which bar trading on contracts involving war, terrorism, assassination, gaming or other illegal activities.. But that hasn’t stopped firms from taking in millions of trades.. Critics have seized on the activity, calling for a crackdown on the apps, which they say are facilitating unseemly, and potentially illegal, war profiteering, generating national security risks and enabling opportunities for insider trading and corruption.. “You have now opened up gambling basically on almost anything and it has turned into this very, very gruesome type of thing on the death of a head of state,” said Craig Holman, government affairs lobbyist at the Public Citizen advocacy group, which recently filed a complaint this week over the bets.. Polymarket alone has hosted what Bloomberg estimated as more than $500m in bets related to the Iran war, at one point offering an opportunity to play the odds on the chance of nuclear detonation.. The company, which is headquartered in New York but operates on a limited basis in the US, eventually removed that market after it drew scrutiny on social media but users can still submit bets on questions like when US forces will enter Iran. It did not respond to the BBC’s request for comment.. Kalshi also ended up cancelling the Khamenei market, which had drawn $54m in trades, noting that US-regulated entities are barred from “having a market directly settling on someone’s death”.. The c
