‘Fake and dangerous product’: The forecast markets’ wildest week yet

Kalshi CEO Tariq Mansour She posted a video on Wednesday of six men dressed in casual clothes doing push-ups on the sidewalk. “This is how the Kalshi Q1 board meeting ended.” books On X. Board members laugh and smile in the video after the impromptu cardio session, and the mood is cheerful. The next day, it became clear that the team had enough reason to celebrate: Calci had just raised $1 billion at a valuation of $22 billion, making the company worth on paper. Almost double What it was like just a few months ago.

The funding round represents a bright spot during one of the most turbulent weeks for the company Prediction market industry so far. In just the past five days, the state of Nevada has temporarily banned Calci by issuing a temporary restraining order and Arizona has filed Criminal charges She was accused of running an illegal gambling business; So said an Israeli journalist He received a torrent of threats From Polymarket traders angry about how his story affected their bets; Polymarket register A major deal with Major League Baseball, establishing itself in the world of professional sports; And members of the US Senate Legislation introduced To ban specific types of markets served by the industry, including any activities involving “government actions, terrorism, war, assassinations, and events in which the individual knows or controls the outcome.” It is the latest in A Invoice series It aims to put guardrails around the forecasting industry.

Senator Chris Murphy, a co-sponsor of the bill and one of the industry’s most outspoken critics, said in an interview with WIRED that prediction markets are a “fake and dangerous product” and represent “a whole new source of astonishing corruption.”

“Calci already prohibits insider trading and markets directly linked to death and war,” says Elizabeth Diana, a Calci spokesperson. “As a US-based exchange, we support regulators and policymakers on both sides of the aisle in their efforts to keep these markets safe and responsible in America.” Polymarket did not respond to requests for comment.

Current law gives the Commodity Futures Trading Commission, the agency that oversees prediction markets, the authority to ban offers related to assassinations, war, terrorism, and other topics deemed contrary to the public interest. Some prediction markets are already moving away from these categories. But not all of their users understand exactly where the created lines are drawn Chaotic situation When some assumed that the market over the fate of Iran’s Supreme Leader would trigger compensation if he “left office” by killing him.

Meanwhile, Polymarket, which operates largely outside the US, offers many war markets – but legislation is unlikely to impact these offerings. The platform currently offers a market on whether Israeli Prime Minister Benjamin Netanyahu will “exit” on certain dates; someone recently Bet Polymarket will likely push the market to “yes” and allow its bettors to profit if Netanyahu dies, just as it did when Khamenei was killed.

One reason Senator Murphy is so passionate about prediction markets is that he sees them as vectors for insider trading. The Israeli government, for example. He was accused Two of its citizens leaked confidential information by placing Polmarket bets related to the war in Iran. The Connecticut lawmaker suspects that other deals related to the conflict may have been carried out by members of Trump’s inner circle with advanced knowledge of military operations. “It is horrifying to think that there are employees inside the operating room pushing the United States into war, not because it is good for our security, but because they will make $100,000 from it,” he says.