Watching the Middle East be drawn deeper and deeper into a conflict that the United States seems to have started based on vibes is terrible, but what if we made it terrible and dystopian by letting people bet on it?
Prediction markets are going gangbusters over the Iran war, with over $500 million sloshing around on Polymarket over the weekend as the bombs began to fall.
“Bombing” by Nick Anderson
One lucky little ducky, “Magamyman” (sigh), seemed to have some pretty detailed insider information—not just that we were going to attack Iran and when, but also that we were planning on killing Supreme Leader Ayatollah Ali Khamenei. For their efforts, they netted $553,000 on Polymarket.
We also saw this play out in January when the United States went into Venezuela to abduct President Nicolás Maduro. There, an anonymous, well-sourced person had a little tip-off that it was about to happen, and a very timely $32,500 bet was parlayed into over $436,000.
Both Polymarket and Kalshi, the two leading platforms, took a ton of heat for letting people bet on literal death. The head of Kalshi, Tarek Mansour, trotted over to X to explain that gosh, sure, they were letting people bet on war, but heavens no, not on death: “We don’t list markets directly tied to death. When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death. That is what we did here.”
This is, of course, nonsense and a distinction without a difference. If you’re letting people bet on when a war is starting, who will attack whom, and whether a leader will be removed and when, you’re inherently letting them bet on death.
A woman mourns the death of Iranian Supreme Leader Ayatollah Ali Khamenei, during a gathering in the southern Suburb of Beirut, Lebanon, on March 1.
People didn’t just independently decide that betting on the Iran war might be funsies. Both Polymarket and Kalshi heavily promoted this. Kalshi gave users the chance to wager on whether Khamenei would be “out as Supreme Leader,” with Mansour pimping it on his X account. Polymarket did as well, putting it at the top of its website and allowing people to bet on things like the date we would strike Iran.
Polymarket continues to offer robust betting chances on the Iran war, and its official account on X is keeping bettors apprised, apparently, that the administration is not calling the Iran attack a war, but has settled on “combat operations.”
It’s no surprise that the Trump administration absolutely loves prediction markets, so much so that it looks like they will force states to let these nightmares operate even if they otherwise have laws banning this sort of gambling. How? By just saying it isn’t gambling.
Prediction markets, despite the name, are not really markets. They’re just largely unregulated platforms for betting. But it looks like the administration is going to say that prediction markets are actually commodities and futures markets, which means the CFTC can ban states from regulating them.
Michael Selig, who Trump tapped to run the CFTC, made this pretty clear in a recent op-ed in the Wall Street Journal, saying that “The CFTC will no longer sit idly by while overzealous state governments undermine the agency's exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products.”
Exciting!
These markets are so out of hand that Mick Mulvaney, a former Trump administration official and enthusiastic backer of sports betting, is one of the people leading the charge for prediction markets to be regulated under state gambling laws instead of pretending it is “investing.”
Just as it’s no surprise that the Trump administration will let these things become the Wild West of betting, it's also no surprise that Trump and his family stand to personally profit from the explosion of prediction markets. Donald Trump Jr. is an investor in Polymarket and a paid adviser to Kalshi. Oh, and the Trump family is going to start its own prediction market, Truth Predict.
So, the company run by the president’s family is going to run a prediction market where people can bet on actions taken by the president. Sure, terrific, why not.
These markets are a scourge, a dangerously unregulated mess that encourages the very worst behavior. Betting on the actions and outcomes of a literal actual war is as dystopian as it gets. But hey—at least the Trump family will get even richer, which is all that really matters to Trump.
