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Story: Democrats Target Prediction Markets After Suspicious Iran Bets

By Dan Saada

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Senator Chris Murphy dropped a bombshell on March 6. He claims people close to Donald Trump used insider knowledge to bet on when America would hit Iran, making money off…

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Murphy's accusations have Democrats scrambling to write new laws that would crack down on prediction market abuse.

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The proposed bill gets pretty aggressive.

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It would force federal agencies to watch betting activity like hawks, especially when people are wagering on military strikes or other geopolitical events.

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Prediction markets have exploded in popularity over the past few years, covering everything from who'll win the presidency to whether the Fed will cut rates.

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Analysts spotted weird betting patterns right before the military action went down. That's what got Murphy and others fired up about potential insider trading.

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Critics of Murphy's bill say it could kill innovation in the prediction market space. They argue that most people who use these platforms are playing by the rules and that…

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But Murphy isn't backing down. The bill faces a tough road ahead since it needs Republican support to pass, and GOP lawmakers haven't shown much appetite for new financial…

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Trump and his team haven't responded to Murphy's claims. The proposal is sitting in Congress waiting for more debate.

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The Commodity Futures Trading Commission jumped into the fray on March 5. A spokesperson said the agency is digging through data to find irregularities connected to the Iran…

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Elizabeth Warren joined Murphy's crusade on March 4. Warren said prediction markets can't become a new way for insiders to trade on classified information.

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Betfair, one of the biggest prediction market platforms, saw betting activity spike around the time of the alleged insider trades.

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Lobbying groups are working overtime to influence whatever legislation comes out of this mess.

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The Securities and Exchange Commission announced its own investigation on March 3. The SEC wants to know if military secrets were illegally used to make money in prediction…

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Patrick Jenkins from Market Watch thinks the whole scandal could wreck trust in prediction markets.

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