Prediction Market Trading Surges Amid US-Iran Conflict

Prediction market trading experienced a significant increase in activity related to US-Iran conflict contracts, resulting in a weekly notional volume of $2.49 billion on Polymarket and $2.85 billion on Kalshi for the week ending Monday, March 9. According to NS3.AI, the Commodity Futures Trading Commission (CFTC) issued a staff advisory classifying event contracts as a "financial asset class" and initiated an Advanced Notice of Proposed Rulemaking to explore the application of the Commodity Exchange Act to prediction markets. In response to these developments, Senator Adam Schiff introduced the DEATH BETS Act, aiming to prohibit federally regulated contracts linked to war, terrorism, assassination, and individual deaths. The total notional volume across prediction markets reached $145 billion, engaging 2.8 million unique users.