Nearly $700 million in bets on Iran conflict raise Washington's alert, predicting market faces a new wave of regulatory storms

As valuations of prediction platforms like Polymarket and Kalshi soar to about $20 billion, Wall Street is closely watching this emerging sector.

However, the massive bets surrounding the Iran conflict and some suspicious trading behaviors are prompting Washington to accelerate the development of relevant regulatory rules.

Analysts believe that the emergence of Iran-related contracts has transformed prediction markets from a unique forecasting tool into a sensitive topic involving insider information and war incentives.

According to foreign media reports, bets related to the timing of attacks amount to approximately $529 million, while bets related to Iran's top leader reach about $150 million.

More notably, six accounts profited about $1.2 million from these contracts, and these funds were injected just hours before Iran's leader was attacked and killed.

In this context, policymakers currently face a dilemma: either establish strict monitoring systems to recognize the legal status of prediction markets; or completely ban high-risk contracts involving war, assassination, and other sensitive topics to prevent state actions from becoming trading chips.

Facing potential risks, Washington is taking a two-pronged approach. Congress is drafting legislation to define contract boundaries and establish a clear legal framework for prediction markets; meanwhile, the CFTC has submitted a pre-notice to the White House for rulemaking to accelerate the implementation of regulatory policies.

Amid increasing regulatory pressure, Kalshi is also embroiled in a trust crisis. The company faces class-action lawsuits for refusing to pay out bets related to the death of Iran's top leader, accused of using death exemption clauses to evade payment obligations.

This uncertainty in rules, combined with the risks of insider trading, further intensifies the conflicts of interest and policy battles among investors, users, and regulators.

Overall, prediction markets can no longer retreat into their once niche status. As they accelerate integration into the mainstream financial system, balancing business innovation with national security will become the core issue for regulatory policy implementation in 2026.

#预测市场 #Insider trading