Should users be allowed to bet on war and death in prediction markets?

Prediction markets are sold as a way to harness the wisdom of crowds to more accurately forecast the future. 

But when it comes to the Iran war, winning cryptocurrency for correctly predicting outcomes that see civilians bombed and their homes destroyed makes some people concerned — and others very angry. 

Case in point: earlier this week, Democrat congressman Seth Moulton forced Polymarket to pull markets that bet on when the US would confirm the rescue of Air Force service members shot down by Iran.

“They could be your neighbor, a friend, a family member. And people are betting on whether or not they’ll be saved. This is DISGUSTING,” he said. 

He described Polymarket as a “dystopian death market.” The platform backed down in the face of the controversy. It apologized and withdrew the market because it did not meet the company’s usual high standards — which incidentally include betting on whether Jesus Christ’s second coming will occur before December.

“It should not have been posted, and we are investigating how this slipped through our internal safeguards,” the company said.

University of New South Wales international law and relations researcher Karoline Thomsen argues that betting on outcomes that result in human misery is an ethical minefield.  

“I think it’s an entirely different kettle of fish to bet on a footy game than it is to bet on war,” she says. 

“There’s a very obvious moral problem that you are directly benefiting from other people’s suffering and other people’s lives being lost.”

She says that war-related markets also risk tipping off targeted countries.

Polymarket trader Magamyman bet big around 71 minutes before the strikes on Iran became public. They made over $195,000, and another $123,000 wagering Ayatollah Ali Khamenei would be ousted from power.

“Then there is also the whole security question,” says Thomsen. “If you are placing a lot of bets on these strikes going to happen you are also signaling to the countries that you might be striking that ‘hey this is something that’s going to happen.”

Thomsen notes that Polymarket allegedly sells its data to the highest bidder. It’s not clear who buys this information, but there’s always the possibility it may end up in the wrong hands.

Polymarket declined to comment for this story.

Kalshi says death and war are not appropriate markets

Kalshi’s head of communications Elisabeth Diana tells Magazine that the platform’s policies are stricter than Polymarket’s when it comes to bets on the Iran war. 

“We don’t allow markets on war or death — directly tied to death or war or assassination,” she explains. “We don’t want to create perverse incentives so we don’t have those markets. And that is unlike our competitors.”

Kalshi does offer markets less directly tied to the war, relating to questions on reopening the Strait of Hormuz, whether Reza Pahlavi will become leader, or if Iran will transform into a democracy.

But Diana says that enabling bets on outcomes where people could directly get hurt inadvertently creates a financial incentive to bring about that outcome.

“Let’s say like wildfire markets. We don’t allow those because let’s say you traded on a wildfire market. And you said there’s going to be a wildfire in California, well, you could start that wildfire.”

“Death, war, assassination, wildfires, anything related to war and violence and crime — we don’t allow those,” she reiterated.

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Bets can give rise to perceptions of a conflict of interests

Betting markets can also convey an impression of corruption, as we saw in February when there was speculation White House Press Secretary Karoline Leavitt cut a press conference short due to a market wagering on its length. And this week, numerous posters on X suggested that President Trump’s Easter message, “Praise be to Allah,” was related to bets on Polymarket about “will Trump praise Allah on Easter.”

This was not a real market, however. Trump was just being Trump.

Throughout 2025, Polymarket also allowed a market on whether there would be a “Nuclear weapon detonation in 2025?” The odds were around 15% to 20%, but obviously narrowed as December approached.

But when the Iran war heated up, and ‘World War 3’ began trending, the 2026 Nukes market caused a big stink. Polymarket kicked things off with a since-deleted post highlighting the 22% chance of a nuclear detonation in 2026.

Among many social media users who were outraged, Lever News founder David Sirota posted his opinion that the market monetizes a nuclear attack “amid increasing concerns that bets are happening among government insiders who can make military decisions.” Mint Press News journalist Alan MacLeod claimed Polymarket is “literally a threat to the survival of the planet.”

The market had only seen $838,000 in trading volume, and it’s hard to imagine anyone risking the fate of all life on Earth to win a few bucks, but Polymarket retired the market.

While it seems unsavory to bet on such things, you could equally make the argument that a prediction market showing an increased risk of a nuclear exchange could incentivize diplomats and politicians to redouble efforts to avoid one.

“It could,” agrees Diana, carefully. “I think we just see it as something that we don’t want to get involved in because we think it creates bad incentives. So if there is any chance of bad incentives, we’re going to stay out of it.”

Thomsen says it’s an open question as to how useful a prediction market in a nuclear detonation would be. If the market surfaced inside information, it might be more accurate, but would also be unethical and unlawful. But if it was just the best guess of a bunch of crypto degens having fun, it might not be useful at all.

“It kind of goes back to how much do you believe in the group wisdom of people and an aggregated information score,” says Thomsen. “And what is this group of people?”

Kalshi controversy over Khamenei

Kalshi, meanwhile, got itself in hot water after the Ayatollah was assassinated on the first day of the war. Kalshi had posted on March 1 that the odds of Khamenei being “out as Supreme Leader” by September 1 had risen to 68%.

While some outsiders criticized the market’s existence, the real furore came from Kalshi betters who were outraged they would not receive the $54 million they believed they’d won.

Diana says that Kalshi doesn’t resolve markets upon death, but concedes many users were not aware of the fine print. If the Ayatollah died, “the market would resolve to the last traded price. So whatever the price was then, that’s how people would get paid out,” she says.

Their March 1 promotional tweet backs this up, and clearly stated: “Reminder: Kalshi does not offer markets that settle on death.

“If Ali Khamenei dies, the market will resolve based on the last traded price prior to confirmed reporting of death.”

Diana says Kalshi has now gone out of its way to highlight the rule on similar markets. 

“I think we could have done a better job of making the rules more prominent. So now when you go to markets like that, you’ll see there’s a green box that clearly explains the rules.

So people understand them better. But I think that was a case where people didn’t know that we didn’t allow war markets, right? Whereas I think with Polymarket, they did allow them.”