Can you bet on war? What prediction markets may list on world events

The Commodity Exchange Act lets the CFTC decide that an event contract is contrary to the public interest if it involves unlawful activity, terrorism, assassination, war, gaming or “other similar activity” — and a contract it rejects may not be listed.

The CFTC’s own rule, 17 CFR 40.11, goes further than the statute. It says a registered exchange “shall not list for trading or accept for clearing” any contract that “involves, relates to, or references terrorism, assassination, war, gaming, or an activity that is unlawful under any State or Federal law”. That is a flat ban, and it applies to every CFTC-designated exchange: Kalshi, Polymarket US and the rest. The CFTC can also put a newly listed contract under a 90-day review and ask the exchange to suspend it meanwhile.

A March 2026 CFTC staff advisory reminded exchanges of the same categories.

The clearest reading comes from the court case that opened US election markets. In September 2024 a federal judge ruled for Kalshi over the CFTC’s ban on its contracts about control of Congress: “Kalshi’s contracts do not involve unlawful activity or gaming. They involve elections, which are neither.” The opinion added that a contract involves war, terrorism or assassination only if its subject relates to them, and gave as examples “whether there will be a war in X country”, weapons trades or military deployments. The CFTC later dropped its appeal.

• Kalshi says plainly: “Violent markets, including war and kidnapping, are banned on Kalshi”, naming war, death, nuclear war, assassination, missile strike and similar markets. What it does list on world events is diplomacy and politics abroad — whether two countries agree a deal, whether two leaders meet, who will lead a country, foreign elections. On 30 October 2026 we found no open ceasefire, strike or invasion markets among its roughly 8,200 open events.
• PredictIt operates under a CFTC no-action letter whose 2025 amendment restricts it to political events “not involving war, terrorism, or assassination”; international agreements not involving war are allowed.
• Polymarket US, a CFTC-designated exchange since July 2025, is bound by the same rule; its site showed no geopolitics category on 30 October 2026.
• The international Polymarket (polymarket.com) says in its footer that it “is not regulated by the CFTC”. It lists war and military markets — on a US invasion of Iran, a Chinese invasion of Taiwan, NATO–Russia clashes, ceasefires — and its documentation says geopolitical markets carry no trading fee. Its geoblocking rules make the US close-only: US users cannot open new positions there.

The case for the ban is not only taste. Someone who knows about a military operation in advance can trade on it, and a market that pays out on violence could, in principle, reward someone for causing it. In April 2026 the CFTC charged a US Army service member with insider trading on Polymarket.com using classified information about US operations to capture Nicolás Maduro — the first insider-trading charge the CFTC has brought over event contracts. Those are charges, not findings. How insider trading in prediction markets is policed is in insider trading in prediction markets.

The CFTC has changed course twice this year. In February 2026 it withdrew a 2024 proposal that would have made all five categories off-limits by definition. In March it asked for public comment on prediction markets, including whether every military action counts as war; about 3,500 comments came in.

Its June 2026 proposal would replace the flat ban with a case-by-case decision — the statute, it says, “does not authorize the Commission to impose a per se prohibition”. Its own examples show where the line would fall: a contract on a Russian strike on Kyiv, or on Chinese military action against Taiwan, involves war; a contract on Brent crude rising above $120 does not. A contract on a leader losing an election involves none of the categories; one on that leader dying in an attack involves assassination. Comments closed in July, and no final rule had been published by 29 October 2026. Until one is, the “shall not list” rule stands.

Whether prediction markets are legal where you live is a separate question: see are prediction markets legal in the US? and our regulation tracker.