TKO Group Holdings and Polymarket signs on the floor of the New York Stock Exchange (NYSE) on Thursday, November 13, 2025 in New York, USA.
Michael Nagle | Bloomberg | Getty Images
The Iran war has shined a light on what prediction markets deem unacceptable to bet on, as users faced backlash when they placed hundreds of millions of dollars in bets on everything from missile attacks to regime change.
Polymarket last week archived a market that allowed bets on the timing of a nuclear explosion after the deal raised hundreds of thousands of dollars.
Most of the contracts fell into the market titled “Will a nuclear weapon explode?” According to a web page stored in the Internet Archive’s Wayback Machine, users could bet on whether the event would occur by a certain date.
The closure of the nuclear-related market comes hours after the company reportedly posted odds on X indicating an approximately 22% chance of detonation by the end of the year, which have since been removed.
online protest
The bet sparked a backlash online and comes as some manufacturers propose increased regulation and oversight of the burgeoning prediction industry, which allows users to bet on the outcome of a wide range of events.
Polymarket did not disclose the reason for the deletion. He did not immediately respond to a request for comment from CNBC.
Last weekend, the company’s founder and CEO, Shayne Coplan, was asked about the broader controversy surrounding prediction markets for geopolitical conflicts like Iran at the MIT Sloan Sports Analytics Conference.
Koplan said it’s a “complex question” but said prediction markets serve a powerful intelligence function and value proposition, including in combat zones.
He also dismissed some criticism, saying, “More money means more problems.” “There’s still a lot of resistance to innovation, and it seems uncomfortable to begin with…that’s what makes it innovative and disruptive,” he said.
The Commodity Futures Trading Commission is the primary regulator of U.S. prediction markets such as Polymarket and Calci, and trades on these platforms are treated as financial derivatives contracts.
Although Polymarket’s main international exchange operates offshore, the company is planning a separate CFTC-regulated U.S. version of the platform.
US-based prediction sites like Manifold Markets were still allowing bets on a nuclear explosion at the time this article was published.
CNBC did not identify such bets on a large platform like Karshi, but the company has not been immune to Iran-related controversy.
Earlier, Mr. Karsi faced a backlash over the multimillion-dollar market over whether Iran’s supreme leader Ali Khamenei will be ousted. He was later confirmed killed in the first wave of Israeli and US airstrikes on February 28th.
The company ultimately issued a refund on the market, citing regulations prohibiting bets on death.
“We cannot tolerate a market that directly leads to death,” Kalsi said in a statement to CNBC.
Last week, Sen. Chris Murphy (D-Conn.) and Rep. Mike Levin (D-Calif.) proposed legislation that would limit or prohibit market settlements over military actions, regime changes, and deaths that could provoke conflict or reward access to classified information.
Insider trading concerns
US lawmakers have also suggested that markets allow room for insider trading and corruption.
Such concerns have long surrounded the prediction market boom, with some lawmakers accusing Calci and Polimarket of allowing well-connected bettors to profit from non-public information.
Sens. Merkley and Klobuchar also introduced the Prediction Markets Corruption Elimination Act last week, which would prohibit the president, vice president, members of Congress, and their immediate family members from contracting for trading events on prediction platforms.
The measure would also impose fines and cancellation of profits for violations, citing well-timed bets on a U.S. attack or a change in Iranian leadership that netted some traders hundreds of thousands of dollars in profits.
This comes after cryptocurrency analysis firm Bubble Maps identified “six suspected insiders” who placed a $1.2 million bet that the United States would attack Iran. A single multiple outcome prediction market for strike timing had accumulated more than $500 million in bets on the February 28 polymarket.
But Merkley and Klobuchar’s bill has no Republican co-sponsors, and Republicans in Congress have yet to express support for such a proposal.
Disclosure: CNBC and Kalsi have a commercial relationship that includes customer acquisition and minority ownership.
— CNBC’s Garrett Downs contributed to this report
