Former N.J. AG: How betting on assassinations and elections became legal in America

By John J. Farmer Jr.
In the eighteenth century, as England’s global ambitions grew, the necessity of mitigating risk by sharing the consequences of loss became apparent, and the modern insurance industry was born.
One notable species of insurance was, however, almost immediately problematic: life insurance.
The Life Assurance Act of 1774 was passed to restrict an increasingly inimical act: taking out life insurance policies on the lives of others — and then killing them.
In order to insure a person’s life, the act held, one had to have a financial stake in his survival. Payment upon someone’s death, in other words, should be compensation for loss, not a windfall payout.
That nugget of legal history has come to mind as the so-called “prediction markets” have boomed, allowing wagering on everything from regime change to election results.
That’s to say, prediction markets don’t just observe reality — they can warp it. For New Jersey residents, that means higher risks to election integrity, economic stability, and financial security, with very little public upside.
Congress should ban certain bets — such as wagering on assassination — and require that the Commodity Futures Trading Commission more aggressively regulate others, for they suffer from the same flaw that caused life insurance to be reformed over two centuries ago: unlike a bet on a throw of the dice or a slot machine pull, they present unmanageable incentives to influence the outcome of the bet.
Take, for instance, a bet on the outcome of an election. The person placing the bet in no way relinquishes her ability to affect that election’s results by spending unlimited amounts of money and taking other measures in order to secure the desired result and thus to collect on her wager.
That agency — the ability to assure the wagered result by the bettor’s own conduct — is the very gateway to rigged elections.
The implications for national security are equally dire. As Alex Goldenberg and Max Meizlish have pointed out in a Wall Street Journal op-ed, adversaries seeking “advance warning of a military strike, a window into classified decision-making, a tool to sow panic in financial markets … may have found all three in the same place: prediction markets.”
Bets placed suspiciously in advance of Maduro’s abduction in Venezuela and Ayatollah Khamenai’s assassination in Iran highlight the potential for insider information to infect not just the betting process but the decision to attack itself — and, in the future, to inform the response. As Goldenberg put it, “Any advance notice to an adversary is problematic. And these predictive markets, as they stand, are designed to leak out this information.” The potential of such wagering to signal national intentions is too great to be tolerated.
President Trump, in particular, should be concerned about the self-fulfilling nature of the betting allowed in such markets.
The health of the economy is threatened by the wars in the Middle East and the spiking of oil prices, which add to other inflationary pressures from tariffs and built-in high prices for groceries and consumer goods. Diminishing job creation numbers mean increased social pain, while the administration’s mainstreaming of the inherent volatility of crypto currency has introduced a further unstable economic variable.
As journalist Jay Elwes of The New World points out, moreover, “the weak dollar indicates a fundamental global uncertainty about the U.S. Trump makes America look unpredictable, unstable and risky. Just look at the tariffs mess. The U.S. is not only suffering from stubbornly high inflation, which Trump has made worse, but it’s also in the throes of an AI boom, driven by technology companies that are investing vast amounts of money in each other.“
The national debt is also reaching unprecedented levels, to the point that “the latest guidance by the Chinese banking authorities urged the country’s financial institutions to reduce purchases of U.S. government debt. If necessary, they were advised to sell holdings of US Treasuries to limit their exposure. The prospect of the U.S. administration descending into a morass of legal argument over tariffs will only encourage the general view that America is not currently a great bet.”
Worries that America may not be a “great bet” are compounded by concerns about the temperament of the commander-in-chief himself, whose history as a business leader is, according to the Trump Organization’s own SEC submission, littered with mismanaged debt and hastily undertaken and abandoned enterprises. The submission begins with his multiple casino bankruptcies driven by excessive debt, including settlement of an SEC fraud investigation 2002, but goes on to list an astonishing range of failed economic judgments:
Trump Shuttle, which defaulted on its loans in 1990 and ceased to exist by 1992
Trump University, which ceased operations in 2011 and settled fraud claims in 2017 for $35 million
Trump Vodka
Trump Mortgage, LLC
GoTrump.com, a travel site founded by President Trump in 2006
Trump Steaks, a brand of steak and other meats founded by President Trump in 2007, which discontinued sales two months after its launch.
Not surprisingly, then, prediction markets like Kalshi and Polymarket are currently taking bets on President Trump’s management of the economy, raising the odds of a recession by the end of 2026 as the price of oil has grown and uncertainty about inflation, employment, and the fragility of the AI boom has risen.
Given the volatility of current market and geopolitical conditions and Trump’s erratic history, betting against his management of the economy may indeed become increasingly attractive.
So might efforts to place bets on the other side to offset that pessimism. But that is precisely the problem with allowing unregulated prediction markets: as betting against the president or for him on the economy becomes more prevalent, the temptation to act to affect conditions may well turn one side’s wagers into self-fulfilling prophesies.
I won’t be making any such bets; I think the prediction markets should be outlawed or severely limited. At a minimum, the administration and Congress should enact reforms akin to the Life Assurance Act of 1774, which predates the American revolution and remains in place, by defining what types of wagers are “contrary to the public interest.”
But if I were a betting man…