Ban death-linked contracts in commodities

Summary#

The DEATH BETS Act would amend the Commodity Exchange Act; it would not create a separate law. Its stated goal is to prohibit certain contracts tied to war, death, and similar activities. The bill has been referred to a Senate committee and is not law.

  • A registered entity must not list for trading or accept for clearing contracts based on an “excluded commodity” that involve, relate to, or reference terrorism, assassination, war, or a similar activity as determined by the Commodity Futures Trading Commission.
  • A registered entity must also not list or accept for clearing contracts based on an excluded commodity that involve, relate to, or reference an individual’s death, or could be construed as closely correlating to an individual’s death.

What it means for you#

  • Registered entities: The bill would prohibit them from listing or clearing the covered contracts. The text does not set out application or review procedures.
  • People who use these markets: As an inference, some contracts might no longer be available to trade or clear through a registered entity. The bill’s operative ban is on registered entities; it does not itself state a penalty for an individual who makes or offers a contract elsewhere.
  • General public: The bill does not create a new agency, benefit, tax, or front-line service.

Money#

No cost information is in the available material.

  • The bill requires registered entities to follow the prohibition, but provides no estimate of their compliance costs or any public costs.
  • It does not specify a new fee, fine, appropriation, or funding source.

What is unclear#

  • The supplied materials do not include the current Commodity Exchange Act, so I could not verify what limits or enforcement rules already apply.
  • The bill does not explain which contracts count as “excluded commodities”; it refers to a definition elsewhere in the Act, which was not supplied.
  • The Commodity Futures Trading Commission would determine what counts as an activity similar to terrorism, assassination, or war. The bill gives no criteria for that decision.
  • The phrase “could otherwise be construed as correlating closely” to an individual’s death is not defined.
  • The bill does not state when the prohibition would start, how violations would be handled, or what penalties would apply.

Case for#

  • A possible argument for the bill is that it would prevent registered entities from listing or clearing contracts tied to war, terrorism, assassination, or an individual’s death.
  • This could be seen as setting a clear limit on what those entities may offer, rather than relying only on individual market decisions.
  • The bill also covers contracts that closely correlate with an individual’s death, which may address contracts that do not directly name a death but are closely connected to one.

Case against#

  • One concern is that the bill leaves key terms undefined, especially what closely correlates with an individual’s death.
  • The Commission’s authority to determine similar activities could make the prohibition’s reach uncertain.
  • The bill does not explain how decisions would be made, what notice or review would be available, or what penalties would apply.
  • Without the current Act text, it is unclear how this prohibition would interact with existing rules.