When free markets collide with poor taste. Bets on CEO murder test limits
One week after the December 4 murder of UnitedHealth Group executive Brian Thompson in New York, Americans were able to bet on the fate of his alleged killer. Some people, including financial regulators, may have a problem with that.
Contracts offered by Kalshi, a New York exchange, allow retail traders to put money on the outcome of nearly anything. Kalshi listed wagers on December 11 related to Thompson’s death that included whether the suspect, Luigi Mangione, would be extradited to New York from Pennsylvania, whether he acted alone and whether he would be convicted or plead guilty.
Wagers linked to murder suspect Luigi Mangione (right) illustrate the challenge faced by regulators in the burgeoning business of events contracts.Credit: Bloomberg
Two days later, when trading suddenly halted, Kalshi told customers it made the decision “after receiving notice from our regulators”, according to messages reviewed by Bloomberg News.
The regulator, the Commodity Futures Trading Commission, and Kalshi declined to comment. The agency bans futures trading linked to crimes including assassination, terrorism and war if it decides the so-called events contracts are against the public interest.
Wagers linked to episodes such as murder illustrate the challenge faced by regulators in the burgeoning business of events contracts, that is, what happens when free markets and poor taste collide. Hot-button topics can be very profitable for the purveyors, and they can go live quickly without approval from the regulator. Critics say exchanges are pushing futures trading far beyond true risk hedging or other legitimate economic purposes.
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“It’s straight gambling,” said Cantrell Dumas, director of derivatives policy at Better Markets, a financial policy think tank in Washington. “People are betting on whether this person is allegedly responsible for the assassination of another human being, and here we are desensitised to this and betting on whether he’ll enter a guilty plea.”
Contracts related to Mangione were still being traded on unregulated exchanges, among them crypto-only Polymarket, which says it has excluded US users since 2022 as part of a settlement with US authorities.
In a December 23 hearing, Mangione pleaded not guilty. His lawyer expressed concern about getting a fair trial due to statements being made by state officials.
