Polymarket’s War Bets Draw Lawmaker Backlash and Legal Scrutiny

Even as prediction-market platforms have tested legal and regulatory norms like never before, most have drawn a line at one category: direct wagers on war.

Not Polymarket.

In recent weeks, the startup — newly backed by Intercontinental Exchange Inc., the parent company of the New York Stock Exchange — has listed a growing roster of contracts related to active military conflicts, including the possibility of China invading Taiwan and Russia capturing various cities in Ukraine. One market, tied to US strikes on Iran, has generated more than $18 million in trading.

This week, a group of 12 Democratic senators ...