Former White House budget director Mick Mulvaney is calling for state-level regulation of prediction markets, warning that betting on geopolitical events like war could pose national security risks. The push comes as speculative contracts tied to Middle East tensions surge on major platforms.
- Mick Mulvaney advocates for state-level regulation of prediction markets over federal oversight.
- Contracts predicting U.S.-Iran conflict rose from $0.32 to $0.67 in one week.
- CBOE Volatility Index (^VIX) reached 34.8, the highest since October 2023.
- Crude oil (CL=F) surged 4.2% to $89.70 per barrel amid escalation fears.
- Defense stocks including LMT and RTX rose 5–6% on heightened geopolitical risk.
- Apple (AAPL) dipped 0.9% as capital shifted toward defensive and cyclical assets.
Mick Mulvaney has renewed calls for state governments—not federal agencies—to regulate prediction markets, emphasizing the growing risks associated with wagering on high-stakes events like military conflict. Speaking in a press briefing on March 3, 2026, Mulvaney cited the rise of contracts on potential U.S.-Iran military escalation as a key concern, noting that such markets could inadvertently fuel instability by incentivizing extreme outcomes. Prediction platforms have seen a sharp uptick in activity related to Middle East tensions, with contract prices fluctuating widely. On one major platform, the price of a contract predicting a U.S.-Iran military confrontation within the next 12 months rose from $0.32 to $0.67 in a single week, reflecting heightened market anxiety. Meanwhile, the CBOE Volatility Index (^VIX) spiked to 34.8, its highest level since October 2023, signaling broad investor unease. Energy markets reacted swiftly. Crude oil futures (CL=F) climbed 4.2% to $89.70 per barrel, with traders pricing in potential supply disruptions from the Strait of Hormuz. Defense stocks also saw strong gains, with Lockheed Martin (LMT) up 6.3% and Raytheon Technologies (RTX) rising 5.1%. Apple (AAPL), while less directly impacted, experienced a modest 0.9% dip as investors rotated capital toward cyclical and geopolitical hedges. Mulvaney’s stance underscores a growing divide over regulatory jurisdiction. While federal agencies have traditionally focused on financial integrity, Mulvaney argues that state regulators are better positioned to assess localized risks, especially when contracts involve national security implications. His remarks follow increased scrutiny of platforms like PredictIt and Augur, which have seen record volumes on conflict-related markets.