Polymarket has generated 62.3 billion dollars in notionaltrading volume over the past three years, giving it a 54.5% share of the 114.4billion‑dollarprediction markets segment tracked by Token Terminal. Kalshi ranks second with52 billion dollars in three‑year notional volume, underscoringhow the two venues now dominate on‑chain and regulated event trading.According to Token Terminal’s market breakdown, predictionmarkets as a whole have cleared more than 114 billion dollars in notional flowover the same three‑year period, with Polymarket sitting at the top of thecategory by cumulative volume. Most of this activity on Polymarket has settledon Polygon, which remains the primary chain for its event contracts over theobserved timeframe.Iran-linked event contracts drive record trading volumes asUS regulators and lawmakers move to tighten oversight of prediction markets.CFTC Advances Rules on Event ContractsUS regulators have started to formalize how they treat theseproducts. The Commodity Futures Trading Commission has issued guidance thatcategorizes event contracts as a financial asset class and launched arulemaking process to determine how the Commodity Exchange Act applies toprediction markets. CFTC chair Michael Selig has argued that the agency holdsexclusive jurisdiction over these venues, though a recent Ohio court rulingquestioned whether federal law fully preempts state gambling statutes in somecases.At the same time, lawmakers are targeting war-relatedcontracts. Senator Adam Schiff has introduced the DEATH BETS Act, which wouldamend the Commodity Exchange Act to bar CFTC-regulated venues from listingmarkets tied to war, terrorism, assassination and individual deaths.Prediction markets tied to the escalating US–Iran conflicthave pushed trading activity on Polymarket and Kalshi to record levels, even asWashington moves to restrict some of the most controversial contracts. Weekly notional volume on both platforms recently hit newhighs, while aggregate prediction market activity has climbed to tens ofbillions of dollars in notional terms and millions of users.Schiff Bill Targets War and Assassination MarketsThe proposal followed reports that several Polymarkettraders earned about 1 million dollars by correctly positioning for a US strikeon Iran, and that Israeli authorities arrested two people accused of usingconfidential information about an Israeli strike to trade on the platform.With volumes surging and scrutiny intensifying, predictionmarkets now face a pivotal test over how far financial markets can go inturning geopolitical and security events into tradable instruments.This article was written by Jared Kirui at www.financemagnates.com.