Decentralized prediction platform Polymarket enables users to bet on the outcome of real-world events. However, the recent introduction of a betting market focused on “Hezbollah” has sparked a debate about the ethical implications of such markets.

Some of the markets included bets on whether Israeli forces would enter Lebanon, and bets on a U.S. military strike in the region. Polymarket has since removed the Hezbollah tag, but bets on the escalating conflict in the Middle East are still ongoing.

“The promise of prediction markets is to harness the wisdom of the crowd to create accurate, unbiased forecasts for the most important events to society.  That ability is particularly invaluable in gut-wrenching times like today,” said Polymarket in a note above all Middle East-related bets on its website.

“After discussing with those directly affected by the attacks, who had dozens of questions, we realized that prediction markets could give them the answers they needed in ways TV news and Twitter could not.”

The platform also noted that it was not taking any fees from these bets and was providing the service at a loss.

“It feels wrong that Polymarket has an entire Hezbollah betting section that makes a war look like a football game to bet on,” said pseudonymous host of Modern Markets “Legendary” on X.

Another pseudonymous X user “Kix.eth” shared a counter take. According to Kix, anyone who invests in the S&P500 invests in the companies who built the missiles that Israel used. Kix also argued that betting on the outcome of a disaster could be a form of insurance.

Ethereum cofounder Vitalik Buterin weighed in on the discussion, saying he supported these [markets] existing. 

“The point of polymarket is that from the perspective of traders it’s a betting site, but from the perspective of viewers it’s a news site.

“There’s all kinds of people (incl elites) on twitter and the internet making harmful and inaccurate predictions about conflicts, and being able to go and see if people with actual skin in the game think that something has a 2% chance or a 50% chance is a valuable feature that can help keep people sane.”

In his view, these markets are a way to create real consequences for unjustified fear-mongering and complacency without relying on governmental or corporate censors.

Meanwhile, Zach Rynes, who recently doxed himself as the man behind the ChainLinkGod X account argued that prediction markets about an influenceable event will start to either incentivize action or subsidize the inevitable if it is sufficiently liquid.

“If these markets traded with $100M+ liquidity, would that change the outcome? Maybe not, but if insider traded, would they not be subsidizing war?,” said Rynes.

“I don’t think prediction markets are passive observers, their existence influences outcomes when operating at scale.”