"It's inherent to their business model: When you make a website where anyone can bet on anything, there is going to be someone with some nonpublic information ready to place a wager and make a killing. Sometimes, those insider-trading scandals are relatively harmless, like the one-day-old Polymarket account that correctly predicted 17 out of 20 Super Bowl halftime show events, including appearances from Lady Gaga and Ricky Martin."
"A joint statement from the Defense Ministry, Israeli police, and the Shin Bet domestic security announced bribery and obstruction of justice offenses against an IDF reservist and a civilian for allegedly using classified information to bet on Israeli military actions on Polymarket. The suspects made wagers based "on the basis of classified reports, which reservists were exposed to in the context of their role in the military," according to the statement."
Prediction markets allow public wagering on varied events, which creates inherent insider-trading risks when participants hold nonpublic information. Israeli authorities indicted an IDF reservist and a civilian on bribery and obstruction charges for allegedly using classified reports to bet on Israeli military actions on Polymarket. Officials did not name suspects or operations; media reported a probe into a Polymarket wager on the timing of an Israeli attack on Iran. The account reportedly earned $150,000 before disappearing. The IDF called the reservist's conduct a grave ethical failure and said no operational harm occurred. Other suspicious wagers on Polymarket and Kalshi have yielded large profits and scandals.
Read at Intelligencer
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