Insider Betting on Polymarket

Insider trading is rife on Polymarket:

Analysis by the Anti-Corruption Data Collective, a non-profit research and advocacy group, found that long-shot bets—defined as wagers of $2,500 or more at odds of 35 percent or less—on the platform had an average win rate of around 52 percent in markets on military and defense actions.

That compares with a win rate of 25 percent across all politics-focused markets and just 14 percent for all markets on the platform as a whole.

It is absolutely insane that this is legal. We already know how insider betting warps sports. Insider betting warping politics—and military actions—is orders of magnitude worse.

Tags: gambling, insiders

Posted on May 8, 2026 at 1:49 PM • 10 Comments

Comments

BENN • May 8, 2026 2:36 PM

There’s no victim or crime to supposed insider trading.

Even for the military, there’s no way to control all possible metadata channels and the risk is almost zero in betting markets.

David Orr • May 8, 2026 2:51 PM

I don’t think that insider trading with military secrets is legal? There are a number of laws forbidding leaking military secrets.

Also the ToS for all the market platforms forbids insider trading.

Cedar34 • May 8, 2026 4:00 PM

@ORR

Nobody ‘leaked military secrets’ via insider betting & there are are no explicit legal prohibitions to that event now contrived as a crime ex post facto

anonymouse random • May 8, 2026 4:42 PM

@BENN: “There’s no victim or crime to supposed insider trading.”

I rate this comment FALSE.

If, for example, a CEO secretly sells shares before a lousy earnings report, she has taken money from her company’s shareholders. Why? Because they bought those shares from her at a higher price than they would have if she had sold after the announcement.

Also insider trading is, in fact, a crime in the U.S. under certain circumstances. See https://www.justia.com/criminal/offenses/white-collar-crimes/insider-trading/ .

@BENN: “Even for the military, there’s no way to control all possible metadata channels and the risk is almost zero in betting markets.”

If Maduro had been watching Polymarket as very unusual trading activity occurred on contracts re his ouster, he might have prepared better. “Insider trading” on classified info is disloyal and almost certainly criminal (e.g., Espionage Act, wire fraud).

Clive Robinson • May 8, 2026 7:58 PM

@ Bruce, ALL,

“It is absolutely insane that this is legal. We already know how insider betting warps sports. Insider betting warping politics—and military actions—is orders of magnitude worse.”

The “legality” is not really important all betting is “insane” full stop.

As I’ve told people in the past and still do now,

“I don’t gamble unless I know I’m going to win.”

People think I’m joking untill I beat them repeatedly with what should be a “fair coin toss” “with their coin”[1]…

People have to understand the basic premise of gambling,

1, That for a winner to get payed the money has to come from a looser or some reserve.
2, For a “bet to be fair” there must be no bias hidden or otherwise.

The observant will note that for there to reliably be reservers the “bet must not be fair” that is there has to be bias in favour of the person who holds the reserve.

Thus the two questions that you should have in your mind are,

“What the bias is?”
“Does the bias work in your favour?”

If you can not answer those correctly then you would by definition be “insane to bet”.

Professional gamblers work by biasing the payout, that is they “rig the odds” in some not obvious way[2].

[1] As I’ve explained before, even what should be a “fair coin toss” can be biased by the person tossing the coin, even if the coin is perfectly fair… All it takes is a little practice “in the catch and show”… which is why coin tosses at sporting events usually omit these actions and have “the call” during the “coin flight” and have the “coin fall” to the ground and not be caught.

[2] Rigging the odds can be done in so many ways it’s difficult to see just how the odds work “for the pro” and “against the chump / mark”.

I won’t explain the betting details just say that one method used to hide there is a bias uses three copper coins and five silver coins in the pro’s pocket. They just pull a coin from their left pocket, bet based on the metal and put the coin in their right pocket. When the left pocket is empty they work back from the right pocket but they bet the other way. That is they bet the other way on the coins metal so you as the mark don’t get “tipped off”.

Dave • May 8, 2026 11:17 PM

And you can bet that Russia, Iran, and others are closely watching PolyMarket for sudden long-odds bets on impending US military action and similar.

Rontea • May 9, 2026 9:26 AM

Polymarket’s long‑shot bets on military actions winning at a 52% rate is not luck; it’s a signal of insider information leaking into prediction markets.

The problem here isn’t just the ethics of insider betting. It’s that these markets can become tools for information asymmetry, where those with privileged access can profit while everyone else is effectively providing liquidity.

We’ve seen this pattern over and over: technology enables new forms of exposure and monetization, the law lags, and bad actors exploit the gap. Unless regulation catches up, insider prediction markets are going to be as destabilizing as insider trading in finance—if not more so, because they can influence the events themselves.

dbCooper • May 9, 2026 10:42 AM

“It is absolutely insane that this is legal.”

Front running markets is not legal. Enforcing existing laws is the issue that needs addressed. Doing so is complicated by the speculation that the “enforcers” are engaged in the front running.

Ronnie Horesh • May 9, 2026 2:46 PM

We can channel people’s willingness to speculate for the benefit of all. If you hope for a particular outcome and put a sufficiently large bet on it, then at some point it would be in your interests to make that outcome happen. Applying that to desirable social and environmental goals, and restricting any goal-achieving activities to those that are legal, is the underlying principle of my Social Policy Bond idea. Example: people could collectively to bet on something that a counterparty thinks unlikely, such as no nuclear conflict for ten years. They could then strive to achieve that goal, using their own funds and the possibility of the eventual payoff as collateral for projects that will reduce the probability of nuclear war. Since most of our important social and environmental goals are long term in nature, it could be helpful only if there were a secondary market for the bet. Then people could trade in and out, without having to wait till the goal is achieved before they can realise a gain: they’d make a profit if the market sees quick attainment of the goal as more likely. The money won by those working to achieve social goals need not come from other bettors: it can come from government, NGOs, philanthropists or the public, who could all contribute to the funds used to reward those working for peace.

Toggle • May 9, 2026 4:51 PM

“Insider trading” is the bogus ‘theory’ that honestly obtaining information from non-public sources and using it for one’s financial advantage… is somehow unethical/criminal.

Superior personal knowledge in an economic context is inherently evil ??

Nonsense. The world functions on people seeking advantage thru better knowledge and marketing/sharing it to the benefit of all.

Note that GAMBLING IS A ZERO-SUM GAME unrelated to Market cooperation and societal benefits, but well within the scope of free choice in society.

Insider Betting on Polymarket

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