Insiders are betting on war: How prediction markets are becoming a national security threat
By David Szakonyi, Michelle Kendler-Kretsch, Michael Hornsby | Analysis | September 17, 2026
On Polymarket, users can bet on the occurrence of strikes and ceasefires in armed conflicts around the world. Image: MamunSheikh/Depositphotos Share
In April, a United States serviceman was charged with using classified information on the January 2026 kidnapping of Nicolás Maduro to make an astonishing $400,000 from bets on prediction markets about the future of Venezuela, its leadership, and a possible US intervention. Prosecutors say the soldier, Gannon Ken Van Dyke, helped plan the military operation and used his inside knowledge to profit from wagers considered highly unlikely at the time. He has pleaded not guilty, with a trial expected later this year.
The case underscores a new threat to national security information. Military and political leaders go to incredible lengths to prevent details of such operations from leaking to the public. Nearly every country around the world requires an arduous vetting process to obtain security clearance and closely guards access to classified information.
Prediction markets, however, create new nightmares for operational security. Anyone with insider information and internet access can bet anonymously and make a substantial profit. Moreover, their bets are observable to the whole world, giving both allies and adversaries alike a potential heads-up, even if the underlying information was never shared publicly.
Other bettors are ready to copy users with an information advantage, so a single bet on classified information can snowball into a blaring signal of impending military action visible to intelligence agencies around the world. Even more alarming, the possibility of betting on war could incentivize manipulating, or even undermining, military operations to maximize personal profit.
These risks have grown exponentially as prediction markets have exploded in popularity in recent years. The Pew Research Center estimates the combined monthly trading volume across the two biggest platforms, Kalshi and Polymarket, reached $24 billion in April 2026, up from $2 billion in August 2025.
Gone mainstream. Prediction market platforms allow users to bet on real-world events, from sports to celebrities to elections. On Polymarket, there are even markets on the occurrence of strikes and ceasefires in armed conflicts around the world. Users trade contracts based on the outcome of a yes/no question, with prices ranging between $0 and $1 to reflect the perceived probability of the event occurring. The lower the price, the lower the implied probability. When the market resolves, users holding a contract for the correct outcome receive $1, with potential profits increasing as the event’s implied likelihood falls. It pays to beat the consensus.
Prediction markets once occupied a niche, mostly confined to academic experiments. But recent legal and regulatory developments, growing investment from Wall Street, and political support from the White House have opened the door to much wider adoption.
Markets about politics are incredibly popular. Although political markets make up just 4 percent of the total questions Polymarket users can bet on, they attract over a third of the money. As of April 2026, traders have bet almost $20 billion on Polymarket’s political markets alone. The 2024 US presidential election was a watershed moment for the industry, with $4 billion dollars bet on Polymarket. Despite major polls indicating a Trump defeat, prediction markets correctly called a Republican victory, adding to the hype and helping transform the technology from a niche pursuit to a mainstream pastime.
Elections and other events decided by the public are not the only outcomes available to bet on. Polymarket allows betting on questions that certain groups, institutions, and, in some cases, individuals can know the result to in advance: These can include which luminary wins the Nobel Peace Prize, what film wins Best Picture at the Oscars, or if the United States strike Iran this month.
Our research at the Anti-Corruption Data Collective supports the theory that markets on these knowable outcomes are more susceptible to insider trading. Longshot bets—high-value, low probability wagers where a user risks $2,500 or more on something with less than 35 percent probability—are more successful in these markets, suggesting widespread abuse of information advantages.
The rise of the military-technology complex
This is not a theoretical risk, either.
In addition to the case of US serviceman who was charged this year, Israel has charged two members of its air force for betting on strikes. During his defense, one of the airmen reportedly said the practice is so ubiquitous he didn’t realize it was illegal, telling the court: “The entire Israel Air Force is involved in gambling.”
A Google employee was also charged in May for allegedly trading on confidential business information. Even the person in charge of the teleprompter at the White House was recently fined $172,000 after admitting to making $100,000 placing bets on Kalshi about the contents of President Trump’s speeches.
These cases are likely just the tip of a much larger iceberg.
Visible trail. Polymarket trades are recorded on the blockchain. This means everyone can see every trade that has ever been made, as well as the source of the money used to fund the bet, and where winnings were sent afterward. The only thing people don’t know is who runs the account.
Polymarket may not know either. Users on the main platform are not required to prove their identity and can create multiple accounts each with its own digital “wallet.” Polymarket also operates a much smaller, licensed US entity—Polymarket US—that does require users to register with their true identity, as does Kalshi. But most of the betting on military operations occurs on the Polymarket’s main platform, which performs no Know Your Customer (KYC) checks.
Analyzing more than 400,000 settled markets on Polymarket, we found that rather than being isolated incidents, suspicious betting is especially rife on military markets. In line with expectations, high value, risky bets with an implied probability of under 35 percent payout only 14 percent of the time across the platform. But in military and defense markets, the win rate rises to a staggering 52 percent.
Looking at the digital wallets making these unlikely bets, we found an alarming cohort of users who only traded on one or two topics yet won at abnormally high rates. We dubbed these “Orcas,” after the highly specialized and successful predators they resemble. These users usually open accounts just days or even hours before making their first longshot trade. Most only ever place high-risk, low-probability bets. In military markets, we found 152 of these Orcas, who collectively have made more than $8 million on the platform. Their average win rate was tellingly over 97 percent on such risky bets.
It is difficult to attribute such successes to luck alone, especially when the markets concern events that are knowable to a select few, and are unknown to the public.
When journalists at CNN presented Polymarket with our analysis figures, representatives from the betting platform indicated the company had referred “dozens” of such wallets to the U.S. Department of Justice, and that criminal investigations are ongoing.
In August, The Wall Street Journal reported that the Department of Justice is investigating and preparing to charge another US soldier for insider trading on classified information, as part of a wave of such prosecutions. An employee at the British accounting and consulting firm KPMG is also reportedly suspected of betting using non-public information to gain an advantage. While it is reassuring that Polymarket tracks and refers such cases to officials, its response appears to confirm the scale of possible insider trading on military markets—which the company continues to allow on its platform.
How to salvage the NPT Review Conference
Law enforcement investigations take time. Absent real identities reliably connected to wallets, investigators are left tracing the money across the blockchain, hoping it passed through a regulated crypto exchange that can reveal who the user is.
Meanwhile, these hallmarks of insider trading are visible in real time to anyone watching the chain, which not only allows public-interest researchers and journalists like us to see risky trades, but also other traders.
Analyzing the pattern of betting on US military strikes against Iran, we found signs that wallet betting by Orca wallets (meaning potential insiders) is copied by prediction market super users—giant traders we call Whales, who make wagers in more than 100 markets and multiple topics, hedging their bets across the platform. Automated, algorithm-powered trading accounts also pick up these insider signals. In fact, serious traders can even subscribe to services that send an alert about possible insider activity which they could mimic for a shot at a big pay day.
That means that a bet based on secret or sensitive information can not only be seen but also amplified. Ahead of both the June 2025 and 2026 US-Israel strikes on Iran, we saw patterns of longshot bets by “Orcas” being placed on highly specific outcomes related to the conflict: “US military action against Iran by Saturday?” or “Will the US next strike Iran on February 28, 2026?” Soon after, “Whale” accounts, with far more capital at their disposal, placed much larger wagers, appearing to follow the breadcrumbs left by users who appear to know something that others don’t.
Tipping intelligence agencies. If financial speculators can see such trades happening in real time, one can safely predict that intelligence agencies around the world can see them too. In combination with other sources, these data points can become a remarkably precise warning of the timing and target of military actions. A foreign adversary that wants to acquire classified information no longer needs to arrange a bribe or even hack into a closed system. All it needs to do is to monitor prediction markets for anomalous wagers.
A top-secret military operation being foiled because a military insider bet on it would not only be enormously embarrassing, it also would create an unnecessary risk of life and be a disaster for international relations. If allies suspected that clues about classified information might appear on the blockchain, it could put delicate intelligence-sharing relationships built over decades at risk.
Perhaps even more troubling, markets on the probability of military outcomes can create a perverse incentive to conduct, move forward, delay, or even sabotage a military operation for personal profit.
As of now, there haven’t been any visible signs of this taking place. But the mere existence of markets that allow gambling on war creates the possibility. There are currently more than 450 open markets on Polymarket on questions related to military and defense.
Everyone, from regulators and lawmakers to the public to the companies themselves should reject gambling on war, before something previously unthinkable happens. The next funding bill for the U.S. military contains a provision that would, if passed, ban Americans from placing, accepting, or facilitating bets on war. But enforcing such a ban when the bets are placed anonymously on an offshore platform will test the capacity of US legal authorities. It is not enough just to ban insider trading or even require more robust identification of bettors. Collectively, people need to decide whether there are certain topics that should not be wagered on. National security must come before personal profit.
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