The alleged insider trading incident involving a Green Beret's $400,000 bet on a Venezuelan raid may be just the tip of the iceberg. A comprehensive report by the Anti-Corruption Data Collective (ACDC) analyzed over 435,000 Polymarket contracts and $54.4 billion in trading volume from January 2021 to mid-March 2026, revealing a disturbing trend.
Low-probability bets on military and defense outcomes have consistently outperformed expectations, with success rates exceeding 50% in some cases - a stark contrast to the typical 14% success rate for such 'longshot' bets across political markets. The authors of the report suggest that markets related to government policies, such as military and defense, are particularly vulnerable to information asymmetries, including insider trading and specialized knowledge. This creates an environment where a small group of informed traders can consistently outperform others, not just by reacting faster, but by possessing superior knowledge. The report's findings add to a growing body of research indicating that a small percentage of traders dominate price discovery and profits on Polymarket.
A working paper from London Business School and Yale found that roughly 3% of traders account for most price discovery, while separate analysis from Solidus Labs showed that fewer than 1% of wallets capture about half of all gains. The ACDC report examines the June 2025 U.S. strikes on Iran as a case study, highlighting the placement of 19 longshot bets totaling $164,292 in the hours leading up to the strike, with eight wallets sharing about $1.8 million in profits.
The report's authors propose several measures to address the issue, including identity verification for bettors, conditional payouts on suspicious wagers, restrictions on markets whose outcomes are decided by small groups, and limits on contract granularity. Ultimately, the report calls for an evidence-informed debate about the propriety of allowing the public to bet on such outcomes.