The alleged $400,000 insider bet by a Green Beret on a Venezuelan raid, initially thought to be an isolated incident, may be just the tip of the iceberg. A new report by the Anti-Corruption Data Collective, analyzing over 435,000 Polymarket contracts, suggests that low-probability bets on military and defense outcomes have unusually high success rates, potentially indicating insider trading or specialized knowledge. The study found that in some cases, success rates for these bets have exceeded 50%, significantly higher than the typical 14% success rate for longshot bets in political markets. This discrepancy may be attributed to information asymmetries, where informed traders have access to confidential information, allowing them to consistently outperform others.
The report's findings are consistent with previous research indicating that a small group of traders, approximately 3%, drive most price discovery on Polymarket, with fewer than 1% of wallets capturing about half of all gains. The study examined the June 2025 U.S. strikes on Iran as a case study, where 19 longshot bets totaling $164,292 were placed in the hours leading up to the strike, resulting in eight wallets sharing about $1.8 million in profits.
The pattern of well-timed bets in military and defense markets suggests that some participants may be operating with information advantages, prompting calls for increased regulation, including identity verification, conditional payouts, and restrictions on certain markets. The report ultimately questions whether the public should be allowed to bet on these outcomes, sparking a debate about the need for evidence-informed policies to prevent insider trading and protect the integrity of these markets.