The alleged insider trading by a Green Beret, who made a $400,000 bet on a raid in Venezuela, may be just the tip of the iceberg. A recent analysis by the Anti-Corruption Data Collective (ACDC) of over 435,000 Polymarket contracts and $54.4 billion in cumulative volume found that low-probability bets on military and defense outcomes have unusually high win rates, exceeding 50% in some cases.
This is significantly higher than the typical success rate of 14% for such bets in political markets. The researchers suggest that these markets are more susceptible to insider trading and information asymmetries due to the difficulty in forecasting outcomes using public information alone. The findings add to existing research indicating that a small group of traders, around 3%, drive price discovery on Polymarket, while fewer than 1% of wallets capture about half of all gains. The report highlights the need for increased market surveillance, identity verification, and restrictions on certain markets to prevent insider trading and ensure a level playing field.
The ACDC's recommendations include conditional payouts on suspicious wagers, limits on market granularity, and a broader debate on the ethics of betting on military and defense outcomes.