A recent investigation into Polymarket, a platform for betting on real-world events, has uncovered a potential crisis of insider trading in military and defense-related markets. The study, conducted by the Anti-Corruption Data Collective (ACDC), analyzed over 435,000 markets and $54.4 billion in cumulative volume from January 2021 to mid-March 2026. The findings indicate that low-probability bets on military and defense outcomes have succeeded at rates that cannot be explained by skill or luck alone, with some cases seeing success rates of over 50%.
This is significantly higher than the average success rate of 14% for such 'longshot' bets across political markets. The researchers suggest that markets related to government policies, such as military and defense, are more susceptible to information asymmetries, including insider trading or specialized knowledge. The gap between informed and uninformed traders may be widest in these markets, allowing a small group to consistently outperform others. The ACDC report's findings add to a growing body of research pointing to a concentrated group of traders driving prices and capturing most profits on Polymarket.
A separate working paper found that roughly 3% of traders account for most price discovery, while another analysis showed that fewer than 1% of wallets capture about half of all gains. The report examines the June 2025 U.S. strikes on Iran as a case study, finding that a small number of traders placed large, well-timed bets on the outcome, despite the operation being designed to be unreadable from the outside.
The pattern extends beyond a single event, with winning longshot bets outnumbering losing ones in five of the six two-hour windows before market resolution. The researchers suggest that some participants may be operating with information advantages that others do not have, and recommend identity verification for bettors, conditional payouts on suspicious wagers, restrictions on markets whose outcomes are decided by small groups, and limits on how granular contracts can become. The report concludes by calling for an evidence-informed debate about whether the public should be betting on these outcomes at all.