An alleged $400,000 insider trade by a Green Beret on a Venezuela raid initially seemed like an isolated incident. However, a recent report by the Anti-Corruption Data Collective (ACDC) suggests it may be part of a larger issue.
The nonprofit research group analyzed over 435,000 Polymarket contracts from January 2021 to mid-March 2026, finding that low-probability bets on military and defense outcomes have success rates that are difficult to explain by skill or luck alone, with some cases exceeding 50%. This is significantly higher than the typical 14% success rate for longshot bets in political markets. The authors of the report note that markets related to government policies, such as military and defense, are harder to predict using public information, making them more susceptible to insider trading or specialized knowledge. The gap between informed and uninformed traders in these markets may be particularly wide, allowing a small group to consistently outperform others.
Polymarket has market surveillance teams and cooperates with the Department of Justice on insider trading cases, including the Venezuela incident. Trading on confidential knowledge is prohibited on the platform. The ACDC report adds to existing research indicating that a small percentage of traders account for most price discovery on Polymarket, with roughly 3% of traders driving prices and fewer than 1% of wallets capturing about half of all gains.
The report examines the June 2025 U.S. strikes on Iran as a case study, finding that 19 longshot bets totaling $164,292 were placed in the hours leading up to the strike, with eight wallets sharing about $1.8 million in profits. Despite the Pentagon's efforts to keep the operation secret, a small number of traders placed large, well-timed bets on the outcome. The pattern of winning longshot bets extends beyond this single event, with the report finding that in five of the six two-hour windows before market resolution, winning longshot bets outnumbered losing ones in Polymarket's military and defense category.
While longshot bets can outperform due to mispricing or shifts in public expectations, the consistency of the patterns suggests that some participants may have information advantages. The ACDC recommends implementing identity verification for bettors, conditional payouts on suspicious wagers, restrictions on markets whose outcomes are decided by small groups, and limits on contract granularity. The report concludes by calling for an evidence-informed debate on whether the public should be allowed to bet on these outcomes at all.