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 new 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, uncovering concerning patterns in military and defense markets. Low-probability bets in these markets have success rates exceeding 50% in some cases, significantly higher than the 14% average across all political markets. This discrepancy suggests that some traders may be exploiting information advantages, including insider knowledge or specialized information, to consistently outperform others.
The ACDC report supports existing research indicating that a small group of traders drives price discovery and captures a disproportionate share of profits on Polymarket. A working paper by the London Business School and Yale found that roughly 3% of traders account for most price movements, while separate analysis by Solidus Labs revealed that fewer than 1% of wallets capture about half of all gains. The ACDC report's findings imply that some of this edge may stem from access to confidential information.
The report examines 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, 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 well-timed bets on the outcome. This pattern is not an isolated incident, as the report found that winning longshot bets outnumbered losing ones in five of the six two-hour windows before market resolution across Polymarket's military and defense category.
While longshot bets can outperform due to mispricing or shifts in public expectations, the consistency of these patterns, especially in markets tied to military decisions, suggests that some participants may be operating with information advantages. The ACDC report 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. Ultimately, the report calls for an evidence-informed debate on whether the public should be allowed to bet on these outcomes at all.