Prediction market insider trading is again making headlines.

Israel became one of the first to make arrests when in February police announced that a civilian and an army reservist had been jailed for using classified information to bet on the date of an Iran attack.

In April, a U.S. soldier was charged with betting on the capture of former Venezuelan leader Nicolás Maduro.

On Sunday, CBS’s “60 Minutes Overtime,” a digital companion to the TV show, reported in what may turn out to be an “egregious case” of insider trading that nine linked Polymarket accounts garnered more than $2.4 million betting almost entirely on U.S. military actions. The report was based on research from data analytics firm Bubblemaps.

Insider trading, the sharing of nonpublic information for personal gain, typically conjures up backdoor business deals, such as the recent case that has shaken the Mergers & Acquisition market of Nicolo Nourafchan, an attorney who used his position at elite law firms for more than a decade to feed illegal tips to traders, earning millions in kickbacks.

Prediction markets, of which the two biggest are Polymarket and Kalshi, offer the ability to bet on virtually anything. Participants can wager on the mundane, such as the outcome of a sports event, to the more outlandish, such as when alien life will be confirmed. Bets take on a less innocuous hue when it comes to the timing and outcome of political events or sensitive military operations, particularly when such bets are placed by those in the know.

“More than $1 billion has been staked online this year on military decisions and outcomes. The ability to bet on war on prediction markets has created a whole new category of insider trading,” CBS reported.

Monthly trading volume on prediction markets overall grew from less than $100 million at the start of 2024 to more than $13 billion by the end of 2025, CBS said.

The Wall Street Journal’’s top story on Monday focused on the rise of dubious wagering activity in Washington, D.C. The case of U.S. Army Master Sgt. Gannon Ken Van Dyke, the special forces soldier involved in the planning and capture of Maduro, who then raked in $400,000 betting the Venezuelan strongman would be out of power by Jan. 31, is only the best known so far. Officials at the Justice Department and Commodity Futures Trading Commission told the paper that more cases are to come.

Among trades being investigated are bearish billion-dollar bets placed on oil futures, in some cases minutes before the White House made major announcements.

Israel is also aggressively pursuing its first prediction market scandal. In March, it revealed the name of the citizen involved in the Iran war bets on Polymarket as Omer Ziv, 30. The name of the Israeli Defense Forces officer has been withheld from the public. He has been identified only as an air force major in the reserves.

Ziv and the IDF officer have been in custody since the end of January.

In making the arrests, Israel’s police said, “The defense establishment emphasizes that making such bets, based on secret and classified information, poses a real security risk to IDF operations and state security.”

According to the indictment filed against them, Ziv bet on Polymarket regarding the date of Israel’s attack in “Operation Rising Lion,” which lasted from June 13-24, 2025, as well as additional attacks, using information provided by the IDF officer.

The two met while working at a technology game company. When the reservist was called up, they agreed that he would provide Ziv with insider information on “Rising Lion.”

“On the background of the defendant’s exposure to confidential information by virtue of his position in the reserves, the defendants agreed among themselves that Defendant 1 (the reservist) would provide Defendant 2 (the civilian) with confidential information regarding ‘Operation Rising Lion.’ In exchange for the citizen investing his money in a bet on Polymarket on the date of the operation, he would give the defendant half of the profit,” the indictment read.

Ziv won $128,432. He shared the profits with the reservist in cryptocurrency.

In another well-covered case, an Israeli journalist found himself the target of death threats for a report that affected the betting of certain unsavory characters.

Emmanuel Fabian, military correspondent for The Times of Israel, reported that an Iranian missile had struck a forest in Israel on March 10. People had wagered more than $14 million on Polymarket both for and against a strike that day.

The losers “flooded Mr. Fabian with demands that he change his story—that he reframe the missile as intercepted debris and let them collect. Some offered him a cut of their winnings,” The New York Times reported.

The messages then took a threatening turn. “One of them was, ‘You’re going to make us lose $900,000. And we’ll invest even more than that to finish you,’ is what he wrote,” Fabian told CBS. “He also wrote details about my siblings as well. He said, ‘I know how often you visit your family.'”

Fabian contacted the police and Polymarket, which removed the offending accounts from its platform.

The rise of prediction market insider trading has led the U.S. government to take action. In March, the White House warned staffers not to place bets on prediction markets using nonpublic information.

Late last month, the U.S. Senate passed a resolution banning its members from participating in prediction markets. “Serving in Congress is an honor, not a side hustle,” Sen. Bernie Moreno (R-Ohio), the bill’s sponsor, posted on social media. “Americans deserve to know that their leaders are here for the right reason.”

In April, Kalshi banned three U.S. congressional hopefuls who bet on their races, which Kalshi prohibits, calling it “political insider trading.”

“Just like in traditional financial markets, bad actors will try to cheat,” said Kalshi. “Regulated exchanges must constantly evolve and adapt their systems to address insider threats.”

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