New Data Shows Evidence of Political Insider Trading on Prediction Markets

According to an analysis of 400,000 markets listed on Polymarket from January 2021 to March 2026 by the Anti-Corruption Data Collective, a non-profit research and advocacy group, long-shot bets—defined as wagers of $2,500 or more at odds of 35 percent or less—had an average win rate of around 52% in markets on military and defense actions. That was more than 3.5 times higher than the average for all markets on the platforms.

Politics-focused markets, including those involving political speeches, elections and government appointments as well as military and defense actions, had an overall win rate of 25%, nearly twice the overall average.

Political markets, where outcomes can be determined by a small number of decision makers, are “structurally vulnerable to insider trading,” the researchers said, according to a Financial Times report reproduced by Ars Technica.  The dynamic not only threatens information security but also “disadvantages regular bettors,” the analysts added.

Markets on political and military events were not the only category that saw disproportionate win rates in the ACDC analysis. Markets on cultural events, such as competition winners or music releases, also showed evidence of suspicious wagers, with 29 percent of long-shot bets in these markets paying off. Nobel Peace Prize organizers investigated a potential leak last year after online betting surged in favor of Venezuelan opposition leader María Corina Machado just hours before she was announced as the winner.

Read more: Wisconsin Becomes Latest State Seeking to Rein In Prediction Markets

The ACDC report comes as regulators and policymakers are focusing heightened scrutiny on the markets. On Thursday, the U.S. Senate passed a resolution prohibiting members from trading on prediction markets, following concerns about possible of insider trading on the platforms. The ban was passed by unanimous consent and takes effect immediately.

The new data, along with the indictment of U.S. Army officer Gannon Ken Van Dyke, is also likely to add fuel to the already heated conflict between state regulators and the federal Commodity Futures Trading Commission over jurisdiction to oversee the markets.

Last week, Wisconsin became the latest state to take action against the markets, filing lawsuits against Polymarket, Kalshi, Robinhood, Crypto.com, and Coinbase, alleging they operate illegal gambling sites due to the prominence of sports-related wagering on the platforms, which comprises as much as 90% of their total trading volumes. The Wisconsin lawsuits came just days after New York State filed similar actions against Coinbase and Gemini.

CFTC, however, claims to have exclusive jurisdiction to regulate the platforms it defines as futures exchanges under the Commodity Exchange Act (CEA). The agency immediately sued both New York and Wisconsin for seeking to circumvent the CEA by taking regulatory action against the platforms. CFTC previously sued Arizona, Connecticut and Illinois on similar grounds.

The ACDC data on possible insider trading and the charges against Van Dyke are certain to raise questions about how well the CFTC is policing the platforms, however. Van Dyke, who was involved in the raid that seized former Venezuelan president Nicolás Maduro, is charged with placing 13 bets worth $33,000 that netted him more than $400,000.

In a post on X Polymarket said Van Dyke’s arrest was “proof the system works,” adding that when it identified “a user trading on classified government information,” it referred the matter to the Justice Department and cooperated with their investigation.