Polymarket Insider Trading Concerns Rise After Report on Military Betting Patterns

A new report is raising fresh concerns about potential insider trading on prediction markets after analyzing millions of dollars in bets tied to military events. The Anti-Corruption Data Collective (ACDC), a nonprofit research group, reviewed more than 435,000 Polymarket contracts from January 2021 to mid-March 2026, covering a total trading volume of $54.4 billion. Its findings suggest that certain traders may be benefiting from information advantages not available to the general public.

According to the report, longshot bets—wagers with low implied probability—typically succeed about 14% of the time in political markets. However, in markets linked to military and defense outcomes, success rates have exceeded 50% in some cases. Researchers argue that these markets are harder to predict using publicly available information, making them more vulnerable to insider knowledge or information asymmetry.

The study also highlights how profits on Polymarket are highly concentrated. Previous research from London Business School and Yale found that just 3% of traders drive most price discovery, while blockchain analytics firm Solidus Labs reported that fewer than 1% of wallets capture nearly half of all profits. ACDC’s findings suggest that this edge may stem from access to non-public or specialized information.

One notable example cited is the June 2025 U.S. strike on Iran. In the hours before the strike, a small group of traders placed 19 longshot bets totaling over $164,000 on contracts that later resolved in their favor. These bets generated approximately $1.8 million in profits, with one wallet earning nearly $500,000. This occurred despite the Pentagon’s efforts to conceal the operation through advanced military tactics.

Polymarket maintains that it prohibits trading based on confidential information and works with regulators, including the Department of Justice. Still, the report calls for stricter safeguards, including identity verification, limits on highly specific contracts, and closer scrutiny of suspicious trades. The findings have sparked broader debate over whether betting on sensitive geopolitical and military events should be allowed at all.