Millions of dollars are being wagered on global political events through online prediction markets, raising concerns about insider trading. Platforms like Polymarket and Kalshi have seen a surge in activity, with around 370,000 users betting over $90 million on politics at Polymarket alone, according to data from Dune Analytics analysed by The Washington Post.
Kalshi reports approximately $129 million at stake on political events, though it prohibits bets on direct military action. Many wagers focus on US politics and Donald Trump, including foreign interventions and domestic matters such as the content of his State of the Union address. Bets on Kristi Noem being the first fired cabinet member surged after her defence of a fatal shooting.
Polymarket has added contracts on geopolitical events like a Chinese invasion of Taiwan, Russian gains in Ukraine, and US military action in Colombia and Cuba. The increasing sums have heightened insider trading fears, especially after a trader won over $400,000 betting on Nicolas Maduro's ouster, with Polymarket appearing to anticipate his capture.
New York Congressman Ritchie Torres has introduced a bill to ban government employees from betting on events they could influence, comparing it to financial insider trading. 'If you're both a government insider and a participant in the prediction market, you now have a perverse incentive to push for policies that will line your pockets,' Torres told The Wall Street Journal.
Experts warn that such betting may violate the 1936 Commodity Exchange Act, which prohibits wagers on terrorism, assassination, or war. Polymarket is banned in over 30 countries, including the US, UK, Australia, France, Italy, and Ukraine.
