Polymarket Faces Insider Trading Allegations Following Military-Linked Betting Anomalies

Research from the Anti-Corruption Data Collective (ACDC) indicates that Polymarket may be plagued by insider trading, particularly within its military and defense categories. The nonprofit analyzed over 435,000 settled contracts from January 2021 to March 2026, totaling $54.4 billion in cumulative volume, finding that low-probability bets on defense outcomes win at rates significantly higher than those in political markets. While typical 'longshot' bets in political markets succeed roughly 14% of the time, success rates for military-linked contracts have topped 50% in certain instances. ACDC argues that these markets are uniquely susceptible to information asymmetries because they rely on non-public government policies and specialized knowledge, allowing a small group of informed traders to consistently outperform the general public. The report highlights the June 2025 U.S. strikes on Iran as a primary case study. Despite the Pentagon's efforts to keep the operation covert using decoy bombers and stealth aircraft, 19 longshot bets totaling $164,292 were placed just hours before the strike. This resulted in approximately $1.8 million in profits for eight wallets, with one individual netting nearly $500,000. These findings align with previous research from Yale and London Business School, which noted that 3% of traders drive most price discovery, and Solidus Labs data showing 1% of wallets capture half of all gains. Polymarket has defended its practices, citing its surveillance teams and cooperation with the Department of Justice regarding a previous case involving a Green Beret. ACDC is now calling for stricter identity verification for bettors, conditional payouts for suspicious wagers, and a broader evidence-informed debate on whether the public should be permitted to bet on sensitive government outcomes at all.