Suspicious Betting on Polymarket: Insider Trading or Just Luck?
An unusually high percentage of winning large bets related to military actions has been recorded on the prediction platform Polymarket. This is reported in a study by the Anti-Corruption Data Collective, which analyzes signs of insider trading in prediction markets.
Researchers examined completed markets on Polymarket and identified so-called longshot bets: wagers of $2500 or more with an outcome probability below 35%. On average, such bets won about 14% of the time across the platform.
However, in political markets, the success rate of such bets was 25%, and in the segment related to defense and military actions, this figure rose to 52%.
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Although Polymarket and its competitor Kalshi formally prohibit insider trading, the very nature of prediction markets suggests that more informed participants can enhance the accuracy of market expectations.
The authors of the study also note signs of insider trading in markets related to culture and sports, where there has been an "explosive growth of high-accuracy bets."
According to the authors, the prediction market needs government regulation, including mandatory identification of participants, freezing payouts on suspicious bets, and assessing conflicts of interest.
