A major bet on Nicolás Maduro's capture before the Venezuelan president was seized in an American military raid shows how prediction markets pose a controversial new opportunity for insiders to profit on secret information.
Why it matters: Insider trading on the stock market is illegal, while insider trading on prediction markets is generally not — at least for now — and critics say that's a problem.
State of play: The emergence of prediction markets like Kalshi and Polymarket has spawned several high-profile examples of suspicious trading.
- One newly created account on Polymarket invested $30,000 Friday on Maduro's exit, pocketing $436,760 after he was captured.
- In December, someone made nearly $1 million on Polymarket after winning 22 of 23 bets on what topics would rank on Google's annual list of the most searched terms, according to iGamingToday.
- Several accounts reportedly earned a big haul in late 2025 with bets on the timing of OpenAI's product release.
What they're saying: "It just defies belief that this wasn't insider information," gambling industry consultant Dustin Gouker tells Axios of the Maduro bet.
- Polymarket and reps for the Commodity Futures Trading Commission, which regulates prediction markets, did not respond to requests for comment.
Between the lines: Trading on inside information might be against the rules on prediction market platforms, but that doesn't mean it's against the law.
The latest: A House Democrat is now introducing a bill that would make such trading illegal for government officials, Axios' Andrew Solender reports.
- Rep. Ritchie Torres (D-N.Y.) has introduced the Public Integrity in Financial Prediction Markets Act of 2026, which would align the law for prediction-markets with existing bans on insider stock trading applied to corporate executives and other investors.
- It's not clear if Torres' bill would be brought up for a vote in the House or if President Trump would sign it.
The other side: Some prediction market advocates say insider trading can provide useful indicators to the public on key matters.
- Alex Nowrasteh, the Cato Institute's senior VP of policy, said on X that the suspected inside trading was "a feature, not a bug. And it is a social good."
- "We see more and more prediction markets leaning into this idea that insider trading is good," Gouker says. "We learned arguably that all of this was happening before it happened."
Reality check: Just because someone made a lot of money on the Maduro bet doesn't necessarily mean it was a government insider.
- Gouker noted in his newsletter, Event Horizon, that news of the planned raid had leaked to multiple media outlets, posing "the possibility that someone outside of government used the information to trade on it."
Threat level: Markets that are vulnerable to insider trading may also be vulnerable to manipulation for counterintelligence purposes.
- In the same way that an insider could make money on anticipating a military operation, governments could flood prediction markets with money to mislead their enemies into believing that an attack is imminent in a location where it is not.
Yes, but: An Army paper published in July noted that prediction markets could also be useful to military strategists.
- "While specific terrorist attacks are difficult to predict, contracts that gauge the overall activity levels of terrorist organizations or insurgent groups can be informative," according to the report, saying that prediction markets could "help intelligence analysts allocate resources and anticipate threats."
The bottom line: Awareness of the money-making opportunity posed by prediction markets is only beginning to grow — and so is the backlash.
