Israeli Soldiers Accused of Using Polymarket to Bet on Strikes

[demmiblue]

Source: WSJ

Shin Bet, the country’s internal security agency, said Thursday the suspects used information they had come across during their military service to inform their bets.

One of the reservists and a civilian were indicted on a charge of committing serious security offenses, bribery and obstruction of justice, Shin Bet said, without naming the people who were arrested.

Polymarket is a so-called prediction market that lets people place bets to forecast the direction of events. Users wager on everything from the size of any interest-rate cut by the Federal Reserve in March to the winner of League of Legends videogame tournaments to the number of times Elon Musk will tweet in the third week of February.

The arrests followed reports in Israeli media that Shin Bet was investigating a series of Polymarket bets last year related to when Israel would launch an attack on Iran, including which day or month the attack would take place and when Israel would declare the operation over.

Read more: https://www.wsj.com/world/middle-east/israeli-soldiers-accused-of-using-polymarket-to-bet-on-strikes-72d53012?st=WX5EDN&reflink=desktopwebshare_permalink

[JudyM]

1. Great that they investigated and prosecuted, glad it was just "several" people doing it. Interesting counterpoint to US.

Another bettor netted more than $400,000 after placing a wager that Nicolás Maduro would soon be out as Venezuela’s leader less than five hours before nighttime explosions rocked the capital of Caracas. The bet on Maduro fueled suspicions that someone used inside knowledge of the closely held U.S. operation to make a quick profit.

...

Several U.S. lawyers specializing in prediction markets said the Israeli arrests marked the first time that they were aware of anyone being arrested for insider trading on one of the platforms.

[William Seger]

2. I played on predictit.org for a while, but those "markets" are just easy to exploit

There are various ways to exploit bidding markets which the stock exchanges try very hard to detect, but those prediction markets have virtually no monitoring for manipulation, so insider information or price manipulation can net you a bundle. Like stocks, if you sell your bet for more than you paid, you can make money even if your prediction proves to be incorrect in the end.