War markets are a national-security threat.
Ayatollah Ali Khamenei was not, it’s safe to assume, a devoted Polymarket user. If he had been, the Iranian leader might still be alive. Hours before Khamenei’s compound in Tehran was reduced to rubble last week, an account under the username “magamyman” bet about $20,000 that the supreme leader would no longer be in power by the end of March. Polymarket placed the odds at just 14 percent, netting “magamyman” a profit of more than $120,000.
Everyone knew that an attack might be in the works—some American aircraft carriers had already been deployed to the Middle East weeks ago—but the Iranian government was caught off guard by the timing. Although the ayatollah surely was aware of the risks to his life, he presumably did not know that he would be targeted on this particular Saturday morning. Yet on Polymarket, plenty of warning signs pointed to an impending attack. The day before, 150 users bet at least $1,000 that the United States would strike Iran within the next 24 hours, according to a New York Times analysis. Until then, few people on the platform were betting that kind of money on an immediate attack.
Maybe all of this sounds eerily familiar. In January, someone on Polymarket made a series of suspiciously well-timed bets right before the U.S. attacked a foreign country and deposed its leader. By the time Nicolás Maduro was extracted from Venezuela and flown to New York, the user had pocketed more than $400,000. Perhaps this trader and the Iran bettors who are now flush with cash simply had the luck of a lifetime—the gambling equivalent of making a half-court shot. Or maybe they knew what was happening ahead of time and flipped it for easy money. We simply do not know.
Polymarket traders swap crypto, not cash, and conceal their identities through the blockchain. Even so, investigations into insider trading are already underway: Last month, Israel charged a military reservist for allegedly using classified information to make unspecified bets on Polymarket.
The platform forbids illegal activity, which includes insider trading in the U.S. But with a few taps on a smartphone, anyone with privileged knowledge can now make a quick buck (or a hundred thousand). Polymarket and other prediction markets—the sanitized, industry-favored term for sites that let you wager on just about anything—have been dogged by accusations of insider trading in markets of all flavors. How did a Polymarket user know that Lady Gaga, Cardi B, and Ricky Martin would make surprise appearances during the Super Bowl halftime show, but that Drake and Travis Scott wouldn’t? Shady bets on war are even stranger and more disturbing. They risk unleashing an entirely new kind of national-security threat. The U.S. caught a break: The Venezuela and Iran strikes were not thwarted by insider traders whose bets could have prompted swift retaliation. The next time, we may not be so lucky.
The attacks in Venezuela and Iran—like so many military campaigns—were conducted under the guise of secrecy. You don’t swoop in on an adversary when they know you are coming. The Venezuela raid was reportedly so confidential that Pentagon officials did not know about its exact timing until a few hours before President Trump gave the orders.
Any insiders who put money down on impending war may not have thought that they were giving anything away. An anonymous bet that reeks of insider trading is not always easy to spot in the moment. After the suspicious Polymarket bets on the Venezuela raid, the site’s forecast placed the odds that Maduro would be ousted at roughly 10 percent. Even if Maduro and his team had been glued to Polymarket, it’s hard to imagine that such long odds would have compelled him to flee in the middle of the night. And even with so many people betting last Friday on an imminent strike in Iran, Polymarket forecasted only a 26 percent chance, at most, of an attack the next day. What’s the signal, and what’s the noise?
In both cases, someone adept at parsing prediction markets could have known that something was up. “It’s possible to spot these bets ahead of time,” Rajiv Sethi, a Barnard College economist who studies prediction markets, told me. There are some telltale behaviors that could help distinguish a military contractor betting off a state secret from a college student mindlessly scrolling on his phone after one too many cans of Celsius. Someone who’s using a newly created account to wager a lot of money against the conventional wisdom is probably the former, not the latter. And spotting these kinds of suspicious bettors is only getting easier. The prediction-market boom has created a cottage industry of tools that instantaneously flag potential insider trading—not for legal purposes but so that you, too, can profit off of what the select few already know.
Unlike Kalshi, the other big prediction-market platform, Polymarket can be used in the U.S only through a virtual private network, or VPN. In effect, the site is able to skirt regulations that require tracking the identities of its customers and reporting shady bets to the government. In some ways, insider trading seems to be the whole point: “What’s cool about Polymarket is that it creates this financial incentive for people to go and divulge the information to the market,” Shayne Coplan, the company’s 27-year-old CEO, said in an interview last year. (Polymarket did not respond to a request for comment.)
Consider if the Islamic Revolutionary Guard Corps had paid the monthly fee for a service that flagged relevant activity on Polymarket two hours before the strike. The supreme leader might not have hosted in-person meetings with his top advisers where they were easy targets for missiles. Perhaps Iran would have launched its own preemptive strikes, targeting military bases across the Middle East. Six American service members have already died from Iran’s drone attacks in the region; the death toll could have been higher if Iran had struck first. In other words, someone’s idea of a get-rich-quick scheme may have ended with a military raid gone horribly awry. (The Department of Defense did not respond to a request for comment.)
Maybe this all sounds far-fetched, but it shouldn’t. “Any advance notice to an adversary is problematic,” Alex Goldenberg, a fellow at the Rutgers Miller Center who has written about war markets, told me. “And these predictive markets, as they stand, are designed to leak out this information.” In all likelihood, he added, intelligence agencies across the world are already paying attention to Polymarket. Last year, the military’s bulletin for intelligence professionals published an article advocating for the armed forces to integrate data from Polymarket to “more fully anticipate national security threats.” After all, the Pentagon already has some experience with prediction markets. During the War on Terror, DARPA toyed with creating what it billed the “Policy Analysis Market,” a site that would let anonymous traders bet on world events to forecast terrorist attacks and coups. (Democrats in Congress revolted, and the site was quickly canned.)
Now every adversary and terrorist group in the world can easily access war markets that are far more advanced than what the DOD ginned up two decades ago. What makes Polymarket’s entrance into warfare so troubling is not just potential insider trading from users like “magamyman.” If governments are eyeing Polymarket for signs of an impending attack, they can also be led astray. A government or another sophisticated actor wouldn’t need to spend much money to massively swing the Polymarket odds on whether a Gulf state will imminently strike Iran—breeding panic and paranoia. More fundamentally, prediction markets risk warping the basic incentives of war, Goldenberg said. He gave the example of a Ukrainian military commander making less than $1,000 a month, who could place bets that go against his own military’s objective. “Maybe you choose to retreat a day early because you can double, triple, or quadruple your money and then send that back to your family,” he said.
Again, we don’t know for sure whether any of this is happening. That may be the scariest part. As long as Polymarket lets anyone bet on war anonymously, we may never know. Last Saturday, the day of the initial Iran attack, Polymarket processed a record $478 million in bets, according to one analysis. All the while, Polymarket continues to wedge itself into the mainstream. Substack recently struck a partnership with Polymarket to incorporate the platform’s forecasts into its newsletters. (“Journalism is better when it’s backed by live markets,” Polymarket posted on X in announcing the deal.) All of this makes the site even more valuable as an intelligence asset, and even more destructive for the rest of us. Polymarket keeps launching more war markets: Will the U.S. strike Iraq? Will Israel strike Beirut? Will Iran strike Cyprus? Somewhere out there, someone likely already knows the answers.
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Comments
For whatever it's worth, Kalshi refused to pay out on the bet because Khomenei died, and they refuse to allow people to profit off of death so they returned everyone's bets.
https://xcancel.com/mansourtarek_/status/2029996077554815268
While I think this policy removes one avenue of incentivizing death of real people (many bets involving real people can probably be resolved by some sort of assassination attempt), I honestly think the whole concept of betting on real world events is ludicrous to begin with, including sports. It always incentivizes behavior that doesn't naturally occur (the trope of fixing horse races comes to mind).
By PaulRobinson 2026-03-0723:04 Just this afternoon I was reading an account of one of the earliest known betting ledgers, the "Betting Book" at White's, a private member's club in London. In the 18th century, one of the most common bets taken up by members was which Lord or nobleman would outlive another. One bet had a note under it that the wager was not settled up by the bettors because the subjects both died of suicide within a few months of each other.
By arjie 2026-03-0722:44 Well, certainly, if they had chosen otherwise it is unlikely they could have continued to operate:
> ...the Commission may determine that such agreements, contracts, or transactions are contrary to the public interest if the agreements, contracts, or transactions involve—(I) activity that is unlawful under any Federal or State law; (II) terrorism; (III) assassination; (IV) war; (V) gaming; or (VI) other similar activity determined by the Commission, by rule or regulation, to be contrary to the public interest.
By Paracompact 2026-03-0723:501 reply I'm unfamiliar with Kalshi's ethics. Would they have paid out if only non-famous human beings died in the ousting?
By abustamam 2026-03-081:52 Not sure. For the record I don't think of Kalshi as an ethical company. I just found it interesting that it's the only company that seems to be getting press coverage for refusing to pay out because of this.
By Paradigma11 2026-03-0817:302 reply On the other hand this possibly forces people to put their mouth where their money is. It would be great to be able to hold all those politicians and pundits at least financially accountable. Oh,so you say that this spending is not going to be a problem because the economy will grow twice that much. Sooo, how much did you bet on that? And how did your bets go last year.
By VirusNewbie 2026-03-0916:57 Definitely interesting idea given how lockstep parties operate. Ostensibly representatives should be uh, representing local interests, over party, but we've seen this isn't the case.
So if one side is claiming something, yes, would absolutely love to see how much of their net worth is tied into betting that something would come to fruition (like lowering inflation, or medical care, or increasing jobs, etc)
By abustamam 2026-03-0818:23 That's actually a great idea!
By markus_zhang 2026-03-0723:18 I guess it is just human nature to gamble on everything, anything. And when government puts down a heavy hand they turn to more lucrative underground shops.
By whycome 2026-03-0723:26 I always thought that "Gray's Sports Almanac" in Back to the Future 2 would quickly become useless as all sorts of factors after large public bets would cause events to change and sports scores just wouldn't line up anymore.
Nitter instance for Twitter/X. https://github.com/zedeus/nitter
By xeromal 2026-03-0722:35 Thank you! Nitter looks great.
By foodforpokemon 2026-03-0722:40 Only bets on fake world events?
The author spends the first paragraph of the article talking about how n number of users bet x on a specific outcome and they won. They fail to account for the many others who bet on a different outcome and lost.
I watched polymarket like a hawk for weeks before the attack and am incredibly familiar with the numbers. Fact is, there were no indications on Polymarket that an attack was happening that morning. The chances of an attack was like 10 percent if I remember correctly.
Right, the probability pre-attack never broke even 30%, which was basically in line with the most prominent opinions. The market consensus had been for a long time that there would be an attack by this summer or the end of the year, but probably not near-term. There will always be some bull traders who buy just before a big move in the market, that's no proof of insider trading.
By tasuki 2026-03-087:30 > that's no proof of insider trading.
It isn't. But also the whole point of prediction markets is to allow insiders to profit in return for providing valuable information.
I like this post on Reddit/r/MarkMyWords:
MMW: The US will strike Iran before March 2nd, 2026
https://www.reddit.com/r/MarkMyWords/comments/1rgjwpu/mmw_th...
By beacham 2026-03-093:30 Wow. What a post.
By lenerdenator 2026-03-0723:19 These sorts of things are in their infancy.
Give people enough time, and they'll start figuring out more and more ways to try to predict the markets given observations of the real world. Some will fail, but some will definitely succeed.
By Footnote7341 2026-03-0720:329 reply Isnt this silly when you can calculate the chance of war in Iran by oil futures instead. Prediction markets are just explicit markers of information that is already being traded on in 100 different ways.
By jimkleiber 2026-03-0720:351 reply Yeah but less direct incentive than "If my friends (and I) bet money on X, and I do X, they (and I) make money."
Not by much, plus the volume is much lower on prediction markets, so people with large pockets who happen to be in power and are capable of doing big moves like this would make more money on the oil futures.
By pinkmuffinere 2026-03-0721:481 reply I wonder if there's profit to be made by looking at the futures markets, figuring out the implied probability distribution of different events, and then buying prediction markets when there's a mis-match? There sure are many inexperienced players entering predictions markets, just waiting to be fleeced...
That's one of the intended uses of prediction markets! Although much like cryptocurrency arbitrage i assume the margins are small and will quickly be eaten by bigger fish.
By pinkmuffinere 2026-03-0722:48 Huh interesting. I suppose markets with low volume would tend to be the most profitable opportunities in that case? But then maybe they’re low volume because it’s hard to say what will happen…
By jimkleiber 2026-03-0913:01 Perhaps for people who have large sums of money, they don't tend to play in high risk bets anyways, they don't need to. Large sums make large sums on small percentage movement. Most people don't have enough money to make large sums on small percentage increase, id assume this route makes more sense for like the vast majority of humans, especially the ones who have access to privileged, often government, information.
By thinking_cactus 2026-03-0723:36 I agree in some ways.
Like, I think in a way it's just not viable to patch every little loophole a corrupt or morally bankrupt administration could exploit and all damage it could cause, and probably not without making the administration itself useless. It's a still a good idea to patch as much as feasible, in part to if slightly discourage the worse from seeking power in the first place. But in a way, it's garbage in, garbage out. Laws will never be able to magically turn corrupt and misguided decisions into ever good ones. The robust solution is promoting wisdom, ethics, civility and education, so people make good democratic choices for themselves and others.
Yes, but they are saying that if you allow economic hedging, you are also allowing gambling - just a bit more indirectly.
By breppp 2026-03-0721:46 maybe, but that is a by product of a real function (hedging). The reason prediction markets deal with news is so they can attract gamblers. Also compare marketing efforts of prediction markets and SEC control of real markets
By geysersam 2026-03-0722:50 It's a big difference. There's vastly less chance someone manages to expose state secrets through their bets on oil futures. The volume is higher, and the prediction is less specific.
By tlb 2026-03-0721:56 Oil prices are affected by many other things too. It's valuable to isolate individual factors.
By alephnerd 2026-03-0721:32 > Isnt this silly when you can calculate the chance of war in Iran by oil futures instead
This is why I'm opposed to prediction markets - they're gamified futures contracts (unsurprising given the founders at Kalshi are ex-Citadel and why Intercontinental Exchange executed growth equity rounds with Polymarket). A lot of degenerate gamblers are basically being taken to the cleaners as they lack the experience to actually mitigate risk or understand how to strucure futures contracts.
And an actual insider has much easier and much more legally defensible alternatives to conduct insider trading than using a platform that has KYC requirements.
I hope everyone reading this realizes that commodity futures are useful and easily distinguished from prediction markets, which are a ruse to get around restrictions on gambling.
The world did fine before derivatives. In fact some might say it did even better. And gambling only makes the wealth gap worse. And there is a ton of nasty incentives linked to it.
By JumpCrisscross 2026-03-081:011 reply > world did fine before derivatives
The Hittites and Bronze-Age Egyptians had forward-deliverable contracts that, if you squint, they would trade amongst each other. The idea of being able to assign a contract to a third party to which you're a beneficiary is about as old as civilisation. In part because it's obvious. In part because it's impossible to police. But mostly because it's useful.
(I'm ignoring insurance and reinsurance, both of which are derivatives and rely heavily upon them.)
By JumpCrisscross 2026-03-082:37 > scale of things was much different back then
"Scale back derivatives" is a reasonable argument. "Ban derivatives" is silly.
> Not comparable
Totally comparable. I'm actually struggling to think of an infrastructure-building civilisation in history that didn't have some form of tradable forwards.
Nonsense. Derivatives have been actively traded in the USA at least since 1848 (and even earlier in other countries). Nothing was better about the world in 1847.
By egberts1 2026-03-0812:20 The Dutch? Early 1500s?
That is what my reading recollection is recalling on 'derivative-like".
By anshabs 2026-03-0723:05 Incase you missed this in the Epstein files:
> This is the way the jew make money.. and made a fortune the past ten years, selling short the shipping futures, let the goyim deal in the real world.
One instance obviously, but not often do you hear them say the quiet part out loud. Most of the times it’s just firms profiting off hardship and/or prior knowledge, which is easy to hide.
By gos9 2026-03-080:23 Who’s “we”?
You or I certainly don’t have a say in this
By JumpCrisscross 2026-03-0721:181 reply Don’t think so. A lot of peoples’ first reaction to something they don’t understand is to try and make it go away.
A lot of people reaction to understanding what derivatives are are also to try and make them go away. Thinking derivatives are legalized gambling, and being against gambling entirely, doesn't require a lack of understanding of derivatives to be against them.
By JumpCrisscross 2026-03-081:02 > thinking derivatives are legalized gambling, and being against gambling entirely, doesn't require a lack of understanding of derivatives to be against them
No, but anyone who has an introductory knowledge of derivatives and their history will know of the Onion Futures Act, which banned "the trading of futures contracts on onions" to predictable (albeit long term) effects.
Broadly speaking, the less someone knows about derivatives and the further their work is from the production of any good (versus services), the more likely they are to get upset about it.
[1] https://en.wikipedia.org/wiki/Onion_Futures_Act#cite_note-fo...
The White House has admitted that Israel had actionable intelligence that several of the Iranian political leadership were having a physical meeting together and they decided to attack to decapitate the government. The US decided to attack Iranian capabilities preemptively to reduce the inevitable response to US military, embassies, and allies in the region.
By voganmother42 2026-03-081:17 Striking schools and killing school children has not reduced the inevitable response.
By mullingitover 2026-03-0722:073 reply It’s bad enough the politicians lied when they campaigned on no more wars in the Middle East, they don’t need to insult our intelligence with these moronic cover stories.
If they didn’t want Israel dragging the US into wars they could’ve just placed a call to Iran to warn them.
By thephyber 2026-03-0914:00 I see the White House adopting the strategy that the Russian and USSR government / state media use frequently: change the narrative early and often, to the point where people don’t feel like they can ever know the truth.
The downing of flight MH-17 as reported by Russian media was instructive. https://www.atlanticcouncil.org/blogs/ukrainealert/russian-m...
I also frequently refer back to why Russian language has 2 different words for truth: istina and pravda.
By Dylan16807 2026-03-085:561 reply > they could’ve just placed a call to Iran to warn them
Deciding not to betray your ally isn't a "moronic cover story".
If you're going to portray that as the alternative you actually make their actions sound more reasonable.
By mullingitover 2026-03-086:421 reply If your “ally” is, as this story goes, forcing you into a war against your will, protecting your own citizens and troops takes priority over any favors you might owe these “friends.”
Of course if you actually wanted to start this war, and wanted a low effort cover story, you’d…do exactly this kind of lazy, low effort lie.
By Dylan16807 2026-03-087:151 reply What are you even calling a lie? (not the campaign promises, the recent statements) The claims are something like this, right?: 1. Israel decided to attack 2. The US thought about how that would play out. 3. The US decided to attack too.
Which of those claims is untrue? Is there a claim I missed?
"The US could have snitched to Iran" does not contradict any of those claims.
Also I'm not convinced that warning Iran would have made things much safer for US troops. And you can say what you want about what the US priorities should be, but that's a whole different discussion.
By mullingitover 2026-03-087:521 reply The US claim is that their attack is a sort of pre-emptive self-defense because Israel forced their hand. That’s what I’m calling a lie: Israel could’ve been dissuaded, trivially, if the US didn’t want to start a war with Iran.
By Dylan16807 2026-03-088:131 reply Their hand was forced, and it was "a sort of pre-emptive self-defense". I'm still not seeing the lie. You think they should have done something different, but "should have done something different" is a completely different criticism.
And what you think is "trivial" is far from certain.
By mullingitover 2026-03-088:261 reply > I'm still not seeing the lie
It’s an absolute howler that the United States would be led around by the nose by a country smaller than New Jersey. C’mon, man. You honestly believe that the massive military buildup that preceded this was just a wild coincidence?
If the Israelis were actually pushing the US around in the way we’re supposed to believe in this story the US would absolutely ruin them in a heartbeat. Netanyahu would be in prison in a timeframe measured in hours.
By Dylan16807 2026-03-089:041 reply Pushing the US to make some kind of decision isn't the kind of "pushing around" that would make the US attack Israel. Your ideas of alternate ways for this to play out have gone from weird to absolutely ridiculous.
The US might have already decided it was going to attack, but it just as easily might not have.
By mullingitover 2026-03-0819:021 reply I’m sorry but this is simply an unserious argument.
By Dylan16807 2026-03-0819:161 reply It's plenty serious. You don't like how they acted and how they gave partial explanations so you're calling it an obvious lie even though it's not.
They didn't say it was their absolute only option or something like that, as far as I know. (If they did say that you needed to mention it.) That would have been a clear lie. Saying Israel moved first is just... plausible.
By mullingitover 2026-03-0821:491 reply > You don't like how they acted
I don't like having my intelligence insulted by such brazen falsehoods, so in that regard this is true.
I'm happy for your heroic amounts of credulity, it must make life a lot easier in this administration.
By Dylan16807 2026-03-0823:32 >> You don't like how they acted
> I don't like having my intelligence insulted by such brazen falsehoods, so in that regard this is true.
Okay I guess I assumed you disliked the stuff you were calling a lie and a moronic cover story.
> I'm happy for your heroic amounts of credulity, it must make life a lot easier in this administration.
It's not that I'm being very credulous, it's that they said very little about their decision process. The claims you're objecting to are relatively minor details about the situation. You keep exaggerating the implications of their claims every time you say why they must be wrong.
We live in a post truth age, unfortunately. Many citizens are happy to only hew to the truth that they want, versus the "real" truth. (note the quotes -- truth is tricky).
There's a bitter irony in this issue -- toppling the regime in Iran would be a wonderful thing, but doing so via bombs is not the way. We have Afghanistan and Iraq as very dear lessons in how not to do it.
You think that type of network stays within one administration?
Political sex blackmail has been a problem.
Absolutely, but the current administration is a whole new level of WTF. I've followed US politics for half a century and this feels like through the looking glass stuff.
By DANmode 2026-03-0722:59 Something’s definitely fucked.
By _menelaus 2026-03-0913:02 This administration seems especially compromised, servile and obsequious. But you're right, both sides of the aisle have been successfully targeted for years. Both sides really don't want the unredacted files to come to light, but Trump least of all.
No idea why you're being downvoted, there is a mountain of evidence that this is the case. We are doing this because of Israel.
Marco Rubio said outright we went in because of Israel. Just watch Trump's speeches, he literally talks about the power of the Israel lobby and hopes he is doing a good job for them. Netanyahu has visited Trump 7 times in the last year, each visit has been leading up to this move. Trump's biggest mega donors are Israeli dual citizens with strong ties to their home country. Miriam Adelson, Sheldon Adelson, Larry Elison (who has conveniently taken control of the TikTok algorithm and banned the phrase "#freepalestine" through his connection with Trump) have donated hundreds of millions for this exact outcome. These donors have direct ties to the Israeli government.
https://www.aljazeera.com/news/2025/10/13/who-is-miriam-adel...
There is very little evidence that the strikes are being driven by oil, in fact oil is the perfect excuse to use as cover. It was the exact same thing with the Iraq war. Iraq and Iran were the two largest threats to Israel, we went into Iraq to regime change them and now we are finishing the job with Iran. Now there are no threats to Israel's expansion to the rest of the middle east. The ruling party (Likud) supports the Greater Israel project, which aims to expand Israel's borders to Egypt, Saudi Arabia, Syria, Iraq, and Lebanon.
I'm assuming that it's assumed that I'm slagging on Israel for some irrational hate -- I'm not. I'm commenting based upon reports that I've seen (effectively what you're referred to), not on ideology or feellings.
Thanks for having my back! I think of HN as a community of intelligent people and it's always disappointing to be reminded that that alone is no guarantee of healthy discourse.
By thephyber 2026-03-0914:04 Looking back at this, I’m confused why my comment was a reply to yours. I suspect I used the reply link on the wrong comment.
By Footnote7341 2026-03-093:07 That has nothing to do with the point of my post.
