Israelis accused of using military secrets to place Polymarket bets : NPR

An example of Polymarket’s discussions on military operations between Israel and Iran. Israeli prosecutors have not identified which specific occupations are being investigated.

Polymarché / Screenshot by NPR

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Polymarché / Screenshot by NPR

Israeli authorities have arrested several people and charged two on suspicion of using classified information to bet on military operations on the popular prediction market platform Polymarket.

Prosecutors say a civilian and military reservist have been charged with corruption and obstruction of justice, and an undisclosed number of others have also been arrested for placing bets on Polymarket based on classified information, according to a statement released Thursday by Tel Aviv officials.

Although the names of those charged and the specific bets they made have not been disclosed, the announcement comes weeks after Israeli media reported that security agencies were investigating whether military officials were turning secret intelligence about military strikes into bets on Polymarket.

Kan News, Israel’s public broadcaster, reported last month that government investigators were looking into Polymarket’s bets on an Israeli strike on Iran in June 2025, when the two countries were waging a 12-day war.

Polymarket did not return a request for comment.

Prediction markets have grown in popularity in recent months. The apps allow people to place high bets on the outcome of future events, whether it’s a basketball game, the phrases President Trump will use at his next press conference, or the election results.

These charges constitute the first publicly known case of arrests linked to a predictive market bet allegedly made using military secrets.

In January, a Polymarket trader turned a $32,000 bet into a $400,000 win after correctly guessing that the United States would overthrow Venezuelan leader Nicolás Maduro before the move was made public.

Although the transaction sparked debate over insider trading on the platform, US authorities remained tight-lipped about whether it was carried out by someone misusing military information, or simply by a punter with a particularly opportune bet.

During Trump’s second term, the prediction market’s two dominant sites, Polymarket and Kalshi, received a warm reception in Washington, as Trump officials dropped lawsuits filed against the companies during the Biden era and vowed to defend the industry’s right to exist in court.

But the two sites have notable differences.

For example, most trades on Kalshi are made with US dollars, while Polymarket traders tend to bet with cryptocurrencies.

Kalshi is regulated by the Commodity Futures Trading Commission, which prohibits betting involving wars, terrorism and assassinations. Polymarket, on the other hand, operates an overseas exchange beyond the reach of U.S. authorities.

As a result, Polymarket’s foreign exchange has become a magnet for some of the most controversial types of prediction betting on the market.

“If someone does something they know they shouldn’t do, they’re much more likely to do it at Polymarket than at Kalshi,” said Joseph Grundfest, a former securities and exchange commissioner who is now a law professor at Stanford University.

“The problem is that we have a wide range of illegal, immoral and problematic markets that are facilitated by those who trade with anonymous cryptocurrencies,” he said. “Now prediction markets like Polymarket are the latest manifestation of this problem.”

While betting on military strikes, land invasions and global famine takes place on Polymarket’s foreign platform, the company is also planning to launch a US app that will be overseen by the CFTC after key approval from Trump officials. The Biden administration had raided the home of Polymarket’s CEO and closed the company’s US operations in 2022.

The president’s son, Donald Trump Jr., is an advisor to both Polymarket and Kalshi. His venture capital fund, 1789 Capital, invested in Polymarket. And the president’s social media site, Truth Social, plans to launch its own market prediction service. All of this has fueled critics who argue that the Trump family stands to gain financially by allowing prediction market platforms to operate with light-touch regulations.

Grundfest, the former SEC commissioner, said the arrests in Israel should put militaries around the world on guard against personnel trying to profit from classified secrets.

“Such bets,” he said, “can put your own army at greater risk, because you signal to your enemies what may happen, and that puts your own troops at risk.”