A bettor reportedly made $436,000 wagering on the sudden removal of Venezuelan President Nicolás Maduro, raising fresh concerns over potential insider trading in US prediction markets.
Data from Polymarket, a popular platform for betting on political and social events, showed the likelihood of Maduro leaving office at just 6.5 per cent on the afternoon of Friday, January 2.
The odds climbed to 11 per cent shortly before midnight and surged sharply in the early hours of January 3, moments before former US President Donald Trump announced on Truth Social that Maduro was in US custody.
Dennis Kelleher, chief executive of the financial reform advocacy group Better Markets, told CBS that the pattern “has all the hallmarks of a trade based on inside information.”
Other Polymarket users also reportedly earned tens of thousands of dollars from wagers linked to Maduro’s capture, prompting lawmakers to scrutinize the burgeoning sector.
On Monday, New York Democrat Congressman Ritchie Torres introduced legislation that would bar government employees from trading on prediction markets if they have access to “material nonpublic information” related to a bet.
Prediction markets such as Polymarket and Kalshi have surged in popularity in the US, allowing users to place bets on outcomes ranging from elections to sporting events.
The platforms drew hundreds of millions of dollars in wagers during the 2024 US presidential election.
While the Biden administration tightened regulatory oversight, the sector has seen a more favourable environment under the Trump presidency. Donald Trump Jr. serves as an adviser to both Kalshi and Polymarket.
Although insider trading is illegal in traditional financial markets, prediction markets face fewer restrictions.
Kalshi said it “explicitly prohibits insider trading of any form, including government employees trading on prediction markets related to government activity.”