Prediction markets spike in hours before Iran-US conflict starts
Unusual betting activity on prediction market platforms in the hours before the United States and Israel launched strikes on Iran has raised fresh scrutiny over the rapidly growing sector.
Data analysed by the New York Times found that around 150 accounts on the prediction market platform Polymarket placed more than $US850,000 in bets within 24 hours predicting that a military strike on Iran would occur by Saturday. Many of the accounts had been created only shortly before the wagers were placed.
A separate analysis by the Financial Times identified 12 Polymarket accounts that collectively wagered $US66,993 on the same outcome, with roughly half of the bets placed in the six hours leading up to the attack.
The strikes reportedly killed Iranian leader Ayatollah Ali Khamenei along with senior members of the country’s leadership.
Activity also spiked on the US-regulated prediction market Kalshi, which later froze related trades and refunded users after determining the contracts were tied to deaths, which the platform does not permit.
The episode has renewed debate over oversight of prediction markets such as Polymarket, which operates outside US regulatory jurisdiction, while Kalshi is overseen by the Commodity Futures Trading Commission. Lawmakers in Washington have previously raised concerns about potential insider trading and market manipulation on the platforms.
Prediction markets are yet to face the same regulatory scrutiny as sports betting sites, but with markets on some exceptionally controversial topics, governments globally are expected to clamp down.
