There are reports that in online gambling where bets are placed on real-world events, there are traders who inexplicably win big on every major incident.
There are several online gambling services that allow users to place bets on news, sports, and other topics, and in the case of major events, hundreds of millions of dollars can change hands. Suspicions of insider trading have arisen at these online gambling sites.
Traders placed over $1bn in perfectly timed bets on the Iran war. What is going on? | US-Israel war on Iran | The Guardian
Several suspicious transactions have been reported. In January 2026, a nearly newly created account made over 60 million yen in profits from a bet that Venezuelan President Maduro would step down by January 31, 2026. The day before the US and Israeli attack on Iran on February 27, 2026, there was an unusual influx of funds from approximately 150 accounts, and the following day, 16 accounts each made over 16 million yen in bets that the US would bomb Iran. Accurate predictions were also made in bets on whether Iran's Ali Khamenei would be overthrown and whether oil prices would fall due to a ceasefire between the US and Iran, with amounts in the tens of billions of yen changing hands in some cases.
Some of these bets have been pointed out as potentially involving insider trading due to their high accuracy.
The non-profit organization Public Citizen has filed a complaint with the U.S. Commodity Futures Trading Commission, urging an investigation. Craig Holman, the organization's government affairs lobbyist, pointed out, 'The surge in betting that occurred before a particular event is on a scale that doesn't seem like mere luck. It looks highly likely that someone had inside information and placed very large bets, not only in terms of timing but also in terms of the amounts wagered.'
In fact, in one instance involving Israeli gambling, military personnel were arrested for using classified information in the betting.
Israeli military intelligence leaked and used to make a fortune on the gambling site 'Polymarket' - GIGAZINE
There have also been reports of OpenAI employees taking confidential information.
OpenAI fires employee for using confidential information in prediction market - GIGAZINE
Kalshi and Polymarket are the two major online gambling sites, and both prohibit insider trading, but Holman points out that 'it's a lawless zone right now,' and expresses concern that suspicious trading is spilling over into the stock market.
However, it cannot be said that all such transactions are illegal; it is certainly possible that they are merely based on luck or highly accurate inferences derived from legitimate information.
Experts point out that 'insider trading laws are complex, and tracking is difficult in emerging markets where betting is easily done online.' They add that these markets still operate in a legal gray area, resulting in fewer legal restrictions.
Joshua Mitz, a law professor at Columbia University, pointed out that 'because online gambling transactions are conducted through blockchain and other anonymized means, it is extremely difficult for regulators and prosecutors to identify traders. Furthermore, proving that a trader made a transaction based on illegally obtained information is extremely difficult.' He added that even if relevant laws are to be created, it would be counterproductive to create laws that cannot be effectively enforced due to technological limitations.
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