A new report by the Anti-Corruption Data Collective found that more than 52% of major military bets were “prolonged” Polymarket they win – above normal odds – raising fears that insiders might profit from sensitive information.
The implication is clear: ordinary traders may bet on people who already know the outcome, turning what looks like a prediction into a transfer of money from the uninformed to the informed.
That is why a growing number of users are asking a sharp question: are the prediction markets fair, or are they structurally biased towards those with better access to information? In simple words, if even a small number of traders have limited knowledge, the market stops being about collective wisdom and starts rewarding those who are closer to the truth before it becomes public.
Market Mechanics
The data behind the concern is hard to ignore. The report analyzed hundreds of thousands of markets and found that high-value, low-probability bets on military and defense outcomes were winning at nearly twice the rate seen in political markets and well above the field average. That kind of performance shouldn’t happen consistently unless the odds are bad or the bettor is highly experienced. In traditional financial markets, patterns like those can trigger the rapid surveillance of insider trading or market abuse.
The story has already gone beyond theory. US prosecutors have charged Gannon Ken Van Dyke, a retired soldier, with alleged betting linked to a military campaign involving Venezuela while in possession of classified information. He has pleaded not guilty, but the case is significant because it represents the first known prosecution in the US tied to insider trading in the prediction market. As enforcement is now underway, regulators no longer treat these risks as considerations.
Who’s Successful
The financial impact is direct but not comfortable. Prediction markets rely on the idea that prices reflect a range of independent observations. But when the results are influenced or known by a small group – such as officials, soldiers or insiders – the benefit changes dramatically. The market may still arrive at the “correct” answer, but profits flow equally to those with foresight or special insight.
For normal users, that creates structural damage. Rather than leveling the playing field, they may offer funds that allow more experienced traders to make money on their margin. This shift has already drawn criticism from lawmakers, who say markets tied to political or military decisions can create perverse incentives for insiders to benefit financially from outcomes they cannot influence or anticipate.
At the same time, the sector is growing. Similar platforms Kalshi they position themselves as highly regulated alternatives, while a growing number of tools now allow users to track and copy large or “suspicious” trades in real time. That development reinforces an important tension: if some traders consistently outperform others, others will try to follow them – effectively admitting that the market may not be as informed as advertised.
Deep controversy is what makes this story so important financially. Prediction markets are becoming more accurate in predicting complex events, increasing their value as information tools. But if that accuracy is driven by a small, knowledgeable minority rather than a collective understanding of reality, then the same mechanism that improves predictions also undermines accuracy. In that case, the market doesn’t just predict outcomes – it reallocates money based on who knows first.
