I recently came across a quite astonishing case: Israeli authorities caught an insider in a prediction market.

Here’s how it happened. In February, Israel’s largest English-language newspaper, The Jerusalem Post, reported a serious information leak. Prosecutors accused an Israeli civilian and a reservist from the Israel Defense Forces of using classified military intelligence to place bets on Polymarket for profit. This is no small matter—authorities believe it created a serious operational security risk during wartime. According to publicly available information, the two were arrested in a joint operation involving Israel’s General Security Service, defense ministry security units, and the police. Prosecutors have obtained evidence and brought charges against them for serious security-related crimes, bribery, and obstruction of justice.

Although the authorities have not disclosed the suspects’ identities or specific details, the community had already spotted anomalies on Polymarket. A user named Rundeep entered the market last June, and after placing bets across six prediction markets about Israeli military actions, he achieved a 100% win rate—five of the bets were made when the odds were below 50%, and he ultimately earned more than $150,000. The only time he failed was in a prediction about the U.S. military’s action against Iran, which is especially intriguing.

What I think about is that platforms like Polymarket—unlicensed open platforms—essentially provide a direct channel for people with an information advantage to cash out. People who hold asymmetrical information find it hard to resist temptation, making insider cases almost inevitable. If this were to happen in sports or entertainment, it might be manageable, with limited impact. But when it involves politics, the military, or even war, the situation becomes much more serious.

Imagine what would happen if an opposing force used insider trading on Polymarket to anticipate the direction of military operations ahead of time—how would subsequent events unfold? This isn’t just an issue for Israel; any country could face similar risks. Traditional gambling markets already have clear restrictions regarding political elections, legislative outcomes, and wars. Whether prediction markets will face similar regulation in the future remains to be seen, and this game could last a long time.