Bloomberg Found $200 Million in Suspicious Wagers on Kalshi and Polymarket. An Army Sergeant Has Already Been Indicted.
A Bloomberg investigation identified approximately $200 million in suspicious wagers on Kalshi and Polymarket between January and June 2026, concentrated in geopolitical event markets. A US Army Master Sergeant has been indicted for using classified information about the operation that captured Venezuelan President Maduro to generate $409,000 in profit. 57% of unusually successful wallets were created within 24 hours of placing their bets. The House Oversight Committee has launched a formal investigation.
A Bloomberg investigation published 20 July identified approximately $200 million in wagers on Kalshi and Polymarket between January and June 2026 displaying characteristics associated with potential insider trading, concentrated in geopolitical event markets covering Iran tensions and Venezuelan political developments. The most striking statistical signal: 57% of wallets with unusually successful returns were created within 24 hours before placing the bets that generated those returns — fresh accounts, consistently profitable, on markets tied to events that subsequently occurred.
The investigation has already produced a federal criminal case. An indictment unsealed 24 April charges US Army Master Sergeant Gannon Ken Van Dyke with using classified intelligence about Operation Absolute Resolve — the operation that captured Venezuelan President Nicolás Maduro — to place wagers generating more than $409,000 in profit before the news was public. The case is the first federal criminal prosecution of a prediction market participant for insider trading, establishing that the conduct is prosecutable under existing law. Both Kalshi and Polymarket have implemented screening measures — employment data collection, bans on politicians wagering on own campaigns, bans on athletes betting on their own sports — but Bloomberg found evasion techniques are evolving faster than the platforms can counter them.
For UK readers, the Van Dyke indictment is a useful precedent. US insider trading law has been extended to cover prediction market activity, which means the legal risk for someone with material non-public information — a government employee, a corporate officer, a military member — placing bets on prediction markets is now comparable to trading on that information in securities markets. The Gambling Commission and FCA have not yet established an equivalent framework for prediction market insider trading in the UK, partly because neither Kalshi nor Polymarket holds UK regulatory authorisation. But if the UK market opens, the insider trading question will need a regulatory answer before it does.
The House Oversight Committee, led by Chairman James Comer, launched a formal investigation following the Bloomberg report. The investigation lands alongside the House Agriculture Committee hearing on the same day (22 July) and the Group of Copenhagen's report flagging the Polymarket market on Folarin Balogun's World Cup availability — opened on the day of his red card, before FIFA publicly confirmed his ban was lifted. These three events, coinciding within 48 hours, make the integrity question the sharpest immediate challenge prediction markets face — sharper, in some ways, than the state-court legal battles, because a credible insider trading problem goes to the legitimacy of the product rather than just its legal classification.
Operators mentioned in this article
Recent updates
Kalshi Launches Gold and Silver Perpetual Futures After CFTC Approval — First Non-Crypto Perps Cleared in the US
The CFTC approved and Kalshi launched perpetual futures on gold and silver on September 10 — the first non-cryptocurrency perps to receive US regulatory clearance. Contracts are cash-settled, perpetual, and 24/7. Kalshi has pending applications for US equities, copper, and currencies. Crypto perps have done $44 billion in notional volume since May. The launches put Kalshi in direct competition with CME and COMEX as US commodity trading venues.
Robinhood Agrees to Exit Michigan Sports Contracts by October 9 — Court-Approved Deal Described as Blueprint
Robinhood Derivatives agreed on September 4, under a court-approved stipulation, to stop new Michigan sports event contracts by September 9 and close positions by October 9. Michigan will not enforce gambling laws against Robinhood while it complies. The deal preserves Robinhood's CEA preemption argument and keeps Sixth Circuit appeals on track. Legal Sports Report called it a potential blueprint for similar interim accommodations between platforms and states.
Kalshi Seeks Ninth Circuit En Banc Rehearing While Robinhood Files Separate SCOTUS Petition
Kalshi petitioned the full Ninth Circuit (11 judges) for en banc rehearing of the August 28 3-0 ruling for Nevada on September 9. On the same day, Robinhood filed a separate SCOTUS certiorari petition from the same ruling, going directly to the Supreme Court. New Jersey already has a SCOTUS petition filed from the Third Circuit's April ruling. Two cert petitions now sit before SCOTUS on the prediction market question.