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.
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Recent updates
Utah Files Felony Charges Against Kalshi and Its Founders — Second State to Criminally Charge a Platform
Utah filed criminal charges against Kalshi and its two co-founders, Tarek Mansour and Luana Lopes Lara, on October 28 — 13 felonies and a misdemeanour, including a second-degree 'pattern of unlawful criminal activity' count and 12 counts of online gambling promotion. The charges stem from a September sting in which an undercover agent placed 12 sports wagers verified to be in Utah. The CFTC sued Utah the day before to block state enforcement, its tenth such suit. Utah is the second state after Arizona to criminally charge Kalshi, and the first to charge the founders personally. Kalshi called it a 'crazy overreach.'
NBA Names Kalshi and Polymarket Preferred Exchanges — Leaving the NFL Alone in Opposition
The NBA announced on October 26 that it has named Kalshi and Polymarket its 'preferred prediction market exchanges,' signed a non-binding memorandum of understanding with the CFTC on basketball integrity, and expanded its DraftKings deal to include prediction markets — the first league to extend a sportsbook partnership into the category. The exchange deals bar league and team personnel from trading NBA contracts, limit permissible markets, and require sharing suspicious-trading data, in exchange for NBA intellectual property and official data. The NBA joins MLB, the NHL, and MLS as partnered leagues, leaving the NFL as the lone major holdout — and the only league fighting the platforms in court.
CFTC Chair Says Agency Is Watching Prediction Markets for Manipulation Ahead of Midterms
CFTC Chairman Michael Selig said on October 23 that the agency is closely monitoring prediction markets for manipulation ahead of the November 3 midterms, and that it is separately scrutinising oil market trading tied to President Trump's announcements about the war in Iran. Combined midterm open interest on Kalshi and Polymarket stood at $250 million as of October 18, with Kalshi holding 84%. Selig acknowledged the agency often catches political figures trading 'oftentimes after the fact.' The remarks highlight the CFTC's dual role as both the platforms' federal protector and their manipulation watchdog.