Congress Demands Probe of Polymarket's Well-Timed Bets

Congress members are calling for investigations into the prediction market platform Polymarket following reports of well-timed bets on major geopolitical events, according to multiple sources.

The latest incident involves at least 50 new accounts placing substantial bets on a U.S.-Iran ceasefire hours before President Trump announced it late Tuesday. These were the sole bets made by these accounts, as reported by Los Angeles Times and NPR. Similar incidents occurred in January when an anonymous user profited $400,000 betting on Venezuelan leader Nicolás Maduro's ouster hours before it happened. Another account made roughly $550,000 from bets related to the Iran war.

The prescient wagers have raised concerns about insider trading in prediction markets. Harvard University researchers estimated that $143 million in profits were made on Polymarket by individuals potentially using inside information for events ranging from Taylor Swift’s engagement to the Nobel Peace Prize, as reported by Los Angeles Times. Rep. Ritchie Torres (D-N.Y.) sent a letter to the Commodity Futures Trading Commission demanding an investigation into these trades, citing serious concerns about access to material nonpublic information.

The controversy has bipartisan support for legislation to broaden the definition of insider trading to include prediction markets. Sen. Richard Blumenthal (D-Conn.) sent a letter to Polymarket questioning its practices regarding war-related trades and efforts to prevent insiders from trading on the platform, as reported by NPR. Republicans have also criticized these platforms and called for bans on such bets.

The stakes are high for prediction market platforms like Kalshi and Polymarket as they seek approval to operate nationwide. The competition carries political overtones, with Donald Trump Jr. being an investor in Polymarket through his venture capital firm 1789 Capital and a paid strategic advisor to Kalshi.