The Polymarket phenomenon - Venezuela invasion winner and Second Coming losers

Key topics:Prediction markets boom, but suspicious bets raise insider trading fearsPolymarket cases suggest non-public info may be exploited for big winsLawmakers push for regulation to protect users and market credibility.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Paul J. Davies.On the face of it, gambling on the second coming of Jesus Christ is just funny. Would earthly dollars even matter if the Messiah did return? Still, more than $3 million was wagered between hopeful believers and doubtful skeptics on Polymarket last year; in the final three months of 2025, activity on prediction markets took off and weekly wagers topped $2 billion.There was one big advantage to the Jesus bet, whether punters went for Yes or No: It was at least a trade where everyone could be fairly sure that no one in the market had inside information. That’s not the same for a growing number of high-profile events where winning positions have been ramped up suspiciously just before the outcome was revealed..The US raid on Venezuela and capture of Nicolás Maduro is just the latest example. The world was stunned by the audacious — and completely unexpected — American mission. But one new account on Polymarket won more than $400,000 after doubling bets on Maduro’s downfall, which the trader had begun making only in late December, the Wall Street Journal reported on Monday. The wager was that Venezuela’s president would be gone by Jan. 31 this year. Perhaps this was truly a shot in the dark — but the timing of the final big bet just a few hours before US forces hit Caracas looks decidedly dodgy..Read more:. Gavekal co-founder says China stocks are the world’s top value bet amid profit boom.And it’s not the first time. A different trader got more than $1 million in winnings in December from remarkably accurate bets on 22 of the 23 most searched personalities last year on Alphabet Inc.’s Google in early December, according to Forbes. The same account had recently won big on the release date for Google’s Gemini 3.0 AI model. Bettors have also raised concerns in recent months over unusually large and well-timed bets on purchases of Bitcoin by Michael Saylor’s Strategy Inc., and on the winner of the Nobel Peace Prize.All of this is feeding a perception that these lightly regulated platforms are a financial wild west where punters can be picked off by those in the know. Suspicions are strong enough that an analytics firm called Polysights markets an “Insider Finder” tool, which lists new accounts making large bets – they aren’t necessarily dodgy, but it’s at least a warning signal for other users.A spokesperson for Kalshi, Polymarket’s main rival in the prediction-markets industry, told Bloomberg News that it explicitly prohibits insider trading of any form. Meanwhile, Polymarket’s Chief Executive Officer Shayne Coplan has previously said that suspected insiders are regularly flagged by users on social media platforms such as X.com, according to the WSJ. Bad news travels fast isn’t much of a defense in my view.In the US, the prediction platforms are overseen by the Commodity Futures Trading Commission because the contracts are structured like swaps. However, this agency is under resourced and so far has allowed unrestrained growth in the scale and type of wagers. Most of the boom in recent months is linked to sports betting and several state-based gambling regulators are asking courts to give them jurisdiction instead.As things stand, market users aren’t protected from getting cleaned out by people armed with non-public information in the way they would be in the stock market, for example. Polymarket’s non-US platform also allows bets to be made with cryptocurrency from anonymous wallets, according to Bloomberg News, offering another layer of obfuscation to potential cheats.True believers in efficient markets and outright libertarians will argue that these markets should be left alone to police themselves. When in-the-know users start making bets, the pricing signals sent by their actions spread information about the event concerned, the theory goes. If this were really a practical reality, we ought to apply it to stock markets too and let anyone trade on private knowledge. But we don’t — because it’s costly and deeply unfair to those with money on the line before the insider turned up.A Democratic Congressman, Ritchie Torres, is now calling for legislation to criminalise insider dealing on prediction markets. This is the right approach whichever agencies end up with oversight. In fact, the prediction markets themselves ought to be encouraging stricter rules. If suspicious cases like the ones already seen keep appearing, even the most careless gamblers will become more reluctant to get involved. That threatens to reverse the early success Polymarket and Kalshi have enjoyed — success that’s driven the values of each platform to more than $10 billion.One thing the platforms themselves could do immediately is to close the betting on scheduled announcements — such as the Google search rankings — a day, a week or some other amount of time before they are due. That would limit opportunities for any would-be cheats..Read more:.US lawmakers push for sanctions and review of SA ties over alliances with China, Russia, and Iran.But punters can protect themselves, too, by avoiding all bets where other people or organisations can decide or obviously influence the outcome. Stick to wagers based on millions of people making independent choices, like free and fair elections, or where the result comes down to “an act of God.” Betting against Jesus turning up this year doesn’t sound quite so silly after all..© 2026 Bloomberg L.P.

The Polymarket phenomenon - Venezuela invasion winner and Second Coming losers

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