War has turned into a high-stakes betting opportunity on prediction platforms, with $529 million traded on Polymarket contracts linked to the United States strikes on Iran over the weekend, according to a Bloomberg report.
By February 28 — the day of the attack — the largest contract on Polymarket had attracted about $90 million in trading volume since its launch. The second-largest bet was placed on a January 31 strike, drawing $42 million in wagers.
Rival platform Kalshi recorded $36 million in bets tied to a question on regime change in Iran, according to a Washington Post reporter.
Largely unregulated, prediction markets operate without clear oversight mechanisms to prevent unfair practices such as insider trading. Analysts at Bubblemaps SA said six accounts collectively made about $1 million in profits by correctly betting on the exact date of the attack — February 28.
According to the analytics firm, several of the most profitable wallets were newly created in February and placed bets only on likely strike dates. In some instances, predictions were made just hours before explosions were reported in Tehran.
One contract betting on a February 27 strike attracted more than $25 million in volume. Another account placed a $26,513 wager on a February 28 strike — its largest ever bet — and reportedly earned more than $174,000.
Nicolas Vaiman, chief executive of Bubblemaps, told Bloomberg that prediction markets are among the first financial products to allow direct bets on geopolitical events. The combination of global conflicts and user anonymity, he said, creates “incentives for informed participants to act early”.
Users require only a crypto wallet to trade on Polymarket, lowering barriers to entry.
Even as military operations in the Middle East continue, new contracts have opened on whether a Gulf state will attack Iran this week or whether the US will strike Iraq by March.
The report noted a similar pattern during US operations in Venezuela in January, when bets surged around the capture of President Nicolás Maduro.
Another analytics firm, Polysights, observed in January a spike in contracts tied to the potential removal of Iran’s Supreme Leader Ali Khamenei, with contracts pricing a 40 percent likelihood of his overthrow by the end of March. The firm claimed that accounts suspected of insider trading accounted for nearly 90 percent of the volume in that contract.
Some contracts also speculated on Khamenei’s death — a development critics argued could create perverse incentives. At the time of writing, local Iranian media reported that he had been killed in US strikes.
Kalshi, which is regulated by the US Commodity Futures Trading Commission (CFTC), told Bloomberg it does not offer markets that settle on an individual’s death. In the event of such an outcome, it said contracts would be resolved based on the last traded price.
Polymarket, which operates outside the US and beyond CFTC jurisdiction, has defended its contracts as a form of crowdsourced information, particularly in fast-moving geopolitical situations where conventional reporting may lag.
Concerns over insider trading in prediction markets are not new.
In February, Israeli authorities charged two individuals — a military reservist and a civilian — with allegedly using classified operational information to earn $150,000 through bets on Israeli security operations in 2025. The case marked the first criminal prosecution linked to prediction-market bets based on secret intelligence.
Kalshi has also disclosed action against two customers suspected of exploiting insider knowledge. According to Axios, these included an editor associated with YouTube personality MrBeast, who allegedly used knowledge of unaired content to place bets, and a California gubernatorial candidate.
As geopolitical tensions escalate, prediction markets are increasingly positioning themselves as real-time barometers of global risk. But with hundreds of millions of dollars changing hands on war-linked contracts, questions over transparency, oversight and market integrity are likely to intensify.
(By arrangement with livemint.com)