The Justice Department on April 23 charged an American soldier for scoring big winnings on bets he made about future actions of the special forces unit to which he was attached.
The government says that Master Sgt. Gannon Ken Van Dyke raked in more than $400,000 by betting on the U.S. kidnapping of Venezuelan President Nicolás Maduro in January. Prosecutors charged Van Dyke with the “unlawful use of confidential government information for personal gain, theft of nonpublic government information, commodities fraud, wire fraud, and making an unlawful monetary transaction.”
No longer are bettors limited to betting on sporting events – with more deleterious effects appearing regularly on that front. Now, with the advent of prediction markets, they can – and do – bet on future world events.
For instance, citing Bloomberg research, Common Dreams reported on March 1:
“Bettors on the prediction platform Polymarket made a killing with suspiciously timed wagers that the United States would attack Iran by Feb. 28, the day President Donald Trump announced a bombing campaign against the Middle East nation.”
According to Bloomberg, six brand new Polymarket accounts “made around $1 million in profit” by correctly guessing the timing of the U.S. attack on Iran.
Lucky guess?
Many doubt it.
Common Dreams headlined a story: “Massive corruption: Traders placed massive bets minutes before Trump’s post on Iran.”
Public Citizen demanded an insider trading investigation after these “highly suspicious” and “very substantial bets were placed in the last-minute moments prior to the Feb. 28 attack.”
No such probe has been activated. The only person charged so far for insider trading is Sgt. Van Dyke.
HuffPost also noted: “Traders placed huge $950 million bets on oil price falling hours ahead of cease fire.”
On March 24, Nobel Laureate economist Paul Krugman was more direct:
“This ‘sharp and isolated jump in volume’ … was especially bizarre because there were no major news items — no major publicly available news items — to drive sudden big market transactions. The story would be baffling, except that there’s an obvious explanation: Somebody close to Trump knew what he was about to do, and exploited that inside information to make huge, instant profits.”
Krugman continued:
“This wasn’t the first time something like this has happened under Trump. There were large, suspicious moves in the prediction market Polymarket before previous attacks on Iran and Venezuela. But this front-running of U.S. policy was really large: the Financial Times estimates the sales of oil futures in that magic minute Monday morning at about $580 million, and that doesn’t count the purchases of stock futures.”
This is reminiscent of similar allegations about wildly fluctuating stock market action prior to Trump announcing his seesaw, waffling stances on tariff announcements and threats. Many people who watch such things for a living have questioned the prescience of those making big profits from these pre-announcement trades.
Similar insider trading suspicions have arisen in connection to stock purchases by federal legislators, who sit on committees that oversee and set rules for the industries in which they suddenly decide to invest.
On April 30, the Senate banned senators and their staffers from playing prediction markets, but bipartisan efforts to curb smelly congressional stock trades have failed. Even those proposals have been criticized. Campaign Legal Center, which calls for a ban on congressional stock trading, said that a recent bill “fails to address the two inherent problems with congressional stock ownership: the appearance of insider trading and members’ ability to profit from their official position.”
This gets us back to Sgt. Van Dyke – the only person with government ties to be charged with insider trading.
“This soldier was probably just copying what he’s seeing elsewhere,” said Rep. Raja Krishnamoorthi, D-IL. “The culture of insider trading and corruption starts at the top and is permeating everywhere and everything.”
On April 23, Trump voiced agreement with the assessment of the ubiquity of gambling today.
“Well, you know, the whole world, unfortunately, has become somewhat of a casino,” said the man who could not make his casino profitable. “I was never much in favor of it,” he added. “I don’t like it conceptually, but it is what it is.”
Reporting this story, ABC pointed out:
“One of Trump’s namesake companies, Trump Media and Technology Group, announced last year that it would launch a prediction betting marketplace called Truth Predict. The White House has said all of President Trump’s assets, including his majority stake in Trump Media and Technology Group, are being held in a trust controlled by his sons.”
Polymarket, one of the leaders among predictive markets named Donald Trump Jr., to its advisory board. Junior’s venture capital firm, 1789 Capital, has invested in Polymarket.
So, when Trump says, “No, I think that I’m not happy with any of that stuff,” we are allowed to roll our eyes.
The ability to bet on anything through these predictive markets showed its sick side when Polymarket – yes, Trump-connected Polymarket – took bets on whether the U.S. airman shot down over Iran was alive or dead? [After outrage, it shut down that betting.]
“Disgusting bets!” according to Rep. Seth Moulton, D-MA. “They could be your neighbor, a friend, a family member,” he wrote. “And people are betting on whether or not they’ll be saved.”
Krugman offered a solution for those using governmental info and contacts for person gain.
“When officers of a company or people close to them exploit confidential information for personal financial gain, that’s insider trading – which is illegal,” he wrote. “But we have another word for situations in which people with access to confidential information regarding national security – such as plans to bomb or not to bomb another country – exploit that information for profit. That word is ‘treason.’”
