Full Report(PDF).
Findings
- Political markets drive a disproportionate share (over 36%) of the total trading volume across Polymarket despite being a small portion of total markets on the platform (4%);
- Political market categories with the highest risk of insider trading (those determined by the decisions of an individual or small group of individuals in a military, executive branch or central bank) represent $8 billion in trading volume.
- In most markets, the success of longshot bets (defined as a bet of $2,500 or more at a price of 0.35 or less, implying ≤ 35% probability) aligned with expectation: overall, 14% of longshot trades bought the winning outcome;
- Political markets were the second most successful longshot bet category, with 25% of longshot bets succeeding, and the largest absolute volume of longshot bets placed on the winning outcome: we observed $35 million wagered in longshot bets, of which $9 million was bet in the first ten weeks of 2026 alone;
- Within political markets, those related to military and defence events are a clear outlier, with a disproportionately high longshot success rate of 52%. There is a noticeable spike in successful longshot betting just before these markets resolve, with more longshot bets placed on the winning outcome than losing outcome in the twelve hours before the market closed.
Earlier this month, a member of the US military was charged with insider trading after allegedly leveraging classified information to place a series of bets on Polymarket related to the US abduction of Venezuelan President Nicolas Maduro. This is just the latest scandal involving prediction market platforms – trading applications where users can exchange contracts on the outcome of real-world events.
Amidst a surge of media reporting and investigations into potential insider trades on these platforms – about everything from the Nobel Peace Prize, to presidential pardons, to US and Israeli attacks against Iran and even the weather – ACDC set out to determine whether these incidents reflect isolated, albeit recurrent, cases or a broader, systemic risk.
We analyzed all settled markets on Polymarket, one of the two main prediction market platforms along with Kalshi, and found that political markets with outcomes determined by groups of insiders display disproportionately high signs of trading on insider information. Within political markets, those related to military or defence actions show the clearest signs of widespread information asymmetries.
