Insiders Are Cashing In on Prediction Markets

Prediction markets like Polymarket and Kalshi are gaining popularity, raising concerns about potential insider trading and regulatory gray areas. The platforms allow betting on diverse events, from elections to geopolitical events, with some users seemingly profiting from non-public information. Examples include Super Bowl halftime show predictions, Google's search terms, and even the timing of strikes between Israel and Iran. While prediction markets aim to provide accurate information, the lack of clear regulations raises questions about fairness and national security risks. Platforms like Kalshi are attempting to combat insider trading through identity verification, but challenges remain. Regulators are beginning to scrutinize these markets, but the future of their oversight and the potential for manipulation remain uncertain.