Israeli authorities have arrested and indicted two citizens—an Israel Defense Forces (IDF) reservist and a civilian—for allegedly using classified military information to place bets on the prediction market platform Polymarket. The joint statement from the Shin Bet (Israel's counterintelligence agency), the Israel Police, and the Israeli Defense Ministry described the alleged activity as posing "a real security risk to IDF operations and to the security of the state" and stated it is viewed "with utmost severity."
The charges include severe security offenses, bribery, and obstruction of justice. Prosecutors allege the IDF reservist accessed classified details about Israel's planned attack on Iran in June 2025 during the 12-day war and shared that information with the civilian to place multiple wagers on Polymarket. The specific bets reportedly concerned the timing of Israel's opening strike on Iran.
While most identifying details about the defendants remain classified, authorities confirmed they are not senior military or government officials. One defendant's attorney contested the charges, calling their client "a highly regarded individual who has made a significant contribution to Israel's security" and alleging "selective enforcement." The joint statement also referred to the arrest of "several suspects" and multiple "reservists," though no further public cases have been announced.
Polymarket, a U.S.-based prediction market platform, did not immediately comment on the arrests or whether the alleged trading violated its terms of service. Notably, Polymarket has previously suggested that insider activity can improve market accuracy. This stance contrasts with its chief U.S. rival, Kalshi, whose CEO recently emphasized its prohibition of insider trading—though Kalshi itself faced scrutiny days later when insiders appeared to successfully bet on surprise Super Bowl halftime show appearances.
The incident has intensified an ongoing debate about prediction markets and insider trading. These platforms, which allow users to buy and sell shares tied to real-world outcomes, have seen a surge in wagers on geopolitics, crypto, and sports. Recent controversies include a trader profiting approximately $630,000 on Polymarket from bets on Venezuelan leader Nicolás Maduro's capture just hours before it occurred, and another user earning nearly $1 million from highly accurate bets on Google's 2025 Year in Search rankings, sparking speculation about insider access.
